In the incomplete contracting view, one finds boundedly rational managers who face opportunism. Therefore, firms arise from efforts to secure the rents that flow from transaction-specific assets. Langlois and Robertson develop the competence perspective in their evolutionary theory of firm capabilities. Paralleling the efforts in evolutionary economics, strategic management theorists are developing both a competence view of the firm and a theory of competence-based competition. This chapter addresses to what extent is R-A theory’s resourcebased view of the firm consistent or inconsistent with the evolutionary, competence perspective. It argues that R-A theory fully accommodates the competence perspective by viewing competences as higher-order resources that are comprised of distinct packages or bundles of basic resources. Being evolutionary, R-A theory views innovation and organisational learning as endogenous, firms and consumers as having imperfect information, and institutions and public policy as affecting economic performance.