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Evolutionary Economics, Routines, and Dynamic Capabilities

This paper explores the role of evolutionary economics as a key influence on strategic management and especially on the dynamic capabilities framework.

David J Teece WP Thumbnail

25 October 2022

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UCL Institute for Innovation and Public Purpose (IIPP) Working Paper Series: IIPP WP 2022/17

Forthcoming in The Handbook of Evolutionary Economics (Routledge), edited by Richard Nelson, Kurt Dopfer, Jason Potts and Andreas Pyka.

Authors:

  • David J Teece | Professor at the Graduate School at the University of California, Berkeley and Faculty Director of the school’s Tusher Initiative for the Management of Intellectual Capital.

Reference:

Teece, D, J. (2022). Evolutionary Economics, Routines, and Dynamic Capabilities. UCL Institute for Innovation and Public Purpose, Working Paper Series (IIPP WP 2022-17). https://www.ucl.ac.uk/bartlett/public-purpose/wp2022-17.

Abstract:

Evolutionary economics has been a key influence on strategic management and especially on the dynamic capabilities framework, where it is a foundational pillar. However, the emphasis by evolutionists is on fleshing out a theory of routines while downplaying the bold entrepreneurial moves that drive the business enterprise — and the economic system — forward. The dynamic capabilities framework, by embracing the role of entrepreneurial managers, including the development of a change-oriented organisational culture, the achievement of asset alignment and the placing of bold (but smart) bets, provides the basis for a more realistic model of firms as they compete in fast-changing and uncertain business environments.