The usefulness of evolutionary models for explaining innovation. The case of the Netherlands in the nineteenth century

Why do nations and industrial sectors cease to be pioneers? This question is discussed for the case of The Netherlands. Why was innovation in The Netherlands in the nineteenth century virtually limited to elaborating on developments in other countries whereas before it had been a technological paradise? It is argued here that no single reason can account for this loss of technological leadership. A complex of — often mutually reinforcing — factors was at work, some more important than others depending on the sector. The core of the explanation is that the Dutch had developed their own technological regime which was perfected before the nineteenth century. When a new regime emerged elsewhere it was difficult for the Dutch to adjust because of a complex set of barriers embedded in the existing technological regime. The inclination was to revitalise the old merchant capitalist regime and with success — albeit limited in the long run —, as some of the cases in the article show. This conclusion leads to a further question: How do regime shifts occur? Drawing on an evolutionary model, it is argued that new technologies emerge in technological niches, which after a process of branching can lead to a regime shift. Such a shift happens when successful niche formation coincides with a number of favourable external developments. Successful niche formation depends on the articulation of expectations, the coupling of new markets and new technologies, the development of new networks and the emergence of new competencies.