Technological Regimes, Industrial Demography and the Evolution of Industrial Structures

Analyzes firms and industries in motion--i.e., industry demographics--by amalgamating new theories and empirical evidence. Particularly emphasizes the links between the technological regime underlying an industry and the observed patterns of industry demography. Industry evolution involves the startup of new firms, survival, growth, the development of a strategy of compensating factor differentials and the extent to which new firms displace incumbent enterprises. One common theory amongst all the aforementioned themes is that the dynamic process through which industries evolve is influenced by three major factors: technology, scale economies, and demand. It is inferred from the substantial evidence supporting distinct technological regimes that, under the routinized regime, a convergence often occurs between the expected value of new ideas (or potential innovations) across agents and decision-making hierarchies within the industry. In contrast, under the entrepreneurial regime there is often more divergence with regard to the expected value of new ideas (or potential innovations) across agents. The patterns of firm demography observed across industries are shaped to a large degree by the extent to which new economic knowledge converges or diverges across agents. It is also shown that the dynamic nature in which firms and industries evolve over time varies substantially from industry to industry. (SFL)