The Knowledge Growth Regime: A Schumpeterian Approach

197 Pages·2019·2.448 MB·English

by  Cristiano Antonelli

The Knowledge
Growth Regime
A Schumpeterian
Approach
Cristiano Antonelli
The Knowledge Growth Regime
Cristiano Antonelli
The Knowledge
Growth Regime
A Schumpeterian Approach
Cristiano Antonelli
Dipartimento Di Economia
E Statistica Cognetti De Martiis,
Collegio Carlo Alberto
University of Turin
Turin, Italy
ISBN 978-3-030-05507-3 ISBN 978-3-030-05508-0 (eBook)
https://doi.org/10.1007/978-3-030-05508-0
Library of Congress Control Number: 2018966695
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C
ontents
1 Introduction: The Economics of Knowledge
for the Knowledge Economy 1
2 The Economics of Knowledge 19
3 The New Knowledge Intensive Direction
of Technological Change 69
4 The Dynamics of Knowledge Governance:
Schumpeterian Growth Regimes 99
5 The Political Economy of the Knowledge
Growth Regime 125
6 Toward a New Knowledge Policy 143
7 Conclusions 167
References 177
Index 193
v
L f
ist of igures
Fig. 2.1 The derived demand for knowledge and standard economic
goods with different levels of exhaustibility and appropriability 35
Fig. 2.2 Positive and negative effects of the limited appropriability
of knowledge 40
Fig. 2.3 A welfare analysis of the positive and negative externalities
of knowledge appropriability 42
Fig. 3.1 The inducement of localized technological change 75
Fig. 3.2 Alternative shapes of the frontier of possible adjustments 77
Fig. 3.3 The equilibrium mix of switching and innovation in localized
technological change 77
Fig. 3.4 The localized introduction of technological changes 78
Fig. 6.1 Effects of R&D subsidies on R&D levels 153
vii
L t
ist of abLes
Table 4.1 Knowledge generation, exploitation and technological
change in Schumpeterian growth regimes 108
Table 4.2 System dynamics in Schumpeterian growth regimes 109
ix
CHAPTER 1
Introduction: The Economics of Knowledge
for the Knowledge Economy
Abstract This introduction presents the analytical framework imple-
mented by the book as the grafting of the tools elaborated by the eco-
nomics of knowledge and the legacy of Joseph Schumpeter to explore
the foundations of the new knowledge economy and the shift away from
the corporate growth regime. It frames the innovation process as a crea-
tive response based upon the accumulation, generation and exploitation
of knowledge and highlights the new structure of advanced economies
where knowledge is at the same time the prime input and output. It
emphasizes the limits of the new knowledge growth regime, raised by
the role of finance, income distribution and intellectual property rights
and recommends appropriate economic policies based upon an open
technology approach.
Keywords Economics of knowledge · Knowledge economy ·
Schumpeterian growth regimes · Open technology
The economic profession is reluctant to understand the aggregate and
macroeconomic implications of the radical structural discontinuity
brought about by the transition to the knowledge economy and the
challenges raised by the central role of knowledge as an economic good.
The decline of the industrial economy and the transition to the knowl-
edge economy in advanced countries take place amid several difficul-
ties. A major effort is necessary to understand this transition as a radical
© The Author(s) 2019 1
C. Antonelli, The Knowledge Growth Regime,
https://doi.org/10.1007/978-3-030-05508-0_1
2 C. ANTONELLI
structural change that questions not only the working of the economy of
advanced countries, but also the foundations of both economic analysis
and economic policy (Kuznets 1971).
Here, the quote from the Obituary of John Maynard Keynes by
Joseph Schumpeter seems most appropriate: “The social vision first
revealed in the Economic Consequences of the Peace, the vision of an eco-
nomic process in which investment opportunity flags and saving habits
nevertheless persist, is theoretically implemented in the General Theory
of Employment, Interest, and Money (Preface dated December 13, 1935)
by means of three schedule concepts: the consumption function, the effi-
ciency-of-capital function, and the liquidity-preference function. These
together with the given wage-unit and the equally given quantity of
money “determine” income and ipso facto employment (if and so far
as the latter is uniquely determined by the former), the great depend-
ent variables to be “explained.” What a cordon bleu to make such
a sauce out of such scanty material …… This permits many otherwise
inadmissible simplifications: for instance, it permits treating employ-
ment as approximately proportional to income (output) so that the one
is determined as soon as the other is. But it limits applicability of this
analysis to a few years at most—perhaps the duration of the “40 months’
cycle”—and, in terms of phenomena, to the factors that would govern
the greater or smaller utilization of an industrial apparatus if the latter
remains unchanged. All the phenomena incident to the creation and
change in this apparatus, that is to say, the phenomena that dominate the
capitalist processes, are thus excluded from consideration” (Schumpeter
1946: 510–512).
Schumpeter discussing the merit of the Marxian Doctrine acknowl-
edged that: “As a matter of fact, capitalist economy is not and cannot be
stationary. Nor is it merely expanding in a steady manner. It is incessantly
being revolutionized from within by new enterprise, i.e., by the intrusion
of new commodities or new methods of production or new commercial
opportunities into the industrial structure as it exists at any moment. Any
existing structures and all the conditions of doing business are always in
a process of change. Every situation is being upset before it has had time
to work itself out. Economic progress, in capitalist society, means tur-
moil. And, as we shall see in the next part, in this turmoil competition
works in a manner completely different from the way it would work in
a stationary process, however perfectly competitive. Possibilities of gains
to be reaped by producing new things or by producing old things more
1 INTRODUCTION: THE ECONOMICS OF KNOWLEDGE … 3
cheaply are constantly materializing and calling for new investments.
These new products and new methods compete with the old products
and old methods not on equal terms but at a decisive advantage that may
mean death to the latter. This is how “progress” comes about in capital-
ist society. In order to escape being undersold, every firm is in the end
compelled to follow suit, to invest in its turn and, in order to be able to
do so, to plow back part of its profits, i.e., to accumulate. Thus, every-
one else accumulates” Schumpeter (1942: 32).
The Ecole de la regulation has contributed much to exploring the
dynamics of transformation as a process punctuated by radical techno-
logical and structural changes. According to Michel Aglietta: “The study
of a movement, moreover, is the study of a change of state. If a system
is described as dynamic, then the constitutive relationships of the system
must have a logic of internal transformation. To conceive of the regu-
lation of a system transforming itself in this way is to see the changes
that occur in its relationship as such that these relationships can always
be organized into a system….There is no a priori reason why a trans-
formation must be more than a ‘plastic transformation’ of the relation-
ships that structure the system; if this were so, then continuity would
be assured and reproduction would be simple. But when actual social
systems are studies, historical experience confirms that transformation
means rupture, qualitative change” (Aglietta 1976/2000: 12–13).
Schumpeterian scholars, as Freeman and Louca, exploring the long-
term transformation of advanced economies note that: “The structural
transformation arising from these new industries, services, products and
technologies is inevitably associated with the combination of organiza-
tional innovations needed to design, use, produce, and distribute them”
(Freeman and Louçã 2001: 147).
All changes in the structure, organization, technology and knowledge
governance are intertwined not only at the firm level, but also and pri-
marily at the system level and reshape the entire architecture of interac-
tions and transactions with major effects on both upward and downward
complementarities (Dopfer et al. 2015).
The economics of knowledge provides the tools to analyze not only
knowledge as a peculiar economic good but also the processes by means
of which it is generated, accumulated and exploited. The advances of
the economics of knowledge enable to implement a systematic investi-
gation of the causes and consequences of the use of knowledge in soci-
ety not only at the microeconomic level but also at the macroeconomic