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The impact of market size and users’ sophistication on innovation: the patterns of demand and the technology life cycle
- Autor(in)
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Friedrich-Schiller-Universität Jena. Wirtschaftswissenschaftliche Fakultät
- Erschienen
- 31. Juli 2007
- Nummer des Discussion-Papers
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2007-046
- Schlagwort(e)
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demand
industry life cycle
innovation
- Zusammenfsg.
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The aim of this paper is an investigation on the role of demand in industrial dynamics. Despite the decades-long debate on demand and innovation, theory still lacks a comprehensive analytical formulation. This paper proposes a model where demand is conceived as a peculiar blend of two conditions, market size, and users’ sophistication. These conditions drive firms’ incentives to innovate. As main outcome, the paper proposes both a theoretical taxonomy of sectors and an original explanation of technological life cycle.
- article pub. typess JER
- Research article
- article languages JER
- Englisch
- article research fields JER
- evolutionary economics
- JEL-Classification for JER
- O31 - Innovation and Invention: Processes and Incentives ; O33 - Technological Change: Choices and Consequences; Diffusion Processes ; L15 - Information and Product Quality; Standardization and Compatibility