We study a dynamic general equilibrium model where innovation takes the form of the
introduction of new goods whose production requires skilled workers. Innovation is followed
by a costly process of standardization, whereby these new goods are adapted to be
produced using unskilled labor. Our framework highlights a number of novel results. First,
standardization is both an engine of growth and a potential barrier to it. As a result, growth is
an inverse U-shaped function of the standardization rate (and of competition). Second, we …