In nominating Richard Nelson, I feel both honored and nervous. He has secured so many glittering accolades and well-deserved tributes that it is difficult to say anything that has not already been said. I will therefore provide a personal perspective; and, what stands out most for me, is the versatility \u2013 the range of Nelson\u2019s contributions.<\/p>\r\n\r\n\r\n\r\n
1. The decades<\/em> over which Nelson has been active provides an obvious, temporal marker of his exceptional range. \u2018A Theory of the Low Level Equilibrium Trap in Developing Countries,\u2019 considered his first \u201clandmark\u201d publication, was published in the American Economic Review <\/em>in 1956. This was a year before Nelson had started his first faculty job at Oberlin College. Three years later, in 1959 another landmark — The Simple Economics of Basic Scientific Research — A Theoretical Analysis, was published in Journal of Political Economy.<\/em> This paper formalized the externality problem of R&D: Nelson\u2019s model predicted that profit-seeking firms would underinvest in basic science because they would not be able to fully capture the returns from such investment.<\/p>\r\n\r\n\r\n\r\n \u00a0The output never ceased. In every succeeding decade, Nelson published as much significant work as most scholars would hope to produce in their entire careers. More than sixty years later, Nelson now aged 91, is still producing scholarly work. The October 2020 issue of Industrial and Corporate Change <\/em>has a sole-authored article by Nelson. \u00a0<\/p>\r\n\r\n\r\n\r\n 2. Another striking feature of the Nelson range, is the variety of the methodologies<\/em> he used and promoted. His first \u201cround\u201d of landmark papers elegantly and creatively applied classic theoretical methodologies and equilibrium models. These include, besides the two papers above, Investments in Humans, Technological Diffusion, and Economic Growth, with Edmund S. Phelps, published in the American Economic Review<\/em> in 1966. The Nobel committee described the significance of this paper (when it awarded the 2006 Prize to Phelps) thus:<\/p>\r\n\r\n\r\n\r\n \u201cThe Nelson-Phelps analysis focuses on the stock \u2013 as opposed to the accumulation \u2013 of human capital as a key factor behind technology growth in the sense that an educated and knowledgeable workforce is better able to adopt available new technology. In the empirical growth literature, the Nelson-Phelps setting has provided a means of formalizing technological catch-up across countries, whereby technologically less advanced countries adopt the technologies of the more advanced ones, and do so more efficiently, the more educated the workforce in the adopting country. The analysis thus explains why data indicate that output growth is more related to the stock of human capital than to its rate of growth. The model also helps explain why skill premia \u2013 the higher wage rates enjoyed by skilled, or educated, workers \u2013 tend to be higher in times of rapid technological change: an educated workforce is able to assimilate technological advances more rapidly. Such reasoning has been used to interpret the recent increase in returns to education that has taken place in many countries, in particular the US. To the extent that there are important spillovers (\u201cexternalities\u201d) in the adoption of technologies, the returns to education might not be fully reflected in the skill premium. Thus, Nelson and Phelps argued, their model suggests a possible reason for subsidizing education.\u201d<\/p>\r\n\r\n\r\n\r\n With his reputation as a leading \u201cequilibrium\u201d theorist established in the 1960s, Nelson turned to the \u201cCarnegie school\u2019s\u201d heterodox use of \u201croutines\u201d as a foundation of organizational decision-making. This new direction resulted in the now classic book, written with Sidney Winter, entitled An Evolutionary Theory of Economic Change<\/em>. The theory in this book provided an \u201cevolutionary\u201d account (rather than an \u201cequilibrium\u201d model) of how firms and industries acquire their capabilities. The account is evolutionary in that it emphasizes the trial-and-error process of development and in the role of markets in selecting out the firms that do not develop the capabilities needed to survive.<\/p>\r\n\r\n\r\n\r\n The book which was published in 1982 had received approximately 23,000 Google scholar citations by May 2012. Now, nine years later, it has an astounding 47,729 citations. The book and Nelson\u2019s other publications have also made evolutionary economics a serious alternative to the standard model, which is nearly miraculous in my view.<\/p>\r\n\r\n\r\n\r\n Case histories and studies of specific industries are a third and unusual feature of Nelson\u2019s methodological range. He started these when he was still developing mainstream equilibrium models: In 1962 for example he published the results of his investigations on the development of transistors and other such technologies, and in 1977 Nelson and Winter showed how innovation and its institutional and organizational enablers differed across agriculture, medical, and aircraft sectors. In recent years, Nelson and his collaborators have produced a series of case histories on notable medical innovations.<\/p>\r\n\r\n\r\n\r\n The combination of producing case-histories as well path-breaking theory is highly unusual for a leading economist. Economic historians, such as Mokyr and Rosenberg apart, most economists avoid case-histories; and those who do work on case histories rarely produce path-breaking theory (be it orthodox or heterodox). And although Nelson\u2019s case histories have not received the same acclaim and citations as his theoretical work, I have personally found them an invaluable resource in writing my own case histories of medical innovation. That a top theorist also produces case histories is an inspiring example, which I hope will be more widely followed in the years to come.<\/p>\r\n\r\n\r\n\r\n