Edward Elgar Publishing Knowledge and Investment: The Sources of Innovation in Industry (New Horizons in the Economics of Innovation series)

This innovative book analyses the role and importance of investment in knowledge and fixed capital as two distinct sources of technological change. It provides a balance to most of the recent literature on technological change, which focuses almost exclusively on R&D and intangible investment in innovation and technological assets. The author shows how innovative investment in fixed capital still represents a central part of innovation in firms. The book begins by reviewing the major economic approaches to technology and innovation. It discusses the progressive shift from capital (embodied) investment to disembodied investment including R&D and design. Using one of the most extensive data sources, Rinaldo Evangelista empirically tests whether disembodied technological activities are more important than traditional investment in productive capital. Perhaps surprisingly, the evidence suggests that fixed productive capital emerges as the most relevant and widespread source of investment in innovation across firms and industrial sectors. The author concludes that even in high-tech industries embodied and disembodied technological activities are complementary rather than substitutive. This book will be welcomed by those interested in technological and innovation studies, industrial organization and business strategy. Review ‘This book explores the circular relations between innovation and investments; in doing so it provides a new original bridge between the classical and post Keynesian traditions of analysis of investment and the neo-Schumpeterian approach to the knowledge based economy.’ -- Cristiano Antonelli, University of Turin and Collegio Carlo Alberto, Italy ‘. . . Rinaldo Evangelista has advanced our understanding of the sources of dynamism in economic development. I commend his book most strongly to everyone with an interest in this field of exciting research.’ -- From the preface by Christopher Freeman, SPRU – Science and Technology Policy Research, University of Sussex, UK and Maastricht University, the Netherlands ‘Rinaldo Evangelista’s book is a major step forward in the analysis of technological change. By comparing and contrasting embodied and disembodied forms of technology, he is able to give a much more complete analysis of technological change, its patterns and its costs. The findings should become central to empirical studies of national systems of innovation as well as to conceptualising technology.’ -- G.N. von Tunzelmann, SPRU – Science and Technology Policy Research, University of Sussex, UK Synopsis This work analyzes the role and importance of investment in knowledge and fixed capital as two distinct sources of technological change. It seeks to show that investment in fixed capital still represents the most relevant and widespread source innovation across firms and industrial sectors. About the Author Rinaldo Evangelista, Cnr-Irpps, Roma, Italy