Growing by Leaps and Inches: Creative Destruction, Real Cost Reduction, and Inching Up

50 Pages Posted: 17 May 2002 Last revised: 22 Mar 2013

See all articles by Michael R. Darby

Michael R. Darby

University of California, Los Angeles (UCLA) - Global Economics and Management (GEM) Area; National Bureau of Economic Research (NBER)

Lynne G. Zucker

University of California, Los Angeles (UCLA); National Bureau of Economic Research (NBER)

Date Written: May 2002

Abstract

Most firms achieve perfective progress, incrementally improving commodities or productivity. But technological progress is concentrated in a few firms achieving metamorphic progress: forming or transforming industries with technological breakthroughs (e.g., biotechnology, lasers, semiconductors, nanotechnology). Unless congruent with incumbents' science and technology base, metamorphic progress promotes entry. Scientific breakthroughs embodied in discovering scientists, protected by natural excludability, and transferred by learning-by-doing-with at the bench generally drive metamorphic progress. Embodied knowledge is rivalrous and leads to entry and industry dominance by star-scientist-linked firms. Incorporating this scientific-entrepreneurial process is essential to improving - if not transforming - endogenous growth models.

Suggested Citation

Darby, Michael R. and Zucker, Lynne G., Growing by Leaps and Inches: Creative Destruction, Real Cost Reduction, and Inching Up (May 2002). NBER Working Paper No. w8947. Available at SSRN: https://ssrn.com/abstract=312660

Michael R. Darby (Contact Author)

University of California, Los Angeles (UCLA) - Global Economics and Management (GEM) Area ( email )

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Lynne G. Zucker

University of California, Los Angeles (UCLA) ( email )

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