The central theme of this book is competition treated as an evolutionary process in which the focus is upon economic change and not economic equilibrium. This theme is explored by linking together differences in economic behaviour with the role of markets as co-ordinating institutions. In this picture, innovation plays a central role as a primary source of differential behaviour of firms and the purpose of the book is to identify the consequences of these differences for competition and competitive advantage. In the past decade there have been many important contributions to an emerging evolutionary economics. In many cases these have proceeded via stimulation of simple economic models with differential behaviour. This volume integrates many of the relevant themes into formal analytical treatment based around what is called Fisher's Principle. Fisher's Principle is a development of a central theme in evolutionary theory, namely that variety drives change. The prestigious Graz Schumpeter Lectures are presented annually at the University of Graz, Austria, by a scholar with an international reputation whose work relates to Joseph Schumpeter's economic and social analyses. This volume, the first in a Routledge series, is based on the theories put forward by J. Stanley Metcalfe in his 1995 presentation.