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PRODUCT INNOVATION AND ECONOMIC THEORY – USER-PRODUCER INTERACTION IN THE LEARNING ECONOMY

Product Inovation, Interactive Learning and Economic Performance

ISBN: 978-0-76231-156-9, eISBN: 978-1-84950-308-2

Publication date: 30 December 2004

Abstract

In this chapter it is shown that, in spite of the fundamental importance for economic growth of product innovation, standard economic theory – neo-classical as well as transaction cost approaches to industrial organization – tends to neglect it. It is also shown that moving the focus to product innovation leads to very different conclusions on how alternative institutional set-ups affect economic performance. Institutional set ups assumed to optimise allocation and minimise transaction costs do not support innovation and growth. That is why producer goods where innovation is a regular phenomenon are transacted neither in pure markets nor in hierarchies. The omnipresence of “organized markets” reflects the need for users as well as producers to engage in on-going information exchange and interactive learning in connection with product innovation.

Citation

Lundvall, B.-Å. and Lund Vinding, A. (2004), "PRODUCT INNOVATION AND ECONOMIC THEORY – USER-PRODUCER INTERACTION IN THE LEARNING ECONOMY", Christensen, J.L. and Lundvall, B.-A. (Ed.) Product Inovation, Interactive Learning and Economic Performance (Research on Technological Innovation, Management and Policy, Vol. 8), Emerald Group Publishing Limited, Leeds, pp. 101-128. https://doi.org/10.1016/S0737-1071(04)08005-9

Publisher

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Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited