Receptive Capacity of Established Industries as a Limiting Factor in the Economy's Rate of Innovation

Patterns of intersectoral growth have featured prominently in the economic development literature for several decades. In particular, a fierce controversy between proponents of ‘‘balanced’’ and ‘‘unbalanced’’ growth dominated much of the discussion on development tactics in the 1950s and 1960s. Although the debate eventually died down and development economics has largely switched its focus to other areas, the question of the role of buoyant industries in promoting economic growth has persisted in other guises. For example, in recent decades there has been considerable, if fluctuating, interest in the ability of a few rapidly growing, and generally technologically advanced, industries to improve aggregate economic performance, as well as dispute as to whether this requires government involvement through the use of ‘‘industrial policy’’ or can best be achieved through purely private, market-based initiatives.