FIELDS OF INFLUENCE OF TECHNOLOGICAL CHANGE IN INPUT‐OUTPUT MODELS

ABSTRACT One of the major criticisms directed at the use of input‐output models has been their inability to handle technological change in coefficients induced by new innovations. In this paper, we show how the notion of a field of influence can be used to measure the effects of technological change. Furthermore, technological change can be presented as a process of competition for inputs as a result of innovation spread. In the input‐output model, this progress of the competition can be modelled as a Markov process or more generally us a logistic process and the translation of this competition to changes in coefficients (and thus to changes in the field of influence) provides a rich conceptual and analytical framework for linking innovation changes and their associated indirect effects on industrial structure. Competitive innovations will have the potential to change the production Structure, the location of production and the distribution of income. thereby enriching our understanding of the interaction between spatial, sectoral and income dynamics within the input‐output framework.