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Overview
Technological advance is the key driving force behind economic growth, argues Richard Nelson. Investments in physical and human capital contribute to growth largely as handmaidens to technological advance. Technological advance needs to be understood as an evolutionary process, depending much more on ex post selection and learning than on ex ante calculation. That is why it proceeds much more rapidly under conditions of competition than under monopoly or oligopoly.
Nelson also argues that an adequate theory of economic growth must incorporate institutional change explicitly. Drawing on a deep knowledge of economic and technological history as well as the tools of economic analysis, Nelson exposes the intimate connections among government policies, science-based universities, and the growth of technology. He compares national innovation systems, and explores both the rise of the United States as the world's premier technological power during the first two-thirds of the twentieth century and the diminishing of that lead as other countries have largely caught up.
Lucid, wide-ranging, and accessible, the book examines the secrets of economic growth and why the U.S. economy has been anemic since the early 1970s.
Synopsis
Technological advance is the key driving force behind economic growth, argues Richard Nelson. Investments in physical and human capital contribute to growth largely as handmaidens to technological advance. Technological advance needs to be understood as an evolutionary process, depending much more on ex post selection and learning than on ex ante calculation. That is why it proceeds much more rapidly under conditions of competition than under monopoly or oligopoly.
Nelson also argues that an adequate theory of economic growth must incorporate institutional change explicitly. Drawing on a deep knowledge of economic and technological history as well as the tools of economic analysis, Nelson exposes the intimate connections among government policies, science-based universities, and the growth of technology. He compares national innovation systems, and explores both the rise of the United States as the world's premier technological power during the first two-thirds of the twentieth century and the diminishing of that lead as other countries have largely caught up.
Lucid, wide-ranging, and accessible, the book examines the secrets of economic growth and why the U.S. economy has been anemic since the early 1970s.
Editorials
Boston Globe
No one has more tirelessly pointed out the shortcomings of neoclassical economic formulations of growth theory than Nelson. His essay on the links between science and invention in the case of the transistor alone is worth the price of the book. His concept of national innovation systems has become a durable part of the science policy landscape...[An] admirable volume.
— David Warsh
Business History
Whether read together or individually, [these] essays are of considerable interest to business historians. The major theme of the book, that technological innovation is a primary contributor to economic growth, is explored from theoretical, methodological, and narrative standpoints...Although most, but not all, of the articles are dedicated to developments in the United States, their insights have a far broader applicability...Whether judged as a whole or on a chapter-by-chapter basis, this is a valuable book that business historians should read carefully.
— Paul L. Robertson
Journal of Economics [UK]
The book contains ten papers that have been published in different professional journals between 1990 and 1994 with one paper dating back to 1962 and another published in 1981...For those readers that are familiar with Richard Nelson's work (and who would not be?) the book has the enjoyable déjôvu effect: it is nice to have the pieces together...The book is easy and enjoyable to read and recommended to a broad general public of economists.
— H. Albach
Washington Post Book World
[A] remarkably wise and perceptive collection of essays...[Nelson] provides an accessible introduction to growth theory. In unraveling the mystery of economic growth, Nelson argues that the keys are usually the things that the standard economic models leave out or take for granted: history, corporate cultures and political institutions. At the center of it is innovation, new technology, new ways of doing business—and how these ideas are dispersed through a firm, from one firm to another, from one country to another...Nelson resists the allure of simple formulas or sweeping prescriptions, sticking to his fundamental observation that growth is a dynamic process that takes many different forms and results from the interplay of lots of different factors.
— Steven Pearlstein