Economics of Innovation and Entrepreneurship notes

Korea and Australia have similar GDPs, though very different economies. We can view these differences as being structured as “Meso” units, which consist of a “Rule” and its manifestations. Initially, these rules will create a single manifestation, though over time the rule spreads in application, and the impact of the rule increases.

Under this framework, there are rules and there are operations. This is sometimes referred to as a bimodal system (mode one = Rule, mode 2 = Operation).

Rules change over time, though carriers do not. Well actually, carriers (commonly people) do change, though the rate and scale of change is not so relevant since we compare ‘adoption’ to ‘learning’, the former being much faster… the rate of change of carriers is less relevant to this analysis than the rate of change of rules. Adopting new rules does not change the carrier – it just changes the way things look. That said, different carriers can adopt rules differently, and differences in rules impact upon adoption patterns.

These differential adoption patterns and characteristics of carriers create growth and development through allowing carriers to see different ways of operating and using the rules.

New rules start in the head, and embed themselves in the environment – like a manual gearbox embedding itself as an automatic gearbox. Things become invisible.

A carrier can be an actualisation of multiple rules.

“Meso” is the central abstraction of evolutionary economics. Systems of meso form the order of the macro system… Deep structure: How the rules fit together vs Surface structure: How meso populations of rules fit together. You can do deep structure on whatever scale you like – in each case, the relationship between the rules changes the system. A surface analysis more looks at differential growth rates in a system (eg the amount of cable that had been laid in a telecommunication system – for example, Australia has a surface structure issue in the mining industry in that we do not have enough mining engineers even through the network is great).