Innovation Heterogeneity, Schumpeterian Growth and Evolutionary Theorizing

Schumpeterian growth models revolve around two tacit assumptions that are at odds with the empirical evidence, namely: all innovations are equally important for economic growth (equipollent innovation) and all innovations occur in one sector only (confined innovation). The present paper shows that it is possible to dispose of both implicit assumptions by disaggregating the ‘ideas production function’ without altering the gist of the theoretical framework. The paper refers briefly to the concepts of macro and microinventions, and introduces the concept of ‘innovatory discontinuity’. The extended theoretical framework developed here throws light on the ongoing controversy between neoclassical and evolutionary theorizing.