Understanding Technical Change As an Evolutionary Process

by Richard R. Nelson

This book begins by discussing the growing appreciation by economists that technical change is a powerful force tied up with many arenas of economic activity. Nelson's central argument is that this recognition calls for a change in economic analysis to a style that better comprehends that technical change is an evolutionary process. New data is presented on the factors influencing technical change in different industries. These data permit a deeper look into the forces behind the great inter-industry differences in R and D and technical change. The book concludes with a detailed examination of the institutions involved in technical change in advanced capitalist economies. Parts of the system are keyed to rivalry, but there is inter-firm cooperation and sharing as well. There are public funds and institutions in the system, as well as private. Nelson's thought-provoking work combines in a masterly way deep theoretical insight with detailed understanding of the functioning of present-day institutions. This book is a contribution not simply to understanding of technical change, but to understanding of economic dynamics more generally.

Paperback

First published January 1, 1987

About the author

Richard R. Nelson was an American professor of economics at Columbia University. He was one of the leading figures in the revival of evolutionary economics thanks to his seminal book An Evolutionary Theory of Economic Change (1982) written jointly with Sidney G. Winter. He was also known for his work on industry, economic growth, the theory of the firm, and technical change. The book he edited, National innovation systems: A comparative analysis (1996) is one of the most influential in innovation studies.

Reviews

[Otto Lehto · Rating 3 out of 5]

Richard Nelson is one of the co-founders (with Sidney G. Winter) of the neo-Schumpeterian theory of innovation within the field of evolutionary economics. This book is based on his lectures given in the Netherlands. The lectures contain glimpses of some of Nelson's key views, but they are too scattered and superficial to be wholly representative of the depths of his most interesting ideas. The lectures are perfectly competent; this makes them a disappointment.

The book consists of three or four largely independent sections that are loosely tied around the central nexus of technical change and innovation. None of the sections are terrible, but some are more boring than others. The opening section is a very brief summary of the theory of evolutionary innovation akin to quasi-Darwinian lines. These ideas, unfortunately, are not developed any further in the book. The rest of the sections deal with more mainstream and less original topics, such as neoclassical public goods problems.

The section on survey data on industry perceptions is moderately interesting, but underdeveloped and forgettable. The section on government's role in innovation is suggestive, but again all too brief. The adjacent historical discussion on various government efforts to spur R&D in various advanced countries is superficial, uninteresting, orthodox, reliant on other people's (limited) research, and seemingly lacking in awareness of public choice problems.

The worst I can say about the book that it is surprisingly tame and orthodox. It doesn't play into Nelson's strengths, which are his original contributions to evolutionary innovation theory. The boring ideas are matched by a boring presentation: I find Nelson's prose exceedingly dry and tepid. There are better sources out there for learning about Nelson and Winter's evolutionary theories.