Triggers of change: structural trajectories and production dynamics

Abstract

The transformation of production structures has been at the centre of the historical dynamics of capitalist economies since the first Industrial Revolution. The article concentrates on production processes as principal loci of structural economic dynamics along increasing and decreasing returns trajectories. These trajectories are triggered by structural opportunities and constraints embedded in production systems, and their historical realisation is subject to different institutional configurations-production units at different levels of aggregation. The approach envisioned suggests the possibility of governing economic dynamics by structural policies working on the technological and organisational conditions of production as well as on the configuration of production processes within production units. Capitalist economies have to rely on a mix of coordination devices across different production units and aggregation levels for capturing structural opportunities and avoiding structural constraints.

Economic structures, institutions and economic performance

“…Dasgupta and Stiglitz (1980), Nelson and Winter (1990) and Schumpeter (2008) argue that imperfectly competitive market structures are more conducive for innovation and technical progress. This is supported by Andreoni (2014), who explains that the process of structural learning and technical change are determined by the type of economic structure. Thus, in the second instance, economic activities with increasing returns are also important because they serve as a proximate source of innovation.…”

“…Robust growth is observed when an economy's production structure is composed of commodities with increasing returns (Andreoni and Scazzieri 2014;Dosi 1982;Hidalgo et al 2007;Nelson and Winter 1990;Reinert 2008). Structural change is the consequence of moving into or out of these economic activities, and this is captured in aggregate by sectoral changes.…”

Structural learning: Embedding discoveries and the dynamics of production

“…Focusing on them, engineers will start exploring new possible configurations of the production process, which may lead to serendipitously discovering 'singleton techniques' (Mokyr, 2002). Problems related to scale constraints, which arise both from indivisible fund inputs and indivisible processes, may trigger the discovery of innovative (structural as well as organisational) configurations of production processes (Andreoni and Scazzieri, 2013). A good example of this is the typical problems faced by small farmers and small firms when trying to gain access to indivisible fund inputs such as machines and other equipment.…”

The impact of foreign R&D activities on the MNC’s performance at home: evidence from the case of Swiss manufacturing firms

“…Given these special properties, specialisation in manufacturing implies a double productivity gain (it allows countries to get a 'structural change bonus' and to avoid a 'structural change burden'). The former results from transferring labour from agriculture to manufacturing, the latter 2 The different sources of increasing returns identified in the classical line of Smith, Babbage, Young and Kaldor are discussed in Andreoni and Scazzieri (2013). See Toner (1999) for a review of Kaldor's laws and their contributions to the Cumulative Causation Theory 3 This law is implicit in the idea stated by A.…”