PRODUCT INNOVATION AND ECONOMIC THEORY – USER-PRODUCER INTERACTION IN THE LEARNING ECONOMY

Bengt-Åke Lundvall; Anker Lund Vinding

doi:10.1016/S0737-1071(04)08005-9

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Research on Technological Innovation, Management and Policy

ISSN: 0737-1071
Series editor(s): Professor Robert A. Burgelman and Professor Henry Chesbrough

Subject Area: Enterprise and Innovation

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PRODUCT INNOVATION AND ECONOMIC THEORY – USER-PRODUCER INTERACTION IN THE LEARNING ECONOMY

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Title:	PRODUCT INNOVATION AND ECONOMIC THEORY – USER-PRODUCER INTERACTION IN THE LEARNING ECONOMY
Author(s):	Bengt-Åke Lundvall, Anker Lund Vinding
Volume:	8 Editor(s): Jesper L. Christensen and Bengt-Ake Lundvall ISBN: 978-0-76231-156-9 eISBN: 978-1-84950-308-2
Citation:	Bengt-Åke Lundvall, Anker Lund Vinding (2004), PRODUCT INNOVATION AND ECONOMIC THEORY – USER-PRODUCER INTERACTION IN THE LEARNING ECONOMY, in Jesper L. Christensen and Bengt-Ake Lundvall (ed.) Product Inovation, Interactive Learning and Economic Performance (Research on Technological Innovation, Management and Policy, Volume 8), Emerald Group Publishing Limited, pp.101-128
DOI:	10.1016/S0737-1071(04)08005-9 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Chapter Item
Abstract:	In this chapter it is shown that, in spite of the fundamental importance for economic growth of product innovation, standard economic theory – neo-classical as well as transaction cost approaches to industrial organization – tends to neglect it. It is also shown that moving the focus to product innovation leads to very different conclusions on how alternative institutional set-ups affect economic performance. Institutional set ups assumed to optimise allocation and minimise transaction costs do not support innovation and growth. That is why producer goods where innovation is a regular phenomenon are transacted neither in pure markets nor in hierarchies. The omnipresence of “organized markets” reflects the need for users as well as producers to engage in on-going information exchange and interactive learning in connection with product innovation.