Nelson and Winter

An Evolutionary Theory of

Economic Change

Richard R. Nelson and Sidney G. Winter

1. Skills as Programs

A variety of terms have been used in the literature of social science to denote a smooth sequence of behavior that functions, in some sense, as an effective unit. 'Skill' is obviously one such; there is, in particular, a substantial psychological literature relating to skills and skill learning. The terms 'plan,' 'script,' 'habit,' 'routine,' and 'program' have also been used to name either the same concept or a very closely related one. But there are obvious differences in connotation among these terms, and exploration of these various connotations can be informative. To think of skills as programs is to evoke the image of a computer program. Clearly, the development of the modern electronic computer and its associated sofrware has had an important and widely diffused influence on theoretical thinking about the phenomena that concern us here.' Computer programs that simulate complex, patterned behaviors have been developed over a wide range of human and organizational activity. These efforts have shown, above all, that the logical processes of a digital computer can mimic very 'skillful' and 'intelligent' behaviors, at least in the sense of providing a sufficient account of numerous observable aspects of such behavior. Here, however, we will not review specific examples of this sort of research, but will consider only the broad parallels between skills and (computer) programs. The following features of computer programs are analogous to, and instructive regarding, corresponding features of human skills. First, a program functions as a unit, and its execution is ordinarily a highly complex performance relative to the actions required to initiate the performance. Second, although

An Evolutionary Theory of Economic Change

loops and 'go to' statements and conditional branching statements complicate the picture, the basic organization scheme of a program...