“…Since R&D investment is indeed one of the major determinants of innovation and capability accumulation, this is not a bad thing per se. Yet, Ciarli et al (2018), Dawid et al (2019), Hötte (2021), Dosi et al (2019b), Caiani et al (2019), Rengs et al (2020) Spillovers among firms Dosi et al (2019b), Caiani et al (2019), Rengs et al (2020) Worker's experience Dawid et al (2019), Hötte (2021) it is important to keep in mind that such a treatment leaves aside the consideration of product innovation in the consumption good sector -which certainly is most relevant for the developmental implications of innovation processes (Hausmann et al 2007;Hidalgo et al 2007). In alternative modelling frameworks, such as endogenous growth theory, the so-called expanding variety models that stand in the tradition of Grossman and Helpman (1991a) and Grossman and Helpman (1991b) do feature some kind of product innovation, yet even here, the focus is on product varieties rather than new products.…”