Directed innovation locks out alternative technological paradigms

The evolutionary focus on the co-evolution of those processes creating variety between economic agents and the competitive selection process that winnows in on that variety, means that an evolutionary perspective on policy must consider adaptation (Flanagan and Uyarra 2016, this issue; Witt 2003). Policies should not be viewed as general a priori answers, but as being about learning and emergence. Which policy is best in which environment will emerge from experimentation and trial and error. A technological trajectory, in turn, represents the direction of learning, experimentation, and progress within a technological paradigm. Therefore, technology development is a problem-solving activity, and a technological paradigm “embodies strong prescriptions on the directions of technical change” (Dosi 1982, 152). This is why market signals are limited in terms of providing direction to techno-economic development; they only work within the parameters of the paradigm, which means they influence the rate of change more than the direction. When two or more technological paradigms compete, markets may influence which one is selected (the one that minimizes costs). Once established, however, paradigms have a powerful “exclusion effect,” whereby some technological possibilities are discarded because they are incompatible with the prevailing paradigm and are therefore “invisible” to agents. Thus, a techno-economic system of innovation may be locked into a self-reinforcing, path-dependent trajectory (Dosi and Nelson 1994). This becomes a problem if the trajectory being followed (or the paradigm itself) is inferior or suboptimal to what could be achieved with technologies that transgress the paradigm (or with a different paradigm).