Competition, variety and the geography of technology evolution

Change in evolutionary economics proceeds through the creative destruction of variety in firm characteristics. Firm routines, relational assets and the institutional environments in which firms operate shape the creation and destruction of variety. Despite the centrality of the concept of variety in evolutionary economics, analysis of the extent and the persistence of firm heterogeneity is rare. Notwithstanding the theoretical pronouncements of economic geographers who champion the difference that space makes, empirical investigation of firm variety over space is even rarer still. This paper attempts to remedy some of these empirical shortcomings exploring the spatial evolution of variety in techniques of production within three US manufacturing industries. The results suggest that technological variety exists and persists over time and that geography explains a significant portion of this variation.