Geography Reference
In-Depth Information
When examining economic growth over a long period, starting with the time of the
Industrial Revolution until about 1870, it can be observed that new technologies and the
consequent rise in the productivity level are at the basis of important structural changes
(Maddison, 1991; Pasinetti, 1981). New technologies and organisational production
methods increased productivity and caused millions of people to shift to the strongly
developing manufacturing sectors, with a strong ef ect on urban growth. The impact of
the Industrial Revolution on the economic and spatial structure was enormous. Many
new regional and urban developments could be observed. The rise of 'Black Cities' in
England, Germany and the US are proofs of this impact. Boschma (1994) has investi-
gated the development of interregional shifts of economic activities during the period of
the Industrial Revolution in Great Britain and Belgium.
Cohen (1994) and Hellyer (2003) have contended that the relation with the 'Scientii c
Revolution' has been decisive for the development of technology and the Industrial
Revolution. Mokyr (2002) emphasised the endogenous nature of this process of eco-
nomic growth by looking at the strong interrelations between applicable scientii c
research and technological and industrial developments. He found that this 'application-
oriented approach to science' was particularly strong in the Anglo-Saxon world, a main
reason for the Industrial Revolution to happen there i rst and only later in the continen-
tal countries. According to the new endogenous growth theory, R&D and investment
are endogenous to the economic process (Helpman, 2004; Romer, 1986). But that theory
does not encompass the element of time and the sources of dynamism. The discussion
on endogenous or exogenous inl uences has also been dealt with in the 'long wave' theo-
ries.
Many theories have been developed on long-term economic growth in relatively
ordered patterns (van Duijn, 1979, 1983). In Russia Kondratief (1926) developed his
'theory of economic cycles', that lasted 50 to 60 years. The Dutch van Gelderen (1913,
under the pseudonym Fedder), the Belgian Mandel (1975), and the Austrian Schumpeter
(1912 [1934]) attempted to construct theories explaining the 'cycles', or the 'long waves'
of economic development. They emphasised the existence of a regularity of the waves,
meaning that certain patterns of the growth process return in every new cycle in ordered
patterns. The development and the demise of cycles were inherently endogenously deter-
mined, although every new cycle was based on new technologies and new impulses from
investment in capital goods and infrastructure. The (young) Schumpeter emphasised the
role of entrepreneurs (Schumpeter, 1912 [1934]). He was not so explicit on the longer
cycles, as he focused more on business cycles with shorter amplitudes than the 50 or 60
years of Kondratief . He explained the rise of new growth, the crisis and the recovery
by the introduction of fundamental innovations by entrepreneurs and the replacement
of old by new products. His explanation was that crises were a motivating factor for
entrepreneurs to be risk-taking and innovative. He also contended that economic crises
could be explained endogenously, as a result of investments in R&D and of exploring
new opportunities and new sources for proi t enabled by the introduction of innovations.
Later Schumpeter (1943) emphasised the role of larger corporations in the innovation
process, because the costs of R&D became too high for the smaller i rms. Nevertheless
he accepted that even then economic depressions were challenges to entrepreneurs, and
could stimulate research and risk-taking, the rise of new technologies, new i rms and new
sectors, but could also lead to 'creative destruction', the demise of old i rms and sectors,
