Technology and Finance in Economic Growth and Structural Change

Abstract

On inspection of aggregated data and qualitative information, it appears that long-run rates of change in the financial and the technological structure follow a similar, although independent, pattern. In practice, financial innovations — which represent a part of the socio-institutional framework — occur as totally autonomous events and sooner or later are adopted in order to satisfy the financial requirements of new technological styles.¹ The discovery, development and commercial introduction of new technologies therefore appears to be closely related to the way in which innovative investment activities are financed. The process of technological change cannot be fully understood without identifying its relationship with the features of the financial instruments and institutions that characterise any given historical period. Here too, therefore, one may agree with Perez (1985, pp. 45–6) that the structural transformations that have historically helped to create the framework necessary for the emergence of a new mode of growth have generally also affected ‘the organization of the banking and credit systems’.