Diversity of Innovative Strategy as a Source of Technological Performance

This paper explores the impact of diversity of innovative strategies of firms upon the industrial dynamics through a micro-simulation model. We consider two types of firms each one being characterised by a specific innovative strategy. Basically we assume that some cumulative firms adopt an internal learning by searching strategy, while noncumulative firms adopt an external learning strategy aiming at absorbing external sources of knowledge. The results show that the co-existence of the two types of firms leads to an oligopolistic structure characterised by asymmetries in the size of firms and high technological performances. Thus the diversity of innovative strategies generates a diversity in firms market shares and is a source of dynamic efficiency in the long run.