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Handbook on the Economic Complexity of Technological Change

Handbook on the Economic Complexity of Technological Change

Elgar original reference

Edited by Cristiano Antonelli

This comprehensive and innovative Handbook applies the tools of the economics of complexity to analyse the causes and effects of technological and structural change. It grafts the intuitions of the economics of complexity into the tradition of analysis based upon the Schumpeterian and Marshallian legacies.

Chapter 5: The Symbiotic Theory of Innovation: Knowledge Creation and the Evolution of the Capitalist System

Martin Fransman

Subjects: economics and finance, economics of innovation, evolutionary economics, innovation and technology, economics of innovation


Martin Fransman INTRODUCTION Remarkably, economics has very little to say about the process of knowledge creation in capitalist economies.1 This is remarkable because economists acknowledge the crucial role that increasing knowledge plays in the process of economic change. Edith Penrose’s comment in this regard is just as true now as it was when she wrote it: ‘Economists have, of course, always recognized the dominant role that increasing knowledge plays in economic processes but have, for the most part, found the whole subject of knowledge too slippery to handle . . .’ (Penrose, 1959: 77). The human complex system (of which the economy is a part) is in one respect fundamentally different from biological and physical complex systems. It is based on the creation of knowledge by human beings. It is this knowledge that injects novelty into the system, causing a rupture with the past and driving its dynamics.2 In order to understand the workings of this system, therefore, it is necessary to understand how knowledge is created in it. In recent years some economists have acknowledged the importance of paying more attention to the creation of knowledge. Cristiano Antonelli (2008), for example, has emphasized the centrality of what he calls ‘knowledge interactions’ in economic complex systems, also referred to as ‘generative relationships’ by Lane and Maxfield (1997). Ulrich Witt (2002) has argued that although Schumpeter’s entrepreneur has been credited with the creation of what in this chapter will be referred to as innovation knowledge (that is, knowledge embodied in new products, processes...

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