Evolutionism, Innovation and National Development: The Role of National Companies in Current Economic Dynamics.

• Author: Sanchez, Erick Cantillo

INTRODUCTION

At the current context of modern capitalism, the appropriate combination of categorical frames, like evolutionism, innovation and national-based firms, are considered important for understanding the problem of efficient insertion of national-based companies in national and international markets. It is an unavoidable situation for the national development process. The present article is about: a) the foundations of Schumpeterian evolutionism and innovation and b) efficiency increase in businesses, starting with the possible relation between evolutionary economic theory, innovation and organizational routines. For this purpose, this article is composed of three sections: First, economic evolutionism is reviewed from a Schumpeterian perspective; second, innovation is conceptualized and characterized; and, finally, the importance of adapting organizational routines is described to reach bigger operational efficiency in national-based companies.

SCHUMPETERS ECONOMIC EVOLUTIONARY THEORY

Economic evolutionism is a wide theoretical and empirical knowledge. That is why it is hard to sum up in one article the whole point of evolutionary theory. So the way to present this knowledge field is by presenting some basic elements of Schumpeter's theory. Schumpeter is considered one of the founders of evolutionary economic theory. Andersen (2012) proposed three models with the purpose of synthesizing that work:

- Mark I. Describes economic evolution as the result of interaction between innovative individual businessmen and the companies already established and based on routines.

- Mark II. Describes the economic evolution as the result of oligopoly competition between established companies.

- Mark SC. Describes socio-economic evolution as the process of co-evolution among the main society sectors.

The "evolution" that Schumpeter analyzes can be described as an open process that combines innovation, behavioral inertia and selection. In that sense, the concept of "Schumpeterian entrepreneurs," or s-entrepreneurs, is for those who create companies supported on an innovative base. The creation of innovative firms require energy from the creative capacity of the entrepreneurs, but also of elements such as bank financing. However, the implications of the Mark I Model are that for the creation of innovation-based companies obtaining financing, produce, selling and taking profits is not enough, because this cycle is the one that causes harm to firms.

When there is a process of this nature, companies run out of energy and strength. They don't grow or prosper. Cash stays in bank payments or in the profits that the entrepreneur appropriates. This is precisely the opposite of Mark I and are practices that lead to the extinction of innovation business.

The Mark I is an evolutionary process that requires that the entrepreneur adapt and introduce into their organization new routines that could translate into important changes in the company's innovative base and allow them to take advantage of bank financing as a real source of change in the different levels of the structure of the company. With that, then there can be an innovative company that evolves and adapts to the market to the context in which it is found, and thus emerges the Schumpeterian entrepreneur.

Schumpeterian businessmen with innovations, routines and push are constituted as the wave of " S-entrepreneurs." With them, innovation follows and it works its way, not automatically but with the new meaning that concepts such as capital, interests, investments and profits take.

The Mark II Model is more oriented to the political, scientific and family sectors and the influences that these sectors can have on the behavior patterns of consumers, which leads to the evolution processes of the companies contained in an oligopolistic market structure. The variables that affect the oligopoly have an exogenous nature. It is as if the lens with which we are analyzing the economic system is enlarged and we see the phenomenon, not only from the company, but from the companies as a whole group and in relation to their exogenous sectoral context.

The Mark SC Model focuses more on the effects of the Schumpeterian entrepreneur and innovation (both in a micro and in a macro evolution), in the socioeconomic field. In other terms and without falling into reductionist functionalisms, Mark SC analyzes how the Schumpeterian entrepreneur's own evolution affects dynamics and social metabolism and, in turn, how the company reacts to changes in social behavio, that finally varies, largely due to the changes generated by the introduction of innovations and the consequent effect on products, their prices and the way to distribute and consume these products in the complex market system of capitalism.

The process of economic evolution can change according to the situation in which innovations are introduced by individual entrepreneurs or other situations in which innovations are mainly made by established companies.

As you can see, following Schumpeter, the company, the entrepreneur and innovation are central to social and economic evolution. In the following section, it is necessary to address the following question: what is innovation?

INNOVATION

Classics authors have already referred to the...