| Abstract: | Basic innovations tend to cluster in periods of discontinuity, when changes in the marginal efficiency of capital (amongst other things) lead to disappointing depreciation in the operative value of installed capital goods in stagnating industries, thus inducing investors to seek alternatives, and so making the economic system ready for new technologies. The conditions encouraging innovation are formulated in a contingency theory of changes in capital values, changes which occur as the economic influence bestowed by owning production facilities moves from one sector to another. This non-equilibrium theory allows short- and long-term forces of balance and dominance in economic exchange to be considered together. |
