NDLI: Economic development by the creation of new sectors

Content Provider	Springer Nature Link
Author	Saviotti, Pier Paolo Pyka, Andreas
Copyright Year	2004
Abstract	The basic theme underlying this paper is qualitative change taking place during economic development. These changes in the composition of the economic system should become one of the most important variables in models of economic growth and development. Our knowledge of the relationship between economic development and qualitative change, however, is still very limited. This paper attempts to shed light on some important aspects of the role played by qualitative change in economic development, by laying the foundations of a model in which changes in the composition of the economic system are endogenously generated by the evolution of the system itself and, in turn, affect its future development. The model has a strong Schumpeterian flavour in that the first entrepreneur entering a market enjoys a temporary monopoly. This temporary monopoly is eroded by the entry of imitators, that gradually increases the intensity of competition. The saturation is reinforced as the demand for what was a new product comes to be satisfied. In this way the adjustment gap initially created by the innovation is eliminated transforming a niche into a mature market, which becomes one of the routines of the economic system. As soon as a sector becomes saturated there is an increasing inducement for incumbent firms to exit and to create a new niche, where once more they will have a temporary monopoly. To put it in another, slightly different, form, we can say that economic development is a process in which new activities emerge, old ones disappear, the weight of all economic activities and their patterns of interaction change.
Starting Page	1
Ending Page	35
Page Count	35
File Format	PDF
ISSN	09369937
Journal	Journal of Evolutionary Economics
Volume Number	14
Issue Number	1
e-ISSN	14321386
Language	English
Publisher	Springer-Verlag
Publisher Date	2004-01-01
Publisher Place	Berlin, Heidelberg
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Economic growth and development Qualitative change Neo-Schumpeterian-economics
Content Type	Text
Resource Type	Article
Subject	Economics and Econometrics Business, Management and Accounting

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1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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