competition is a primary driving force behind organisational change and technical innovation. Firms are divided into three groups … (the C-firms, the A-firms and the S-firms), according to how fare the intensity of competition had changed in recent years …. The propensity to change and adapt is much higher among the firms that have experienced the strongest rise in competition …

This paper concerns the operation of competition in the presence of a high rate of innovation and increasing returns …. Given free competition there is likely to exist, in this case, a tendency towards what may be called ‘dynamic equilibrium … this investment yields only a normal return. Thus, competition, increasing returns and innovation may co-exist. …