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Evolutionary theory is enjoying a renaissance; in many disciplines, including economics, there has been a substantial flourishing of ideas that does much more than pay scholarly homage to one of the principal scientific developments of all time. For economists interested in innovation, competition, growth and development, an interest in the evolutionary idea is not difficult to establish; for the central empirical fact of the past two centuries, if not longer, has been sustained change and transformation in the patterns of activities that define modern economies. The evidence is pervasive and compelling. The creation of new activities, the demise of established ones and the constant shifts in the economic importance of surviving activities are ever-present symbols of the changes taking place in many different locations at different rates. The structural and qualitative transformations they produce in our economic world in comparatively short spaces of time are remarkable indeed – nothing less than a continuous remodelling and shifting around of the economic furniture.
Two principal approaches to evolutionary theory provide a powerful framework within which to order and comprehend these self-transforming events and make sense of the colourful tapestry of economic change. The two meanings of evolution I shall refer to are the traditional, developmentalist idea of the internal unfolding of entities, and the modern idea – post-Darwinian – of evolution as the adaptation of populations of entities under a guiding process of competitive selection.
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