Representing the system as an operationally closed, non-trivial machine explains the observed dependence of performance on cumulative output and suggests theoretical values for learning rates. The policy representation focuses on the informational domain and shows how competitive markets drive virtuous cycles leading to increased performance through ‘learning-by-searching’ (industry R&D) and ‘learning-by-doing’. The policy representation identifies the push-pull role of government R&D and deployment programmes to initiate and maintain these virtuous cycles.
Page 36 Wene (2008) In Foxon, T, Kohler, J. and Oughton, C. (2008) Innovation For A Low Carbon Economy Economic, Institutional and Management Approaches Cheltenham: Edward Elgar
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