Geography Reference
In-Depth Information
Development
of
technology
or
industry
Mutation and adaptation of
technological/industrial path in
response to endogenous and
exogenous factors. No lock-in to
equilibrium state
Possible eventual
maturation, exhaustion and
decline of path due to
endogenous or exogenous
factors
Time
Figure 3
.
4
An open, non-equilibrium-type model of path-dependent evolution
form of development endogenously generates the mechanisms of its own relative decline
and dissolution.
These dif erent possibilities seem to us to be highly relevant to discussions of the path-
dependent evolution of local and regional economies. But releasing the notion of path
dependence from any necessary connection with equilibrium states in turn raises a wide
set of issues about exactly how we understand evolution along an industrial or techno-
logical path.
4. Exploring non-equilibrium path dependence: economic evolution along paths
As we have seen, the notion of path-dependent equilibrium is based on the view that the
operation of feedback processes gradually increases the probability of a certain (equi-
librium) outcome. These processes cumulatively reinforce the direction of change. In
contrast, however, an open non-equilibrium interpretation of path dependence needs to
recognise that while institutions and past trajectories channel change, at the very same
time they also enable adaptation and the launch of new paths. Indeed, in some cases
the very same mechanisms alleged to produce path-dependent equilibria - increasing
returns, learning, network externalities and the adoption and spread of technological
standards - are precisely those that can act to maintain and even increase the probabil-
ity of adaptation and departures to new paths. We would contend then that a realistic
theory of path dependence needs to examine the conjunction of both sets of constraining
and enabling ef ects.
This non-equilibrium perspective has important implications for our understanding
of industry and product life-cycle approaches that attempt to explain evolution along
particular paths. According to product cycle theory, as products become more stand-
ardised and routinised, their production location shifts from creative seed-beds and core
