On Freeman

Testimonies from people who knew Freeman and are familiar with his work 

Luc Soete
A general introduction to Freeman

Christopher Freeman (1921-2010) was an influential British economist, innovation scholar, and founder of the sub-disciplines ‘Economics of Innovation’ and ‘Science Policy Research’. Recently, with the increased recognition of the importance of explaining the nature of innovation and technological change and the underlying factors of business and societal dynamics, the ground-breaking work of Professor Freeman, crossing traditional disciplinary boundaries has become increasingly recognized. Christopher Freeman inaugurated modern Innovation Studies and is still today one of the most influential economists in that genre after Joseph Schumpeter. He founded the Science Policy Research Unit (SPRU) at Sussex University, the first cross-disciplinary research institution in this field which led to the recognition world-wide of the importance of science policy and in particular innovation studies across the world.

He received numerous prizes, such as the Schumpeter prize and the Kondratiev medal but most of his work, interdisciplinary in nature and critical of traditional academic disciplinary approaches, remained ignored by the latter and more popular with policy makers and business leaders. Many believe that Christopher Freeman deserves a more prominent place in the long list of social scientists like G. Myrdal, K. Arrow, H. Simon, D. North who have made a major contribution to contemporary political economy.

From Marx to Bernal

The following text from Fagerberg et al. in Research Policy 2011 “Christopher Freeman: Social Science Entrepreneur” describes in my view probably best the influence of Marx and Bernal… I took out the last bit with reference to Posner and Hufbauer which I think were far less important than Fagerberg et al claim.

  
“As a young man Freeman had been exposed to Marx’s evolutionary perspective on capitalist development, and this came to have a lasting impression on his understanding of social, economic and institutional change. Marx had analysed capitalism as a dynamic system characterized by continuous interaction between capital accumulation, technological progress and social and institutional conditions, and Freeman was strongly influenced by this perspective, as many others had been before him. Yet although Marx characterized capitalism as a historically progressive system, he also held that its social and institutional conditions needed to be radically changed (or revolutionized) if society was to reap the full benefits of potential technological progress, a view that many in the crisis-ridden Western societies of the 1930s came to sympathize with. However, like many of his generation, Freeman eventually became disillusioned with the attempts to engineer such radical changes in the Soviet Union and elsewhere[1], and decided to focus on how one might get the most out of technological progress here and now through appropriately shaped policy and management.


Around the time of the 2nd World War Freeman studied at the London School of Economics (only interrupted by war service). He was, however, dissatisfied with the kind of economics that was taught there, which he saw as overly static in character (in contrast to Marx’ dynamic approach) and totally deficient when it came to analysing technological progress and its relationship with science, an aspect that Freeman considered to be of increasing importance economically and politically. On the latter, he was influenced by the natural scientist and writer, J. D. Bernal, a devoted Marxist, who at the time gave extracurricular courses which Freeman attended. Bernal was a strong believer in the potential of scientific research, not only in universities but also in industry, to promote the welfare of mankind (Bernal, 1939). He argued that radically increasing the amount of research might benefit society enormously provided this was matched by appropriate policies and management. To support his argument, Bernal also provided an empirical estimate of the (rather modest) amount of resources devoted to this in the UK at the time. Freeman found this line of inquiry particularly inspiring. In a later paper, he pointed out [2]: 


“Bernal went beyond Schumpeter and Marx in his perception of the extent to which the R&D function had become professionalised and internalised within both industry and government. (. . .) Bernal’s principal contribution to economics and the other social sciences was his clear perception that the allocation of resources to the various branches of organised R&D and related scientific services and their efficient management had become crucial for the development and performance of nations and enterprises”. (Freeman, 1992, p. 5)
Despite his admiration for Bernal, Freeman realized that any analysis of the contribution from science and technology to economic progress would be deficient without a thorough understanding of what drives technological activities in firms, something that he felt was missing both in Bernal’s work and in the kind of economics he was taught while attending university. There was, however, another perspective that he found more helpful in this regard. In Capital, Marx had put forward the theory that the driving force behind capitalist development was technological competition between firms and, as is well known, Schumpeter later made this the cornerstone of his theory. [...]


Freeman’s vision became ultimately based on Marx’s and Schumpeter’s dynamic evolutionary outlook, with capitalist firms at the centre. However, he strongly felt that their analyses, largely for reasons to do with changes in the economy (and society) since their times, had failed to properly take into account the role of R&D at the level of the firm and in society more generally, as well as their interactions (Freeman, 1968b, 1974, 1992).”

From Keynes to Schumpeter
It was this focus on the firm and the entrepreneurial dynamics associated with innovation and its diffusion which also led to his critique of neo-Keynesian analysis during the oil crisis and the lack of recognition of the role of technical innovation. In this sense he was a Keynesian Schumpeterian. To quote Freeman:


“Some neo-Keynesian analysis appears to abstract completely from consideration of technical innovation; growth is simply accompanied by the emergence of new industries and technologies. For Schumpeter the system is driven by such technical innovations and their diffusion. In the one case, the emphasis is entirely on manipulation of the level of aggregate demand and it is a matter of more or less complete indifference as to which are the new technologies and how they diffuse through the system. In the other case, the emphasis is on innovative entrepreneurship and it matters very much which are the conditions which may hinder or promote particular types of technical change.”
Doing so Freeman was at pains to emphasize how Keynes himself had acknowledged the importance of innovation as opposed to short term fiscal and monetary policies. He often quoted the following extract from Keynes’ Treatise on Money: “Entrepreneurs are induced to embark on the production of fixed capital or deterred from doing so by their expectations of the profit to be made. Apart from the many minor reasons why these should fluctuate in a changing world, Professor Schumpeter’s explanation of the major movements may be unreservedly accepted.” (Keynes, 1930, p. 86).
 

These “major movements” in which technical innovations plaid a major role, led Freeman in the late 70’s to follow Schumpeter in his recognition of the existence of aggregate wave-like transformations in the economy resulting directly from what he referred to as:  
“constellations of innovations… what we shall call ‘new technology systems’ rather than haphazard bunches of discrete ‘basic innovations’. From this standpoint, which we believe was essentially that of Schumpeter, the ‘clusters’ of innovations are associated with a technological web, with the growth of new industries and services involving distinct new groupings of firms with their own ‘subculture’ and distinct technology, and with new patterns of consumer behaviour”.
Doing so, Freeman established the link between detailed knowledge on the micro-study of the nature and origin of technical innovations and their diffusion and Schumpeterian process of creative destruction, structural dynamics and evolutionary dynamics.

 

From Schumpeter to Perez
Luc says: I would use here paragraphs from my own old paper in Chris Freeman’s Festschrift of 1986:
“The emergence of Freeman’s previous concept of ‘new technological systems’ might well be considered as similar to the concept of change in technological paradigm, already used extensively in his Schumpeterian writings. Freeman broadened his still relatively narrow, technology-orientated concept of ‘new technology systems’ to the far broader concept suggested by Perez in one of the most influential articles in the area of long waves, of change in technological regime or change in techno-economic or socio-economic paradigm. The view that the structural crisis brought about by the depression is, in Perez’s words, “the visible syndrome of a breakdown in the complementarity between the dynamics of the economic subsystem and the related dynamics of the socio-institutional framework’ and amounts not only to a process of “creative destruction” or “abnormal liquidation” in the economic sphere, but also in the socio-institutional appeals particularly to Freeman. Indeed, Freeman, despite his strong Schumpeterian allegiances, fully acknowledges the point made by Perez that Schumpeter did only have a narrow economic (if any) interpretation of the occurrence of depressions. As he puts it: “Despite [Schumpeter’s] acceptance of the importance of organizational and managerial innovations and the breadth of his approach to the development of social sciences , his theory of depression is narrowly economic” and further reiterating the point made by Perez, he adds: “But it is the ‘mismatch’ between the institutional framework with its high degree of inertia, and the outstanding revealed cost and productivity advantages of the new technological paradigm which provides to search for social and political solutions of the crisis.”

 

Notes

1. Freeman had joined the British Communist Party but broke with it after the invasion of Hungary in 1956. In a talk delivered at a conference organized in connection with his 80th birthday in September 2001, he strongly regretted that he had not fully realized the repressive nature of Stalinism at an earlier stage.

2. as also illustrated in his 1997 lecture on “Bernal and the Social Function of Science” (audio available on The Vega Science Trust (http://vega.org.uk)

Howard Rush
On SPRU and Chris.

In 196? Freeman was approached by the then Vice-Chancellor of the newly formed Sussex University, asking him to set up a research unit for Science Policy…  Geoff Oldham as Deputy Director, Jackie Fuller as Administrator and Chris Freeman as Director. That was the original cell that initiated SPRU  Etc.  By the early 1980s, SPRU had long moved to three floors in the Mantell Building, had XX researchers and had gained a worldwide reputation as the pioneer in innovation research. etc.

Ground was broken for the Freeman Centre –  a new state of the art research building to house two of Britain’s leading centres of excellence in science and technology policy and innovation management.  

The two centres, SPRU (Science and Technology Policy Research) at the University of Sussex and CENTRIM (Centre for Research in Innovation Management) at the University of Brighton already had a long history of collaboration. Howard Rush, Ben Martin, Mike Hobday and David Gann seized an opportunity to respond to a special ESRC Call for Proposals for joint infrastructure funding, successfully arguing the case for bringing together theory, policy, and practice, under the same roof. 

 

Once funding was secured, they worked closely with the architects and contractors to design a building aimed at creating an environment that would enhance the possibilities to work collaboratively, interactively, and creatively in what was to become the largest cluster of innovation researchers in the world.  The leaders of the two universities agreed that the new centre would be located on the University of Sussex campus, in an area known as ‘the wild meadow’. 
 

There was unanimous agreement that it should bear Chris’s name, but getting the ever-modest Chris to agree to having a building named after him was always going to be tough work. That he had inspired and supported the work of probably every researcher in the two groups and that he was one of the leading figures in the field was clearly not going to cut it with Chris. So Howard Rush and Mike Hobday took him to one of his favourite pubs in Lewes, where over a couple of pints, they argued how beneficial it would be for the funding proposal: only 2% of bids to the call were likely to be successful and therefore it would be an enormous help to have Chris directly associated with it.  Chris counter-argued that buildings should only be named after dead people.  They told him that this could be arranged – at which point he reluctantly agreed.
For the decade between 2003 and 2013, SPRU and CENTRIM thrived in the Freeman Centre, which also attracted hundreds of collaborators and users of their research from academia, industry, and government.


However, in 2013, Michael Farthing, the then Vice Chancellor of Sussex University, decided to address a financial crisis at his university by creating a School of Business, Management and Economics, and incorporating SPRU into that new school.  To everyone’s dismay, his decision involved not only removing SPRU from the Freeman Centre to another location on the other side of campus, but also the Freeman name from the building.  This decision was met by a strong international campaign involving over 650 current and past colleagues, students, and associates of SPRU. Within two weeks the University partially reversed its decision and Chris’s name remains in place on the building, but sadly it no longer contains SPRU and CENTRIM researchers.

Francisco Louçã
On Chris' evolutionary economics.

Through his lifelong work, Freeman synthesized three theoretical approaches: the Cambridge tradition considering economies as organic totalities; the classical vision of the economy as the expression of social relations; and foremost the Schumpeterian view on capitalism as an adaptive and innovative system moved by profit accumulation. The synthesis was provided by evolutionary economics, dealing with dynamic social forces in complex institutional systems, emphasizing the role of endogenous change generated in techno-economic paradigms that organize the system of production.
For Freeman, evolutionary economics should look at non-equilibrium processes in which bounded rationality prevails, as heterogeneous agents learn and adapt both within and outside markets. Endogenous preferences and innovations, knowledge-based and capability-based firms in national systems of innovation, and coordination, impart a structure far different from the optimization and rational expectations framework pushed by mainstream economics since the 1970s. 

This evolutionary economics is concerned with the drivers, patterns of change and mechanisms of coordination, and uses stylized facts from empirical observation, exploring regularities and structures, or factually based conjectures. In this sense, Freeman established himself as a neo-Schumpeterian of a kind: “the description 'neo-Schumpeterian' is used here in a very broad sense to indicate the scope of the subject matter, rather than an ideological standpoint” (Freeman, C. (1994), “The Economics of Technical Change”, Cambridge Journal of Economics, 18(5): 463-514, p.464)