Social Division of Labour in Distribution and the Growth of the Industry

The impacts of the distribution structure on the growth of an industry are considered through the analysis of the development process of the Japanese and German consumer electronics industries which are supposed to be a typical example of the industry with increasing returns. Most of the theoretical challenges were focused on the technological innovation as an intemal factor. For the development of the growth theory, however, we also have to focus on another externality; the market. A market process casts the way an industry grows, as it determines the way the demand expands, the technology changes, and the capital accumulates. The key concept argued is the "social division of labour," which evolves in the process the distribution system develops, and this is the way the market process, the absolute externality in the traditional economic theory, is transformed so that it brings profits to the industry.