Knowledge transfer in an innovation simulation model

This analysisis informed by ideas ofevolutionary economics, in whichthe model of an economy is represented byheterogeneous companies interacting under several rules, bounded in theirability to assess different alternatives. It proposes an evolutionarysimulation model to determine the nature of innovation processes dominatingknowledge-driven economies, andfunctioning according to principles ofcreating and sharing new knowledge. Applying the concept of "cognitive distance," the model considersthe role of capital stock, productivity, and market development in knowledgeabsorption and spillovers, and the inherent economic and knowledge constraints.Four parameters and their effect on the economy are discussed -- interaction inthe knowledge space, probability of discovering a new technology, strategies ofinnovators and strategies of imitators. The findings show that the market underconsideration grows, with a higher probability of new technologies. The analysis of innovation versus imitation strategies shows an expectedbehavior under variation of all parameters. The findings also suggest that, inhighly innovative economies, a superior imitation strategy may occur. Theimitative firm is shown to be more successful economically, with the provisionthat this strategy may prove functional only after a significant period of timehas elapsed. The model's limitations are also considered, and recommendationsfor its use in both technology and innovation policies are made.(CBS)