In the broad sense, “evolutionary” loosely denotes a concern with tansformation, innovation, and development, and an approach inspired by Darwin’s theory of biological evolution.  Modern evolutionary economics has come a long way from its beginnings in the writings of a few economists in the 1970s and 1980s. Although there is still not a consensus in the principles of evolutionary economics, it is clear that evolutionary economists focus on ideas like complexity, economic dynamics and bounded rationality. Instead of assuming that people behave rationally, evolutionary economics pinpoints complex psychological factors as key drivers of the economy.

 

There are two main currents in evolutionary economics nowadays. One begins by questioning the assumption of homo economicus, a rational agent that choses those actions that yield the best balance of rewards versus costs. Real human beings behave in a very different way. Of course, it’s not enough to say that we fail to measure up to the lofty standards assumed by the rational choice theory. Evolutionary economists goes further by understanding in what ways our behavior deviates from ‘perfect rationality’ and why we evolved to behave in these ways. In the last couple of decades the fields of evolutionary psychology and behavioral economics have been making great strides in answering such questions.The second current in evolutionary economics is ‘Universal Darwinism’. The main idea behind this is that we can generalize Darwin’ theory to explain not only biological evolution, but also other fields. Darwin’s basic insight has a lot of value when, for instance, considering the dynamics of economic agents competing in the market. In biological organisms evolutionary ‘fitness’ is maximized when they increase their chances of survival and reproduction. Similarly, Firms also have fitness, which is maximized when they increase their revenues and cut costs.

 

One major problem faced by the current research in evolutionary economics is probably that, because it has inspired research in many different areas in business studies and social science, these have become specialized and fragmented. Hence, forming a sufficiently developed core-theory may help to promote greater conversation in the field. Nevertheless, being an emerging wave of thinking, evolutionary economics has provided important insights. Firstly, it highlights that failure is as important as success - failure paves the way to economic prosperity by encouraging further developments and higher efficiency. Moreover, it teaches us that it takes time for a market, or a society, to adjust, evolve and develop, so being patient is as important as actively trying to improve the current economic system.

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References:

https://link.springer.com/chapter/10.1007/978-0-585-35155-1_2

https://www.britannica.com/topic/evolutionary-economics

https://www.investopedia.com/terms/e/evolutionary-economics.asp#:~:text=Evolutionary%20economics%20is%20a%20theory,an%20American%20economist%20and%20sociologist.

https://www.economicshelp.org/blog/143308/economics/evolutionary-economics/

https://www.jasoncollins.blog/evolutionary-economics/