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Outline

Network Models of Innovation Process and Policy Implications

2011, Handbook on the Economic Complexity of Technological Change

https://doi.org/10.4337/9780857930378.00028

Abstract

Innovation is clearly a disequilibrium phenomenon and therefore a consideration of the path that innovation takes through the economic system is crucial to understanding the adjustment process for the economy. We have developed models of how innovation can pass through the economy calibrated to the actual relationships of businesses in different industries. These models consider not only the network characteristics but also the knowledge and competence of firms and their willingness to pass on new ideas. All of the results are calibrated to specially commissioned survey results. We consider the steps required to generate an innovation cascade and the time likely to be required to achieve this. Further, we review whether current policy programmes have the potential to be effective in fostering the effective introduction of innovation in the context of these data and models.