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Capabilities and production theory

journal contribution
posted on 2023-06-08, 00:24 authored by Nick Von Tunzelmann, Qing Wang
The paper draws on a specification by Sen to model consumer capabilities and welfare, and extends this to modelling capabilities of producers and other agents. ‘Dynamic interactive capabilities’ are the outcome of successful interaction between evolving consumer and/or supplier capabilities and evolving producer capabilities, all occurring in ‘real time’ to meet the needs of dynamic competition in Schumpeter's sense. This involves learning on each side, as well as interactive learning between them. The paper then investigates the direction of both product and process changes in producers, driven by demand as well as supply factors through historical time and during structural change. Some consideration is given as to why orthodox production theory should have failed to broach so many of the issues which appear to be driving dynamic capabilities and productivity change in historical practice. Paths for further development of the capabilities approach are suggested.

History

Publication status

  • Published

Journal

Structural Change and Economic Dynamics

ISSN

0954-349X

Publisher

Elsevier

Issue

2

Volume

18

Page range

192-211

Pages

20.0

Department affiliated with

  • SPRU - Science Policy Research Unit Publications

Notes

The paper provides a critique of conventional economic theory of production from the viewpoint of `dynamic capabilities¿, and in the course of doing so also provides a much stronger analytical basis for theorising about those dynamic capabilities, by drawing on Amartya Sen¿s conceptualisation of `capabilities¿. Prof von Tunzelmann contributed about 90% of this paper, from concept through to writing.

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2012-02-06

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