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Applied Evolutionary Economics

New Empirical Methods and Simulation Techniques

Edited by Pier Paolo Saviotti

The expert contributors to this book examine recent developments in empirical methods and applied simulation in evolutionary economics. Using examples of innovation and technology in industry, it is the first book to address the following questions in a systematic manner: Can evolutionary economics use the same empirical methods as other research traditions in economics?; Is there a need for empirical methods appropriate to the subject matter chosen?; What is the relationship between appreciative theorising, case studies and more structured empirical methods?; and What is the relationship of modelling and simulation to empirical analysis?
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Chapter 2: Technological Paradigms and the Evolution of Networks: Lessons from the Pharmaceutical Industry

Fabio Pammolli and Massimo Riccaboni


Fabio Pammolli and Massimo Riccaboni INTRODUCTION This chapter studies the evolution of a set of interorganizational relationships in a domain characterized by structural breakthroughs in underlying knowledge bases: the international pharmaceutical industry in the last 20 years. Sectoral specificity notwithstanding, our work unravels some general and distinctive properties of the relationships between patterns of technological change and the evolution of organization forms, particularly in terms of the analytical strategies they call for. Our starting points are the notion of ‘technological paradigms’ (Dosi, 1982) and a focus on markets and organizations as repositories of problemsolving knowledge (see Simon, 1962, 1991). Moreover, we refer to the notion of ‘appreciative theorizing’, according to which theorizing tends to be close to empirical work and provides both guidance to and interpretation of empirical investigations (see Nelson and Winter, 1982). In accordance with the interplay between theory and data that should sustain any appreciative theorizing exercise, our empirical work is exploratory in nature. We use graph-theoretical tools and measures to reveal how the nature and evolution of relevant technological conditions induce distinguishable patterns of structural change in the set of economic relationships we analyse (see Orsenigo et al., 2000; Riccaboni, 2000; Pammolli et al., 2001). Since relationship-induced effects are not negligible relative to effects associated with other variables, we take into account the overall relational structure. Specifically, we associate the network with a digraph (directed or oriented graph), by identifying the actors with the vertexes of the graph and the relationships with...

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