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The Theory of Innovation

Schumpeter, Christensen, Rogers, Kondratieff, Perez, and the schools that debate how innovation happens

A mind map of the theory of innovation as a field — the classical antecedents; the Schumpeterian tradition; neoclassical and endogenous growth; diffusion and learning curves; evolutionary and systems approaches; and the modern management, policy, and stagnation debates. Named thinkers, books, models, and debates with dates across six branches. This map is the theoretical spine of the Mind Maps "survey of innovation" series.

Classical Antecedents, pre-1900Schumpeterian TraditionNeoclassical & Endogenous GrowthDiffusion & Learning CurvesEvolutionary & SystemsModern Management & PolicyClassical political economyHeroic-inventor narrativesEarly machinery and manufacturingMax Weber and rationalizationProto-diffusion observationsJoseph Schumpeter — the founderKondratieff and the long wavesNeo-Schumpeterian revivalCarlota Perez and technological surgesInduced innovationSolow growth modelRomer and endogenous growthSchumpeterian growthMeasurement and dataMokyr and the economic history of ideasIdeas-are-harder-to-findEverett Rogers — the canonical frameworkBass model and formal diffusionLearning curves and experienceNetwork effectsMoore's Law and exponential forecastingSchmookler and demand-pullNelson-Winter evolutionary economicsBrian Arthur and increasing returnsPath dependence and history mattersDosi and technological paradigmsNational innovation systemsSTS — the social construction lineageOpen innovationChristensen and disruptionDynamic capabilities and resourcesPorter and strategy backdropLean, agile, and business-model innovationMission economics and the stateThe stagnation debateContemporary manifestosAdam Smith — Wealth of Nations, 1776 (division of labor, pin factory)David Ricardo — machinery chapter, Principles 3rd ed. 1821Karl Marx — Grundrisse (1857) and Capital (1867) — technology as historical driverFriedrich List — National System of Political Economy, 1841 (infant industry)John Rae — Statement of Some New Principles, 1834 (early innovation theorist)Thomas Carlyle — "Signs of the Times," 1829 (the Age of Machinery)Samuel Smiles — Lives of the Engineers, 1861–1862Biographies of Watt, Arkwright, Stephenson shape public narrativeGreat Man theory of invention — later critiqued by Schumpeter and STSCharles Babbage — On the Economy of Machinery and Manufactures, 1832Andrew Ure — The Philosophy of Manufactures, 1835Adam Ferguson — Essay on the History of Civil Society, 1767The Protestant Ethic and the Spirit of Capitalism, 1904–1905Bureaucracy and the iron cage — institutional conditions for innovationGabriel Tarde — The Laws of Imitation, 1890 (first theory of social diffusion)Observations on railroad, telegraph spread in 19th centuryTheory of Economic Development, 1911 / English 1934Business Cycles (2 vols.), 1939 — long waves, innovation clustersCapitalism, Socialism and Democracy, 1942 — creative destruction chapterEntrepreneur vs. inventor distinction — innovation as commercializationSchumpeter Mark I (entrepreneur-led) vs. Mark II (corporate R&D)Kondratieff long waves endorsed as innovation-drivenNikolai Kondratieff — The Major Economic Cycles, 1925 (translated 1935)~50-year waves driven by infrastructural technology clustersKondratieff executed, 1938 — work suppressed in USSR, revived by SchumpeterForrester system-dynamics long waves, 1977 — computational formalizationGerhard Mensch — Stalemate in Technology, 1975 (depression-triggered innovation clusters)Christopher Freeman — Economics of Industrial Innovation, 1974SPRU — Science Policy Research Unit, Sussex, founded 1966Freeman & Soete — Economics of Industrial Innovation, 3rd ed. 1997Nathan Rosenberg — Inside the Black Box, 1982 (learning by using)Perez — Technological Revolutions and Financial Capital, 2002Five technological revolutions: industrial, steam, steel, oil/mass production, ICTInstallation vs. deployment phases — the role of financial bubblesGreat surges framework — causal pattern of 50-year cyclesTurning point: the mid-surge crisis that separates installation from deploymentJohn Hicks — Theory of Wages, 1932 (induced innovation hypothesis)Hayami & Ruttan — Agricultural Development, 1971 (induced innovation in agriculture)Acemoglu — Directed Technical Change, QJE 2002Robert Solow — A Contribution to the Theory of Economic Growth, QJE 1956Solow — Technical Change and the Aggregate Production Function, RES 1957The "Solow residual" — unexplained productivity growth attributed to technologyTechnology as exogenous in original Solow modelSolow wins Nobel, 1987Paul Romer — Increasing Returns and Long-Run Growth, JPE 1986Romer — Endogenous Technological Change, JPE 1990Ideas as nonrival goods — the formal foundation of modern growth theoryRomer wins Nobel, 2018Jones — R&D-Based Models of Economic Growth, JPE 1995 (scale effects critique)Aghion & Howitt — A Model of Growth Through Creative Destruction, Econometrica 1992Quality-ladder models — innovation as replacement of existing goodsAghion, Akcigit, Howitt — Handbook chapter, 2014Klenow & Rodriguez-Clare — development accounting (TFP vs. factor accumulation)Zvi Griliches — hybrid corn diffusion and R&D returns, 1957Griliches — Issues in Assessing the Contribution of R&D, Bell Journal 1979NBER Patent Data Project — Hall, Jaffe, Trajtenberg, 2001Adam Jaffe — knowledge spillovers, QJE 1989Total factor productivity growth measurement — Jorgenson, HultenOslo Manual — OECD innovation measurement standard, 1992 (revised 1997, 2005, 2018)Joel Mokyr — The Lever of Riches, 1990Mokyr — The Gifts of Athena, 2002 (propositional vs. prescriptive knowledge)Mokyr — The Enlightened Economy, 2009Mokyr — A Culture of Growth, 2016 (Industrial Enlightenment)Bloom, Jones, Van Reenen, Webb — Are Ideas Getting Harder to Find?, AER 2020Research productivity halves roughly every 13 years across sectorsConstant per-researcher output requires exponentially more researchersRogers — Diffusion of Innovations, 1st ed. 1962 (5th ed. 2003)Five adopter categories: innovators, early adopters, early majority, late majority, laggardsFive innovation attributes: relative advantage, compatibility, complexity, trialability, observabilityS-shaped adoption curve as empirical regularityRogers' career at Iowa State, Michigan State, New MexicoFrank Bass — A New Product Growth Model for Consumer Durables, Mgmt Sci 1969Innovation + imitation coefficients (p and q)Bass model fits TVs, air conditioners, clothes dryers with one equationLogistic / Gompertz / Verhulst curves as diffusion formalismsModified Bass with marketing variables — Bass, Krishnan, Jain, 1994T. P. Wright — Factors Affecting the Cost of Airplanes, JAS 1936Wright's Law — cost declines by fixed % per doubling of cumulative productionBCG experience curve — Bruce Henderson, 1968Learning rate ~20% in many industries (each doubling cuts costs by ~20%)Nagy, Farmer, Bui, Trancik — Statistical Basis for Predicting Technological Progress, PLoS 2013Solar PV learning rate ~24% per doubling — Trancik groupBattery learning rate ~18% — Ziegler & Trancik, 2021Robert Metcalfe — Metcalfe's Law (network value ∝ n²), 1980Reed's Law — group-forming network value ∝ 2^n, 1999Michael Katz & Carl Shapiro — Network Externalities, Competition, AER 1985Two-sided markets — Rochet & Tirole, 2003David Easley & Jon Kleinberg — Networks, Crowds, and Markets, 2010Gordon Moore — Cramming More Components onto Integrated Circuits, 1965Moore's 1975 revised doubling time (every ~2 years)Kurzweil — Law of Accelerating Returns, The Singularity Is Near 2005Dennard scaling breakdown, ~2005 — end of free frequency gainsJacob Schmookler — Invention and Economic Growth, 1966Demand-pull: patent rates track capital investment, not scientific discoveryMowery & Rosenberg critique — technology push still mattersScience-push vs. demand-pull — the canonical debateRichard Nelson & Sidney Winter — An Evolutionary Theory of Economic Change, 1982Routines as the genes of organizationsSearch + selection + retention as evolutionary mechanismCritique of representative-firm equilibriumNelson earlier — The Rate and Direction of Inventive Activity, 1962 (edited volume)Arthur — Competing Technologies, Increasing Returns, and Lock-In, EJ 1989Path dependence — accidental early advantages get magnifiedArthur — The Nature of Technology, 2009 (combinatorial evolution)Santa Fe Institute — founded 1984Paul David — Clio and the Economics of QWERTY, AER 1985QWERTY as lock-in case study (contested by Liebowitz & Margolis, 1995)Path dependence — contingent histories produce persistent structureDouglass North — Institutions, Institutional Change and Economic Performance, 1990Giovanni Dosi — Technological Paradigms and Technological Trajectories, Research Policy 1982Paradigms define what problems are worth solving; trajectories are moves withinDosi & Nelson — An Introduction to Evolutionary Theories in Economics, 1994Technological regime concept (Nelson-Winter) — stable path of cumulative improvementFreeman — Technology Policy and Economic Performance: Japan, 1987 (coins NIS)Bengt-Åke Lundvall — National Systems of Innovation, 1992 (edited volume)Nelson — National Innovation Systems: A Comparative Analysis, 1993 (edited volume)Regional innovation systems — Cooke, AsheimTriple helix: university–industry–government — Etzkowitz & Leydesdorff, 1995Bruno Latour & Steve Woolgar — Laboratory Life, 1979Trevor Pinch & Wiebe Bijker — Social Construction of Facts and Artefacts, SSS 1984Michel Callon — Some Elements of a Sociology of Translation, 1986Langdon Winner — Do Artifacts Have Politics?, Daedalus 1980Susan Leigh Star — infrastructure studies; often undercreditedSCOT — Social Construction of Technology frameworkHenry Chesbrough — Open Innovation, 2003Closed → open innovation as paradigm shift for R&D labsEric von Hippel — Democratizing Innovation, 2005 (user innovation)Community-based innovation — Benkler, 2006Clayton Christensen — The Innovator's Dilemma, 1997Disruptive vs. sustaining innovationLow-end and new-market disruption as distinct patternsChristensen & Raynor — The Innovator's Solution, 2003Jobs-to-be-done frameworkChristensen's retrospective — What Is Disruptive Innovation?, HBR 2015Lepore critique — The Disruption Machine, New Yorker 2014Edith Penrose — Theory of the Growth of the Firm, 1959 (resource-based view ancestor)Wernerfelt — A Resource-Based View of the Firm, SMJ 1984Hamel & Prahalad — The Core Competence of the Corporation, HBR 1990David Teece, Pisano & Shuen — Dynamic Capabilities, SMJ 1997Absorptive capacity — Cohen & Levinthal, ASQ 1990Michael Porter — Competitive Strategy, 1980Competitive Advantage, 1985 — value chain; innovation as part of differentiationFive forces framework — the incumbent-firm lens Christensen later disruptsEric Ries — The Lean Startup, 2011Build-Measure-Learn; minimum viable product; pivotsAlexander Osterwalder — Business Model Generation, 2010Steve Blank — The Four Steps to the Epiphany, 2005Design thinking — IDEO, Stanford d.school; Tim Brown, 2008Mariana Mazzucato — The Entrepreneurial State, 2013State as risk-taker and innovator, not just market-failure correctorMazzucato — Mission Economy, 2021DARPA, NIH, NASA, NSF as evidenceIndustrial policy revival — CHIPS Act 2022, IRA 2022Tyler Cowen — The Great Stagnation, 2011Robert Gordon — The Rise and Fall of American Growth, 2016Peter Thiel — Zero to One, 2014 ("we were promised flying cars")Alex Tabarrok — Launching the Innovation Renaissance, 2011Mokyr counterargument — we are mid-revolution; productivity lagsBloom et al. 2020 empirical update — ideas getting harder to findPatrick Collison & Tyler Cowen — Progress Studies, Atlantic 2019Marc Andreessen — The Techno-Optimist Manifesto, 2023Effective accelerationism (e/acc) — Beff Jezos et al., ~2022AI-safety community — Eliezer Yudkowsky, MIRI, EA-adjacentDario Amodei — Machines of Loving Grace, 2024Progress Studies Institute — Patrick Collison, Tyler Cowen, othersThe Theory of InnovationBrian Tighe · Mind Maps
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