Changing boundaries and structure of a technological system: lessons from UK retail banking

This article investigates the factors that have induced and shaped the process of industry evolution of banking in the United Kingdom and, in particular, the reorganization of the retail payments system. It will look at how the effects of technical progress within a changing regulatory framework have contributed to the flourishing of new consumer services, of increasingly specialized technologies and of new models of business organization. In relation to these issues, the paper develops an interpretative framework based on the rapidly expanding body of literature on technological systems. In so doing it argues also that the organization of the payment system has evolved towards a multilayered and increasingly heterogeneous industry in which competition has been fuelled at different levels by the growing diversity of the ecology of agents involved, as well as by the emerging patterns of interaction across them.

Changing boundaries and structure of a technological system: lessons from UK retail banking

This article investigates the factors that have induced and shaped the process of industry evolution of banking in the United Kingdom and, in particular, the reorganization of the retail payments system. It will look at how the effects of technical progress within a changing regulatory framework have contributed to the flourishing of new consumer services, of increasingly specialized technologies and of new models of business organization. In relation to these issues, the paper develops an interpretative framework based on the rapidly expanding body of literature on technological systems. In so doing it argues also that the organization of the payment system has evolved towards a multilayered and increasingly heterogeneous industry in which competition has been fuelled at different levels by the growing diversity of the ecology of agents involved, as well as by the emerging patterns of interaction across them.

Cash and the Counter: Capabilities and Preferences in the Demand for Banking Technologies

The main argument of this paper is that consumption and demand, like production, are discovery processes guided by trial-and-error and learning by consuming. The key question that is addressed is: how do consumers deal with innovation? By bringing together a number of threads within the innovation literature my claim is that consumers, akin to firms, follow routines that shape their consumption bundle, conceived here as an ensemble of activities rather than a bunch of goods. The analysis developed in the paper takes a very specific angle by elaborating on empirical evidence on the patterns of use of retail payment services in the United Kingdom to appreciate how consumption and demand can be shaped by the intertwined evolution of capabilities and preferences.Retail Banking; Innovation; Demand; Consumer Capabilities

The evolution of retail banking services in United Kingdom: a retrospective analysis

The purpose of this paper is to assess the sequence of technological changes occurred in the retail banking sector of the United Kingdom against the emergence of customer services by developing an evolutionary argument. The historical paradigm of Information Technology provides useful insights into the ‘learning opportunities’ that opened the way to endogenous changes in the banking activity such as the reconfiguration of its organizational structure and the diversification of the product line. The central idea of this paper is that innovation never occurs without simultaneous structural change. Thus, a defining property of the banking activity is the diachronic adaptation of formal and informal practices to an evolving technological dimension reflecting the extent to which the diffusion of innovation (re)generates variety of micro level processes and induces industry evolution.Information Technology; Retail Banking; History of Technology; Innovation Systems.

Co-evolution of capabilities and preferences in the adoption of new technologies

The objective of this paper is to propose a multidisciplinary approach for the analysis of demand and innovation. It combines insights from studies on technology diffusion, evolutionary economics and cognitive psychology to argue that consumption and demand are learning processes driven by trial-and-error, rather than by ex-ante maximization. The paper presents a heuristic synthesis to incorporate learning processes in the determination of consumption preferences and capabilities. The case of banking service innovation in the UK is presented as an illustrative example of the outlined dynamics.Demand, Innovation, Technology Adoption, Learning

Cash and the Counter: Capabilities and Preferences in the Demand for Banking Technologies

The main argument of this paper is that consumption and demand, like production, are discovery processes guided by trial-and-error and learning by consuming. The key question that is addressed is: how do consumers deal with innovation? By bringing together a number of threads within the innovation literature my claim is that consumers, akin to firms, follow routines that shape their consumption bundle, conceived here as an ensemble of activities rather than a bunch of goods. The analysis developed in the paper takes a very specific angle by elaborating on empirical evidence on the patterns of use of retail payment services in the United Kingdom to appreciate how consumption and demand can be shaped by the intertwined evolution of capabilities and preferences.Retail Banking; Innovation; Demand; Consumer Capabilities

A taxonomy of multi-industry labour force skills

This paper proposes an empirical study of the skill repertoires of 290 sectors in the United States over the period 2002–2011. We use information on employment structures and job content of occupations to flesh out structural characteristics of industry-specific know-how. The exercise of mapping the skills structures embedded in the workforce yields a taxonomy that discloses novel nuances on the organization of industry. In so doing we also take an initial step towards the integration of labour and employment in the area of innovation studies

Where Did They Go? A Study on Newly Established Universities and Graduate Mobility in Finland

This paper investigates cross-regional mobility in Finland using individual-level data on a cohort of people over a period of 15 years. The backdrop is that of the institutionalization of science and technology policy in the 1960s, part of which consisted in the expansion of universities in five regions. This had a threefold rationale: increasing participation rates to higher education, widening the recruitment base by facilitating young generations the right to study in their native regions, and stimulating regional economic development by providing skilled labour force. Our empirical analysis reveals high levels of spatial mobility and uneven retention rates across regions. Despite the policy action, graduates are still attracted towards the capital city Helsinki. Through a binary logit regression model we observe that mobility is influenced by the type of studies and to a lesser extent by the socioeconomic background.Higher Education; Regional Development; Labour Mobility

Innovation, human capital and earning distribution: towards a dynamic life-cycle approach

Empirical anomalies in the dynamics of earnings following the emergence of new ICT technologies are not consistent with various re-elaborations of the human capital theory. The first part of the paper reviews critically this literature and highlights an important gap concerning the role of institutional infrastructures for the systematisation and diffusion of new knowledge. The dynamic life-cycle approach elaborated in the second part provides a coherent account of the evidence, and indicates interesting implications for innovation and educational policies.Innovation; Human Capital; Earning Distribution;

An Evolutionary Theory of Household Consumption Behavior

Evolutionary economics badly needs a behavioral theory of household consumption behavior, but to date only limited progress has been made on that front. Partly because Schumpeter's own writings were focused there, and partly because this has been the focus of most of the more recent empirical work on technological change, modern evolutionary economists have focused on the "supply side". However, because a significant portion of the innovation going on in capitalist countries has been in the form of new consumer goods and services, it should be obvious that dealing coherently with the Schumpeterian agenda requires a theory which treats in a realistic way how consumers respond to new goods and services. The purpose of this essay is to map out a broad alternative to the neoclassical theory of consumer behavior.Household Consumption Behaviour; Evolutionary Economics