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Abstract
This paper outlines an evolutionary theory of adaptive growth based on the twin principles of enterprise and the co-ordinating role of markets. The central organising idea is that economies never grow without simultaneous development. Growth as conventionally understood is a product of structural change and economic self-transformation, and these processes are closely connected with but not reducible to the growth of knowledge. The dominant theme is enterprise, the variations it generates, and the multiple connections between investment, innovation, demand and structural transformation. We explore the dependence of macroeconomic productivity growth on the diversity of technical progress functions and income elasticities of demand at the industry level, and the resolution of this diversity into patterns of economic change through market processes. We show how industry growth rates are emergent phenomena, constrained by higher order processes of emergence that convert an ensemble of industry growth rates into an aggregate rate of growth. The growth of productivity, output and employment are determined mutually and endogenously, and their values depend on the variation in the primary causal influences in the system.