Edited by Tyrone S. Pitsis, Ace Simpson and Erlend Dehlin
Chapter 5: Innovation and the division of labour
The purpose of this chapter is to summarize the relationships between innovation and the division of labour. These relationships operate in both directions: from innovation to the division of labour and from the division of labour to innovation. Moreover, these relationships are not monotonic. For example, as the division of labour increases, this may lead to more innovation (of certain types). But eventually, the further division of labour may be dysfunctional, and get in the way of innovation. As a result, the relationship between the division of labour and innovation is better described as an inverted ‘U’. To motivate the chapter, we start with a brief summary of the history of economic thought about the division of labour and its relationship to innovation. This shows that the bi-directional nature of these relationships was well known to earlier writers, and so also was the idea that excessive division of labour would be dysfunctional. Then, in Sections 3 and 4, we distinguish various forms of innovation and various aspects of the division of labour. We do this because it will become clear that the nature of the relationships to be described here depend on which form of innovation and which aspect of the division of labour is being considered.
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