Competition, Diversity and Economic Performance

Competition, Diversity and Economic Performance

Processes, Complexities and Ecological Similarities

Clement A. Tisdell

This thought-provoking book explores the influences of market competition and diverse behaviours of economic agents on economic performance, particularly dynamic economic performance.

Chapter 3: Diversity of consumers, product innovation and economic performance

Clement A. Tisdell

Subjects: economics and finance, evolutionary economics, industrial economics, environment, ecological economics

Extract

Standard economic analysis gives little attention to the important role of the diversity of the characteristics of consumers (or more generally, of buyers) in influencing product and service innovation. Such diversity is able to improve the dynamic performance of economies. Even Schumpeter (1942) focuses his theory of innovation on the supply side of markets and fails to consider the contribution of buyers to the process of innovation. In reality, the attributes of both buyers and sellers can have important ramifications for the dynamic performance of economies. The purpose of this chapter is to show the importance of the diversity of various attributes of buyers for the dynamic performance of economies. Although several other chapters in this book give more attention to the consequences for economic performance of diversity of the relevant characteristics of businesses, this aspect is also given some attention here.

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