Chris Freeman & Francisco Louca Case

Chris Freeman & Francisco Louca

Freeman & Louca agree with Schumpeter on the following points:

Any satisfactory explanation of the evolution of capitalist economies must place innovations, their profitability, and their diffusion at the centre of analysis

The appearance and diffusion of innovations is inherently a very uneven process and is sometimes explosive, sometimes very gradual.

The changes that have occurred over the last two and a half centuries are well described as ‘successive industrial revolutions’.

Legitimization of the expression ‘revolution’

• The acceleration of the rate of growth of several key industries in the late eighteenth century, the wave of inventions and innovations that made such acceleration possible, and the shift from domestic to factory production did constitute a set of events which legitimate the use of the expression ‘revolution’

Relation to materials, energy supply, components, skills, infrastructure etc.

The innovation and diffusion of new products and new processes are not isolated events, but are always and necessarily related to the availability of materials, energy supply, components, skills, infrastructure etc.

o Schumpeter: “Innovations appear in clusters and are rarely, if ever, evenly distributed over time or in space.

It is not just the aggregate growth of the GDP that is important, but the emergence of new industries and the adoption of those new technologies, which make growth possible.

Long wave debate

Freeman and Perez use the expression ‘New technology Systems’ to analyse these constellations, taking particular the examples of electronics and synthetic materials to demonstrate the pervasive nature of some processes of technical change:

• The discontinuities that they entailed,

• The structural changes in the economic system,

• And patterns of employment and the long time scale involved in the processes of system