Radical Innovations, Follow-through Innovations and Growth: the Example of West German Industry

Abstract

In Part II we found empirical evidence of a long wave pattern in radical innovations. Our interpretation suggested that there is some causal link between these long waves of radical innovations and the long wave fluctuations in aggregate output as observed in Part I. In this chapter we shall consider the relationship between innovation and growth patterns in a cross-sectional view. If the hypothesis is correct that the 1930s–1950s wave of radical innovations had a major impact on innovation and growth in the postwar period, then the following hypotheses should hold:

• 1. ‘Follow-through’ hypothesis: the radical innovations from the 1930s–1950s should be followed, during the postwar period, by series of related innovations of various types; in other words, the large stream of innovations during the 1950s–1970s should concentrate in those sectors in which radical innovations had previously been introduced.

• 2. A somewhat uneven distribution of innovations by sectors should correlate with systematic differences in the speed of growth of individual sectors.