Innovation and the evolution of industries

The analysis of innovation and the evolution of industries has witnessed major progress in several areas. In the last years, several contributions at the empirical, appreciative, econometric and modelling levels have greatly advanced our understanding of innovation, industrial dynamics and the evolution of industries. This paper reviews these contributions. A discussion follows on four key challenges that are required for a better understanding of the relationship between innovation and the evolution of industries: the analyses of demand, knowledge, networks and coevolution.