ENTREPRENEURSHIP AS RECOMBINANT GROWTH
Ola Olsson () and
Bruno Frey ()
No 51, Working Papers in Economics from University of Gothenburg, Department of Economics
The paper presents a model of the entrepreneur as an undertaker of new combinations of ideas. Technology is seen as a set of ideas in a metric technology space where new knowledge is created by the combination of older ideas in the spirit of Schumpeter (1934), Weitzman (1998) and Olsson (2000). Given some intuitive assumptions, we demonstrate that technological progress generated by the convex combination of ideas is constrained by five factors: First, the combinatory process eventually leads to the exhaustion of technological opportunity. Second, the cost of combining ideas increases with the technological distance between the originating ideas. Third, profits are maximized when ideas are combined that are technologically close. Fourth, the technology set is constrained by a social possibility set of socially acceptable ideas. Five, the boundaries implied by the ruling technological paradigm limits the scope for eternal recombinant growth.
Keywords: recombinant growth; technology; ideas; technology space (search for similar items in EconPapers)
JEL-codes: O31 O33 (search for similar items in EconPapers)
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Published in Small Business Economics, 2002, pages 69-80.
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Journal Article: Entrepreneurship as Recombinant Growth (2002)
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