Universität Augsburg, Institut für Volkswirtschaftslehre, Augsburg
This paper reviews empirical and theoretical work concerning the relationship between innovative activities of firms and the dynamics of industries. Stylized facts on industry evolution and the analysis of industrial dynamics in general are a first building block. This discussion just reflects a fundamental controversy between neoclassical mainstream approaches and the conception of evolutionary economics. It is shown which thorough analytical problems any investigation of industry dynamics driven by innovative activities has to cope with. Based on that empirical work concerning the techno-economic evolution of industries is presented. Following this it is shown how a formal model can give an explanation for the characteristic development patterns observed. Some fundamental results are discussed.