Paper to be presented at the DRUID Conference on "Competencies, Governance and Entrepreneurship", Bornholm, 9-11 June 1998.

Esben Sloth Andersen
Danish Research Unit for Industrial Dynamics (DRUID) and Department of Business Studies, Aalborg University. E-mail esa@business.auc.dk.

Abstract

The paper presents and formalises an approach to the evolution of the organisation of industry which starts from multi-activity firms, and which relates to economists like Young, Stigler, and Richardson. To capture the open-ended process of disintegration of industry, the paper operates with decomposable tasks and gives an account of the vertical and horizontal structure of production by means of weighted trees - in the graph-theoretical sense. Based on this addition to the analytical toolbox, the paper gives an account of the decomposition of industry as driven by the structural innovations and process innovations of firms that specialise and exchange in an open-ended evolutionary process.

Keywords: Vertical disintegration, horizontal disintegration, production trees, specialisation of production, specialisation of R&D, George B. Richardson

JEL classification: xxx