Innovation and Use: Some Models of Technology Adoption and Diffusion

In Innovation and Use, I emphasize the importance in technology adoption of devoting purposive effort to absorb and adapt foreign techniques. First, I advance a theory of technology adoption. The key feature of the model is that the information needed to make adopted ideas more appropriate for the firm's environment cannot be acquired automatically through repetitive experience in production; thus, the firm undertakes research and development to make the adopted ideas more efficient. The model predictions are consistent with several empirical regularities. Next, I extend the model to show that R&D spillovers across firms can generate a technology diffusion process. Finally, the last chapter shows that the transitional dynamics of endogenous technical change growth models that include imitation can do better than the neoclassical growth framework at accounting for observed cross-country differences in rates of economic development. The model can also explain several puzzling empirical regularities regarding the relation between public support to research and imitation (R&I) and economic development. This suggests that foreign ideas are a key determinant of imitation policy.