 The co-evolution of innovation, demand and growthPier Paolo Saviotti and Andreas Pyka Post-Print from HAL Abstract: In order to explain long-run economic development, we analyse in this paper the interplay between supply-side and demand-side processes. On the supply side, three different innovation processes are observed and interact: (i) growing productive efficiency, (ii) the emergence of new sectors and (iii) the increasing quality and differentiation of existing products. On the demand side, we analyse the meaning of disposable income and varying preference systems. The analysis is undertaken with the help of a numerical model of economic growth by the emergence of new industries. Our results show that the time path of economic development which we observe could not have been generated by taking into account a supply-side-based view on innovations alone. Without making reference to the formation of an adequate demand, development processes cannot be explained. The three processes need to be combined because each one individually would not suffice to generate long-run economic development. However, only with the formation of an adequate demand long-run economic development becomes sustainable. Keywords: ECONOMIC; DEVELOPMENT; STRUCTURAL; CHANGE; INNOVATION; CO-EVOLUTION; DEMAND (search for similar items in EconPapers) Published in Economics of Innovation and New Technology, 2013, 22 (5), pp.461-482. ⟨10.1080/10438599.2013.768492⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01064106 DOI: 10.1080/10438599.2013.768492 Access Statistics for this paper More papers in Post-Print from HAL |
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