კონფერენცია

∘ Vladimer Papava ∘ Tamar Tapladze ∘
ON THE SCHUMPETERIAN THEORY OF ECONOMIC DEVELOPMENT, THE CONCEPT OF COMBINATORIAL AUGMENTATION AND THE OVERCOMING FROM THE TECHNOLOGY TRAPS

Summary

The Schumpeterian interpretation of economic development is based on the assumption that new combinations, as a rule, appear side-by-side with old ones. According to the combinatorial augmentation concept, the resources for the old combinations are practically useless for some new combinations as they require the usage of qualitatively new resources. It is noteworthy that theoretically the realization of catching up can be achieved most quickly through Schumpeter’s creative destruction process; however, in this case the biggest opposition comes from the political forces standing behind the old combinations. In the case of combinatorial augmentation, such opposition is weaker as the old and the new combinations can co-exist as they exist in different sectors (or sub-sectors) of the economy of a single country. For the creative destruction of these old combinations, it is important for the government to facilitate the process of combinatorial augmentation as in this case a relatively high level of economic growth can be achieved which will, in its own right, facilitate in overcoming “technology traps” which exist on the basis of the old combinations.

Keywords: economic growth, catching up, new combinations, creative destruction, combinatorial augmentation, technology traps.

Ivane Javakhishvili Tbilisi State University Paata Gugushvili Institute of Economics International Scientific C O N F E R E N C E S "ECONOMY – XXI CENTURY"

E ISSN 2587 - 4691	∘ Vladimer Papava ∘ Tamar Tapladze ∘ ON THE SCHUMPETERIAN THEORY OF ECONOMIC DEVELOPMENT, THE CONCEPT OF COMBINATORIAL AUGMENTATION AND THE OVERCOMING FROM THE TECHNOLOGY TRAPS Summary The Schumpeterian interpretation of economic development is based on the assumption that new combinations, as a rule, appear side-by-side with old ones. According to the combinatorial augmentation concept, the resources for the old combinations are practically useless for some new combinations as they require the usage of qualitatively new resources. It is noteworthy that theoretically the realization of catching up can be achieved most quickly through Schumpeter’s creative destruction process; however, in this case the biggest opposition comes from the political forces standing behind the old combinations. In the case of combinatorial augmentation, such opposition is weaker as the old and the new combinations can co-exist as they exist in different sectors (or sub-sectors) of the economy of a single country. For the creative destruction of these old combinations, it is important for the government to facilitate the process of combinatorial augmentation as in this case a relatively high level of economic growth can be achieved which will, in its own right, facilitate in overcoming “technology traps” which exist on the basis of the old combinations. *Keywords:* economic growth, catching up, new combinations, creative destruction, combinatorial augmentation, technology traps.