Complementarity constraints and induced innovation. Some evidence from the first IT regime.

Werner Hölzl, Andreas Reinstaller

Publication: Working/Discussion PaperWU Working Paper


Technological search is often depicted to be random. This paper takes a different view and analyses how innovative recombinant search is triggered, how it is done and what initial conditions influence the final design of technological artefacts. We argue that complementarities (non-separabilities) play an important role as focusing devices guiding the search for new combinations. Our analysis takes the perspective of technology adopters and not that of inventors or innovators of new products. We illustrate the process of decomposition and re-composition under the presence of binding complementarity constraints with a historical case study on the establishment of the First IT Regime at the turn of the 19th century. (author's abstract)
Original languageEnglish
Place of PublicationVienna
PublisherInst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business
Publication statusPublished - 2003

Publication series

NameWorking Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness"

WU Working Paper Series

  • Working Papers Series \ Growth and Employment in Europe Sustainability and Competitiveness

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