4. DIFFUSION BY DISSEMINATION AND IMITATION
4.1. Some basic distinctions
The effect of technological change on economic welfare depends ultimately upon the degree to which innovations are diffused, or made available to potential producers and users. This diffusion process, and the structural context in which it occurs, pose difficult issues for the normative evaluation of performance. At the most fundamental level, once an innovation has been carried out, society benefits from the widest and freest possible access to it (barring external diseconomies in its application). But the prospect of unlimited access may retard the flow of future innovations by reducing would-be innovators’ incentives.
Certain basic distinctions need to be made at the ...
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