Chapter 3 examined the issue of the existence of Kondratieff waves. Such a pattern of growth was not observed for the period under consideration. This result raises serious doubts as to the validity of the recent long-wave literature that lays stress on the existence of regular long-wave clusters in innovation activity (Graham and Senge, 1980; Mensch, 1979; Van Duijn, 1981, 1983). Given the importance of technical change in accounting for output and productivity growth (Abramovitz, 1956; Solow, 1957), the evidence supporting innovation clusters would contradict the evidence of Chapter 3 and vice versa.

Some theoretical considerations

As was pointed out in Chapter 1, the role of innovation to explain Kondratieff waves was originally emphasised in the work of Schumpeter (1939). Many recent studies have made innovation the cause of a long-wave growth pattern by linking the concept of the product life cycle to the idea of an innovation cluster. Mensch (1979) provides an influential restatement of many of these ideas. Mensch does not postulate a strict long-wave theory but sees economic growth as being characterised by a series of intermittent innovative impulses that take the form of S-shaped growth patterns. He calls this a metamorphosis model, depicting long periods of growth and relatively short intervals of turbulence. The analogy with product life-cycle sigmoid curves is clear.

Mensch makes a distinction between minor improvement innovations and what he calls basic innovations.