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A Modern Reader in Institutional and Evolutionary Economics

Key Concepts

Edited by Geoffrey M. Hodgson

In the 1990s, institutional and evolutionary economics emerged as one of the most creative and successful approaches in the modern social sciences. This timely reader gathers together seminal contributions from leading international authors in the field of institutional and evolutionary economics including Eileen Appelbaum, Benjamin Coriat, Giovanni Dosi, Sheila C. Dow, Bengt-Åke Lundvall, Uskali Mäki, Bart Nooteboom and Marc R. Tool. The emphasis is on key concepts such as learning, trust, power, pricing and markets, with some essays devoted to methodology and others to the comparison of different forms of capitalism. An extensive introduction places the contributions in the context of the historical and theoretical background of
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Chapter 2: The learning economy: challenges to economic theory and policy

Bengt-Åke Lundvall


Bengt-Åke Lundvall* INTRODUCTION In this chapter the focus is on new features in our societies that have to do with the changing roles of learning and knowledge in the economic process. Some of the new characteristics are reasonably well established in theoretical and empirical terms. Others are less so, and some of the propositions should be regarded as conjectures based upon a personal interpretation of empirically based trends, especially new trends in the demand for labour. The starting point is the assumption that the current economy is one where knowledge is the most strategic resource and learning the most important process. This observation has important implications for economic theory. It challenges the fundamental focus on scarcity in economic theory and it implies that the economic process can only be understood as being socially embedded.1 It becomes important to distinguish new trends in the knowledge base and their impact on the economy. In what follows we propose the following interpretations. While the information technology revolution makes more kinds of knowledge codifiable, some elements of tacit knowledge become even more important for economic performance and success than before. The traditional dichotomy between collective and private knowledge is becoming less relevant. As indicated in a recent contribution by Kenneth Arrow (1994), hybrid forms of knowledge, which are neither completely private nor completely public, become increasingly important. More and more strategic know-how and competence is developed interactively and shared within subgroups and networks. Access to and membership of such subgroups is far...

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