It reflects a modern concern to establish a more systematic understanding of the process of creative destruction

The Strong Retardation Thesis
25We can return now to the question of the link between output retardation and retardation of technical progress. It will help to begin by holding constant the exogenous rate of technical progress, h ₁. It then follows immediately from the form of the technical progress function that the rate of retardation (acceleration) of technical progress is exactly proportional to the rate of retardation (acceleration) in the rate of growth of output, with the proportionality factor being equal to the progress elasticity, ?. The two rates of growth are simultaneously determined, and retardation (acceleration) in one implies retardation (acceleration) in the other. Thus, as Schmookler, observed, the causation between technical progress and output growth runs both ways but not for the reasons that he invoked. The causation pattern is not a feature of a mature industry but of a dynamic industry finding its niche in the economy.
26More subtly, consider the effect of different values of the exogenous progress parameter, h ₁, on the normal growth path of the industry. Of the parameters of the growth process only the niche growth rate, G, is affected and this is greater in value the greater is h ₁. It follows from (11) that the output growth rate will be lower on a normal path, in which G is lower. Thus a lower value of h ₁ is associated with an output growth rate that is lower at each point in its normal path. Conversely, a faster rate of exogenous progress is associated with a faster output growth rate, precisely because a faster rate of exogenous technical progress extends the market more rapidly. Consequently, from (12), at any given growth rate, the rate of change of the growth rate is smaller, the lower is G. If there is output retardation, it will be smaller on the path with the lower rate of exogenous technical progress. This is as close as we can get to the strong form of the Kuznets/Burns thesis. Comparing two normal paths, if technical progress is lower on one, then the rate of growth of output and the rate of retardation of output are lower on that path relative to the second one.
27Under what circumstances is correct to link retardation of technical progress directly to retardation of output growth? Reflecting on the argument shows that the strong thesis relates to a special case, namely when the industry has settled into its niche and is growing at the constant rate, G. For then it is readily seen that this growth rate declines as the exogenous rate of technical progress is reduced. Thus if T _n is the rate of technical progress when the industry has settled into its niche it follows that
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and, if h ₁ is falling over time then so is T _n , all other elements being equal. We can conclude that the strong version of the Kuznets/Burns hypothesis holds for a “mature” industry but that it is not at all transparent for a “young” industry.
Thus, the relation between technical progress, the growth of the market and the rate of retardation is more complicated than either Kuznets or Burns foresaw, and this is so because their pioneering analysis is of a “far from equilibrium” kind. Their industries are new industries finding their place in the economic world, not established industries that have passed on to maturity. Because they are new industries, their present growth continually redefines the technological base for their future growth. They are not industries that could be described as being in equilibrium although, of course, the activities of production and consumption are coordinated by market processes. Co-ordination leads to order, not to equilibrium. Paradoxically, perhaps, the link claimed between output retardation and technical progress is only valid when the industries are “old industries” that have been absorbed into their respective niches. Yet their principal insights remain valid. The process of innovation and subsequent economic adjustment requires a non-aggregative explanation of growth in which impulses to economic change lead to the joint occurrence of learning phenomena, investment and technical progress such that each of these can be labelled endogenous.