This page intentionally left blank Innovation has become a major field of study in economics, management, sociology, science and technology, and history Case studies, empirical models, appreciative analyses and formal theories abound However, after several decades of study on innovation, and so many different types of contribution, there are still many phenomena we know very little about The debate on innovation still has much to deliver; important questions remain unanswered and many problems require solution Bringing together many leading figures in the field, this collection aims to address these concerns by offering detailed analyses of topics that are crucial for understanding innovation In addition, it offers discussions of topics that researchers are just beginning to explore and of topics that continue to defy our efforts to understand and systematize This important and wide-ranging collection will be essential reading for academic researchers and graduate students who wish to gain a broad overview of frontier-research in innovation Franco Malerba is Professor of Industrial Economics and Director of CESPRI at Bocconi University, Milan Stefano Brusoni is Associate Professor of Applied Economics and Deputy Director of CESPRI at Bocconi University, Milan Perspectives on innovation Editors Franco Malerba and Stefano Brusoni CAMBRIDGE UNIVERSITY PRESS Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo Cambridge University Press The Edinburgh Building, Cambridge CB2 8RU, UK Published in the United States of America by Cambridge University Press, New York www.cambridge.org Information on this title: www.cambridge.org/9780521866644 © Cambridge University Press 2007 This publication is in copyright Subject to statutory exception and to the provision of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press First published in print format 2006 eBook (EBL) ISBN-13 978-0-511-29456-3 ISBN-10 0-511-29456-5 eBook (EBL) hardback ISBN-13 978-0-521-86664-4 hardback ISBN-10 0-521-86664-2 paperback ISBN-13 978-0-521-68561-0 paperback ISBN-10 0-521-68561-3 Cambridge University Press has no responsibility for the persistence or accuracy of urls for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate Contents List of figures page viii List of tables x List of contributors xi Prefatory note xv Introduction FRANCO MALERBA AND STEFANO BRUSONI Part 1: Innovation and economic growth Understanding economic growth as the central task of economic analysis RICHARD R NELSON 25 27 Innovation and economic growth theory: a Schumpeterian legacy and agenda BART VERSPAGEN Comments to Chapters and 42 64 JAN FAGERBERG Part 2: The microdynamics of the innovation process Schumpeter’s prophecy and individual incentives as a driver of innovation WESLEY M COHEN AND HENRY SAUERMANN 71 73 Creative destruction in the PC industry TIMOTHY BRESNAHAN 105 Comments to Chapters and ASHISH ARORA 141 v vi Contents Part 3: Innovation and industrial dynamics 151 Statistical regularities in the evolution of industries: a guide through some evidence and challenges for the theory GIOVANNI DOSI 153 Spin-off entry in high-tech industries: motives and consequences STEVEN KLEPPER AND PETER THOMPSON 187 Comments to Chapters and LUIGI ORSENIGO 219 Part 4: Innovation and institutions 225 Schumpeterian innovation in institutions MASAHIKO AOKI Innovation and Europe’s academic institutions – second thoughts about embracing the Bayh–Dole regime PAUL A DAVID 227 251 Comments to Chapters and ˚ KE LUNDVALL BENGT-A 279 Part 5: Innovation, firms’ organization, and business strategies 291 Bringing selection back into our evolutionary theories of innovation DANIEL A LEVINTHAL 293 10 From leadership to management: mobilizing knowledge for innovation in strategic alliances YVES L DOZ, ANDREA CUOMO, AND JULIE WRAZEL 308 Comments to Chapters and 10 SIDNEY G WINTER 322 Part 6: Innovation and entrepreneurship 331 11 Schumpeterian legacies for entrepreneurship and networks: the social dimensions of entrepreneurial action PIERA MORLACCHI 333 Contents vii 12 Knowledge-based entrepreneurship: the organizational side of technology commercialization ULRICH WITT AND CHRISTIAN ZELLNER 352 Comments to Chapters 11 and 12 MAUREEN MCKELVEY 372 Part 7: Innovation and evolution of the university system 379 13 Academic entrepreneurs and technology transfer: who participates and why? JANET BERCOVITZ AND MARYANN FELDMAN 381 14 Modelling and measuring scientific production: a first estimation for a panel of OECD countries GUSTAVO CRESPI AND ALDO GEUNA 399 Comments to Chapters 13 and 14 W EDWARD STEINMUELLER 430 Part 8: Innovations and public policy 439 15 Innovation systems, innovation policy and restless capitalism STAN METCALFE 16 Intellectual property rights and competition policy PAUL A GEROSKI 441 455 17 The policy-shaper’s anxiety at the innovation kick: how far innovation theories really help in the world of policy? PARASKEVAS CARACOSTAS 464 Index 490 List of figures 3.1 3.2 4.1 4.2 4.3 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 viii Importance of job characteristics for S&E doctorate recipients Rankings of importance of job characteristics; engineering and science professionals versus workers (n ¼ 477) Leading products and firms in widely used PC markets Positive feedback Triggers of creative destruction Empirical densities of log (VAi) in different years Cumulative distribution of US firms by receipts Densities of log (Si), log (Li), and log (Vai) in different Italian manufacturing sectors Growth-rate distributions in different years Size measured in terms of Value added Italian aggregate manufacturing Probability densities and maximum likelihood estimation of firm growth rates g in three different Italian sectors Distribution of (normalised) gross margins by sectors Distribution of gross margins growth rates by sectors, Italian data Each figure displays the maximum likelihood estimates of Subbotin distributions Distribution of labour productivity by sectors Gross margins and (normalized) labour productivity, 1989–1997 Labour productivity and growth rates (measured in terms of sales), 1989–1997 Growth rates and profit margins in different manufacturing sectors 82 83 108 115 117 156 157 158 159 165 168 171 175 178 179 180 484 Paraskevas Caracostas ‘structural’ programmes which focus financial and human effort on objectives relating to the functioning of the research system (e.g interdisciplinarity or international mobility of researchers, development of university–industry partnerships) ‘Sectoral’ structuring (where measures are tailored to the needs of a specific sector of industry or the economy) is less and less fashionable in government circles in the industrialized countries because governments are afraid of being captured by short-term policy agendas in a field that, by its nature, ought to be geared to the medium and long term But to be accurate, sectoral considerations are not always lacking in the first three types of programme described above The shaping of social demand in the research process requires indeed not only participation in the research effort by the end-users or intermediate users of the results, but also the development of specialist socio-economic research to accompany the development of scientific knowledge and technical artefacts/simulations A topic such as ‘clean, safe and low-energy transport’ cannot be managed without specialist work on the costs, ergonomic aspects or rhythms of work involved in transport flows Even a ‘hard’ subject such as the development of parallel computer architectures should incorporate the investigation of psycho-sociological constraints on use or the long-term skills required It would appear obvious at first sight that the third option (‘problemoriented’ programmes) is the one best able to combine the different approaches provided by the supply of research (disciplines, combination of social and natural sciences, technologies) with the demands of society (various users involved) A hybrid between the hard sciences and social sciences in particular may indeed be achieved more easily by tailoring and combining research efforts for addressing the challenge of a specific socio-economic problem However, the necessary scientific and technological creativity, underpinned by the first two options, can also marry itself with the expectations or needs of various groups in society if they wish to benefit In other words, the way in which research activity is structured does not in itself ensure ‘decompartmentalization’ or, indeed, the opposite Despite their analytical power – based on an increasing number of case studies – the ‘social shaping of technology’ approaches and the ‘science studies’ more generally need from the policy-shaper’s point of view further refinement and codification in order to be able to provide concrete advice on the problems to be tackled and the way policy instruments such as research programmes should be designed By capitalizing on the rich accumulated experience of various participative processes (such as The policy shaper’s anxiety at the innovation kick 485 foresight or technology assessment) that are implemented in European countries, they could develop both a theoretical understanding of the way different sets of heterogeneous actors shape the evolution of policy priorities and instruments and specific experimental tools for and in close relation with policy-shapers and programme managers 17.5 Conclusions The chapter has shown that different theoretical frameworks may be exploited by policy-shapers in different situations Research on the social shaping of technology has been instrumental in designing and experimenting new ways of organizing research programmes Endogenous growth economics have strengthened the arguments in favour of increasing investments in intellectual and human capital Systems of innovation approaches have inspired and accompanied the diversification of research and innovation policies and the development of instruments aiming at linking different actors and organizations Far from questioning the importance of efforts of those like Edquist (2004) who plead in favour of improving the conceptual clarity of the systems of innovation approach, I limited myself to highlight some of the problems which policy-shapers have to come to grips with The implications of such empirical observations are two-fold: The professional status of policy-shapers in fields such as research and innovation policies is in need of greater codification; in a society which the political elites view as a ‘knowledge-based society’, the profession of policy-shaper must be continuously enriched through novel education and lifelong learning programmes connected to the latest developments in innovation theories; policy-shapers in this field may be socially recognized as intermediaries or ‘translators’ of a specific kind Conversely, social scientists doing research on knowledge, research and innovation may learn from a closer interaction with the prime users of their results; while many business schools and some economics or STS (Science and Technology Studies) departments in universities have trained many young professionals in technologymanagement courses and initiated stable linkages with managers in business, the exchanges with practitioners in the system of public action is more recent and deserves more attention More research and more experimentation is required at the interface between innovation research and related sciences on one hand and policy development on the other New institutions and new organizational innovation are 486 Paraskevas Caracostas needed as well in order to renovate both policy research and research policy in the knowledge society but without falling in the illusion of policy-related research perfectly adapted to policy As Bartzokas (2002) has underlined, the idea of relevance and/or usefulness of policy research is, among others, related to the issue of what is considered to be ‘knowledge’, but also to the issue of where that knowledge is coming from, its validity and reliability Scientists and policy makers often diverge on what is useful policy knowledge, as well as on how that knowledge is to be developed or obtained Within the knowledge-utilization literature ‘the enlightenment model’ (Weiss, 1991) has gained considerable agreement Weiss’s enlightenment model illustrates the idea that knowledge gained through research can enlighten or broaden the existing knowledge base of policymakers This, over time, can create a gradual shift of conceptual thinking and, therefore of the policies this conceptual thinking supports It is also perhaps one of the most realistic uses of research since it rests on the idea of the accumulation of knowledge through the aggregation of findings that promotes a gradual shift in concepts and paradigms In relation to such shifts, Weiss sees the role of research as clarifying, accelerating and legitimizing changes in opinion and that this may be the most important contribution social research can make to the policy process (Weiss, 1977, p 535) Data from recent studies suggest that the major use of social research is not the application of specific data to specific decisions Rather, policy-shapers and government decisionmakers tend to use research indirectly, as a source of ideas, information, and orientations to the world This is why multi-diciplinary research on research and innovation policies in their socio-economic context is so important This is why as in other fields such research may benefit from a closer interaction with practitioners References Badie, B 1995 La fin des territoires, Essai sur le de´sordre international et sur l’utilite´ sociale du respec Paris: Fayard Bartzokas, A 2002 ‘Innovation Policy Instruments: A review of EU Trends and Relevant literature’, Final Report of the STRATA consolidating workshop, Session 4, Brussels, 22–23 April (available at www.cordis.lu/improving/ strata/workshop.htm) Borras, S 2004 ‘Systems of Innovation Theory and The European Union’, Science and Public Policy 31 (6): 425–433 Boyer, R 1995a ‘Vers une the´orie originale des institutions e´conomiques?’ in Boyer and Saillard (eds.)1995 The´orie de la re´gulation, ‘’e´tat des savoirs Paris: La De´couverte The policy shaper’s anxiety at the innovation kick 487 Boyer, R 1995b ‘La the´orie de la re´gulation dans les anne´es 1990’ in N Spe´cial Revue Actuel Marx, The´orie de la re´gulation, the´orie des conventions, N 17, 1e semestre 1995 Boyer, R and Saillard, Y (eds.) 1995 The´orie de la re´gulation, l’e´tat des savoirs Paris: La De´couverte Callon, M 1994 ‘Is Science a Public good? Fifth Mullins Lecture, Virginia Polytechnic Institute’, Science Technology and Human Values, 19: 395–424 Caracostas, P 1987 Two tier Europe as European Technology Community? Paper presented at the ‘European Conference on industrial integration strategies: Pandora’s box?’, 9–11 February 1987, Erasmus University Rotterdam, the Netherlands Caracostas, P and Muldur, U 1997 Society, the Endless Frontier Brussels and Luxembourg: European Communities Publication Office Caracostas, P and Soete, L 1997 ‘The Building of Cross-Border Institutions in Europe: Towards a European System of Innovation?’, in Edquist, C (ed.) 1997 Systems of Innovation; Technologies, Institutions and Organizations London: Pinter Cronberg, T and Sørensen, K.H 1995 ‘Similar Concerns, Different Styles? A note on European Approaches to The Social Shaping of Technology’, in COST Social sciences A4, Proceedings of the COST A4 in Ruvaslahti, Finland, January 13 and 14, 1994 Di Ruzza, 1995 ‘The´orie des syste`mes productifs et recomposition de l’e´conomie mondiale’ in N Spe´cial Revue Actuel Marx, The´orie de la re´gulation/the´orie des conventions, 1e tr 1995 Edquist, C (ed.) 1997 Systems of Innovation; Technologies, Institutions and organizations London: Pinter Edquist, C 2004 ‘Reflections on The Systems of Innovation Approach’, Science and Public Policy 31 (6): 485–489 European Commission 2004 Technology Platforms, from Definition to Implementation of a Common Research Agenda Fagerberg, J., Mowery, D.C and Nelson, R.R (eds.) 2005, The Oxford Handbook of Innovation, Oxford: Oxford University Press European Commission 2005 ‘Commission Staff Paper, Annex to The Proposal for the Council and European Parliament Decisions on the 7th Framework Programme (EC and Euratom), Main Report: Overall Summary, Impact Assessment and Ex Ante Evaluation’, COM(2005) 119 final Fougeyrollas, A., Le Moue¨l, P and Zagame´, P 2002 The NEMESIS model: New Econometric Model for Environment and Sustainable Development Implementation Strategies Brussels: ECOMOD Gaffard, J.L., Bruno, S., Longhi, C and Que´re´, M 1993 Cohe´rence et diversite´ des syste`mes d’innovation en Europe Rapport de synthe`se, FAST Dossier, Continental Europe: Science, Technology and Community cohesion, Vol 19, Brussels Guellec, D and Ralle, P 1995 Les nouvelles the´ories de la croissance, Paris: Repe`res, La De´couverte Gregersen, B., Johnson, B., and Kristensen, A 1994 ‘National Systems of Innovation and European Integration’, paper presented to the EUNETIC 488 Paraskevas Caracostas conference on ‘Evolutionary Economics of Technical Change: Assessment of Results and New Frontiers’, European Parliament, Strasbourg, October 6–8 Handke, P 1970 Die Angst des Tormanns beim Elfmeter (The Goalkeeper’s Anxiety at the Penalty Kick) High Level Expert Group for the European Commission 2002 Thinking, Debating and Shaping the Future: Foresight for Europe; available at ftp://ftp cordis.europa.eu/pub/foresight/docs/for_hleg_final_report_en.pdf H M Treasury, DTI and Department for Education and Skills 2004 Science and Innovation Investment Framework 2004–2014, Annex A, The Economic Case for Investment in Science and Research Kuhlman, S 2003 ‘Evaluation of research and innovation policies: a discussion of trends with examples from Germany’, International Journal of Technology Management 26(2/3/4) Kuttner, R 1996 Everything for Sale: The Virtues and Limits of Markets New York: Alfred A Knopf Le Gale`s, P 2004 Article ‘Gouvernance’ in Boussaguet, L., Jacquot, S and Ravinet, P (eds.) Dictionnaire des politiques publiques Paris: Presses de Sciences Po Lundvall, B.A 1992 National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning London: Pinter Lundvall, B.A and Borras, S 2005 ‘Science, Technology and Innovation Policy’, in Fagerberg, J., Mowery, D.C and Nelson, R (eds.) The Oxford Handbook of Innovation, Oxford University Press Malerba, F (ed.) 2004 Sectoral Systems of Innovation: Concept, Issues and Analyses of Six Major Sectors in Europe Cambridge: Cambridge University Press Malerba, F 2005 ‘Sectoral Systems, How and Why Innovation Differs across Sectors’, in Fagerberg, J., Mowery, D.C and Nelson, R (eds.) The Oxford Handbook of Innovation, Oxford University Press Muldur, U 1991, ‘R&D Funding at the crossroads of industrial, financial and political logic’, Fast Working Paper, European Commission Muller, P 1994 ‘La mutation des politiques publiques’, N Spe´cial de la revue Pouvoirs sur ‘Europe, de la Communaute´ a` l’Union’, Avril Nelson, R (ed.) 1993 National Systems of Innovation: A Comparative Study Oxford: Oxford University Press Niosi, J and Bellon, B 1994 ‘The Global Interdependence of National Innovation Systems: Evidence, Limits and Implications’, Technology in Society 16 (2): 173–97 OECD 1995 National Systems for Financing Innovation OECD, Paris OECD 2004 Science and Innovation Policy: Key Challenges and Opportunities OECD, Paris Romer, P 1986 ‘Increasing Returns and Long-Term Growth’, Journal of Political Economy 98: 71–102 Romer, P 1993 ‘Implementing a National Technology Strategy with SelfOrganising Industry Investment Boards’, Brookings Papers on Microeconomics 2: 345–99 Technopolis 2001 A Singular Council, Evaluation of the Research Council of Norway; available at http://www.technopolis.co.uk/downloads/243_ RCN_ synthesis.pdf The policy shaper’s anxiety at the innovation kick 489 Teubal, M 1995 ‘A Catalytic and Evolutionary Approach to Horizontal Technology Policies’, discussion paper, the Jerusalem Institute for Israel Studies, Jerusalem Teubal, M 1996 ‘R & D and Technology Policy in NICs as Learning Processes’, World Development 24 (3): 449–60 Teubal, M 1997 ‘A Catalytic and Evolutionary Approach to Horizontal Technology Policies (HTPs)’, Research Policy 25 (8): 1161–1188 Tsipouri, L and Xanthakis, M 1993 Impact of the EC Science and Technology Policy on the Greek S/T Policy University of Athens Weiss, Carol 1977 ‘Research for Policy’s Sake: The Enlightenment Function of Social Science Research’, Policy Analysis (4): 531–45 Weiss, Carol 1991 ‘Policy research as advocacy: Pro and con’, Knowledge and Policy (1/2): 37–56 Index 2-person symmetric domain, 234 3-person asymmetric domain, 235 2001 Survey of Doctorate Recipients, 81 ability versus incentives, 457, 458 absorptive capacities, 355, 447–50 academic capitalism, 383 see university technology transfer academic entrepreneurs, 381 entrepreneurial propensity, 386 inventive capacity, 385 technology transfer process, 382 acquisitions, 193 effect, 202 on biotech firms, 191 adaptive policy maker, 441 Akaike Information Criteria (AIC), 411 Almon Model, 407 see polynomial distributed lag (PDL) model Alpha chip, 10, 85, 86 AMD, 128 Amdahl, 243 American universities, 269, 387 An Evolutionary Theory of Economic Change, 29, 30 anticipatory innovation, 128 anti-commons, 461 Aoki, Masahiko, 227 Apple, 111, 112 Apple II, 113, 114, 115, 117, 119 Apple III, 116 Arora, Ashish, 141 Arrow, Kenneth, 281 artificial environment evaluation mechanism, 304 Association of University Technology Managers (AUTM), 270 automobile industry, spinoffs, 189 Babcock, Prof Stephen M., 435 backward compatibility, 106, 116 Barro, R.J., 476 Bayesian formulae, 199 490 Bayesian learning, 196 Bayh–Dole Act, 96, 97, 98, 261, 264–7, 270, 381, 383 Behavioral Theory of the Firm, 302 Bercovitz, Janet, 381 Better Regulation package, 477 biotech firms, 189 acquisitions and IPOs effects, 191 bisociation, 19, 385 Blaaauw, 243 Board of Trade and Industry, 260 bootstrapping exercises, 166 Boston, 86 boundary-spanners, 385, 386, 392 Bozdogan index of Information Complexity (ICOMP ), 411 Bresnahan, Timothy, 105 Brody, William, 388 Broocks, 243 browser commercialization, 129 Buick, 189 bundling of multiple domains by N-person social-exchange domain, 237 by single player, 236 by third strategic party, 236 business conceptions, competition between, 358 business conduct, 444 Business Cycles, 32, 38, 42, 56, 60 business stealing, 55 see creative destruction Cadillac, 189 cannibalization fears, 194 capability failures, 479 capitalism, 29, 73, 141, 142, 441, 465 demise, 141 Capitalism, Socialism and Democracy, 42, 45, 60, 73, 279, 430 Caracostas, Paraskevas, 464 Carnegie Tech crew, 30 Carrothers, Wallace, 85 Index Chandler, Albert, 35 China, 241, 442 Chinese economy, 241 Clarke, Charles, 256 clone competition, 122 clustering of innovations, 49, 50 Cobban, Prof A B., 255, 256 codified versus tactic knowledge in science production, 421 Cohen Wesley M., 73 Coherent, 190 coinnovation, 308 see HP and ST coinnovation, case study Cold War, 431 commercial employer, problem for, 357 commons domain, 235 Compaq, 122 competence destroying, 459 competence enhancing, 458 competence problem evolutionary persepective, 294 competition policy, 455 current and future innovation, 462 and intellectual property rights, 456 competitive self-sorting process, 359 complex innovations, 461 computer industry, 145 conclusion knowledge, 447 corporate capabilities, competition and performances, 177 CP/M, 112, 113, 114, 117, 119 creative destruction, 32, 134, 381 in PC industry, 105 creativity, 80, 96, 97 Crespi, Gustavo, 399 cross-functional teams, 386 crowding-out, 79 cumulative causation, 44 Cuomo, Andrea, 308, 313 David, Paul A., 251 Dawkins, Richard, 46 decision-maker, 47, 48, 475 Dell, 122 Denmark, 286 Detroit, 189 Digital, 85 diminishing returns, 31, 32, 39, 451 disagreements, 195 acquisitions effect, 202 dynamics of, 197 spinoff formation hazard, 200 and parent quality, 208 spinoff quality, 203 discipline-oriented programmes, 483 491 disk drive industry, spinoffs, 190 disruptive innovations, 458–9 divided technical leadership, 120, 121, 147 Dosi, Giovanni, 153 Doz, Yves L., 308 dual degree individuals, 386, 394 Duke University, 382 DuPont, 85, 90 economic decision maker, 47 economic evolution, 33 economic experiments, 148 economic growth, 27, 32 as central focus of economic analysis, 27 understanding of, 64 economic growth and technology Schumpeterian legacy evolutionary approach, 45–6 neoclassical views of, 52 Schumpeterian paradigms, 45 economic growth theory, 42 in immediate postwar period, 43 mathematization, 68 promising new directions, 32 economic space, 471 economists, 10, 69, 77, 93, 99, 141, 143, 144, 227, 265 economy, performance of, 467 Edison, 76 education system and public R&D, 449 effectuation theory, 347 employee-technologists, 77, 87, 89, 90, 92 encoded knowledge, 353 transfer, 355 endogenous growth neo-classical theories, 477 endogenous growth theory, 58, 476 government intervention, 476 engineers, 80, 86, 191, 354, 357, 360 enlightenment model, 486 entrants, 146 origin of, 126 entrepreneurial history, 348, 373 entrepreneurial incentive, 74 entrepreneurial process constraints, 353 entrepreneurial propensity, academic entrepreneurs, 386 entrepreneurial university, 383 see also university technology transfer entrepreneurs, 142 entrepreneurship, 42, 187 policy, 348 Schumpeterian legacy, 340 entry barriers, 118, 125 492 Index Europe, 14, 147, 442, 455, 465 innovation gap, 264 European Commission, 477 Communication, 252, 253, 275, 276 European integration, 471 European medieval university, 273 European Patent Office, 265, 266 European post-national institutional building, 472 European research area (ERA) evidence-based policies innovation gap, 265 Bayh–Dole Act, 267 intellectual property exploitation, 269 European Sustainable Development Strategy, 477 European Union Member States, 466 research policy, impact on Greece, 473 European university system institutional creativity envisaged, 254 institutional innovations, developing, 271 medieval institutional innovation, evolving legacy, 258 vision deciphered, 255 wealth-creating university quest, 260 evaluation mechanism, 302 evolutionary approach to economic growth, 45–51 and history, 48 evolutionary growth theory, 37 development, 29 evolutionary policy analysis, 442 evolutionary policy maker, 451 evolutionary theories, 293 competence problem, 294 evaluation mechanism, 302 selection problems, 296 variety problems, 295 evolutionary tradition challenges, 59 evolutionist, 481 ex ante and ex poste incentives, 459 ex ante monopoly, 456, 459, 460 ex poste monopoly, 456, 460 excellence subsystem, 473 excellence system, 473 extrinsic incentives, 77 faculty invention disclosure, 383 faculty invention nondisclosure, 384 Fagerberg, Jan, 64 Fairchild Semiconductor Corporation, 85, 94, 187, 188 Feldman, Maryann, 381 Finland, 468 firm’s choice, 195 fixed effect approach citation counts, 406 Ford, 189 Fordism, 142 foresight, 326, 482 former scientists, 361, 368 framework failure, 480 France, 262, 405 Fraunhofer Gesellschaft, 274 FutuRIS initiative, 474 game-theoretic frame for understanding institutions, 229 action profile, 229 domain, 229 as exogenous rules, 230 as equilibrium conceptualization, 231 as equilibrium outcome, 230 as players, 230 game form, 230 general knowledge, 43, 54 general purpose technologies (GPTs), 55 recombination of, 114 General Social Survey (GSS), 81 German university system, 36 Germany, 98, 238, 262, 266 employee-inventor, 98 Geroski, Paul A., 455 Geuna, Aldo, 399 Gibrat law, 159 global space, 471 GNP series, 32 Google, 147 graduates, trained with technology transfer objectives, 388, 394 Graphical User Interface (GUI), 123 Great Depression, 43 Greece EU research policy impact on, 473 gross domestic product (GDP), 405 Gross Expenditures in Research and Development (GERD), 411 growth-accounting, 43 GSS, 82 Hercules, 120 HERD, 405 investment and research output, time lag econometric model, 407 Herfindahl index, of decision-making authorities, 200 Hertz, 297, 298 heterogeneity, 50 Index in innovation and production function, 172 heterogeneous firms, 181 Hewlett Packard, 123 higher education (HE) sector, OECD definition of, 405 high-tech industries, spinoff entry in, 187 hiring firm, 365 history-friendly models, 52 Hitachi, 98 Hong Kong, 241 horizontal differentiation, 53 type models, 53 HP and ST coinnovation alliance design, 313 actual cost data sharing, 314 internal performance incentives, 313 shadow of the future, 313 virtual joint venture, 313 collaboration and its interpretation, 311 evolution, 316 human knowledge, 33 human practice, 33, 34, 35, 37 IBM, 115–16, 146, 243 clone competition, 122 creative destruction waves consequences, 124 precedents, 123 divided technical leadership, 120 impact assessment, 477 immigrants, 387–94 impresarii, 318 incentives, 457 incremental innovations, 46, 48, 49, 56 India, 442 individual incentives effect on innovation, 84 extrinsic incentives, 77 impact on innovative activity and firms performance, 87 implications management, 94 policy, 96 intrinsic incentives, 78 social incentives, 78 and technological change, 76 technologists, 88, 89 industrial dynamics, 219 growing literature on, 37 industrial evolution statistical regularities, 153 industrial structures, 158 information, 446 493 information asymmetry, 77 information transmission system, 444 innovation, 1, 24, 47, 49, 59, 273, 381, 441, 442, 443 innovation ecologies, 448–9 innovation-enhancing policies, 472 Innovation Platform, 469 working group, 469 innovation policy, 441, 443, 452 evolving knowledge and evolving economic order, 443 innovation policy field impact assessment, 477 innovation vs other social actions, 467 national vs other territorial scale, 470 Systems of Innovation (SI) approach, 472 innovation process actors, connection between, 450 innovation size, 56 innovation system, 447–8, 448, 451, 470 central policy, 449 policy instruments, 451 policy issues, 449 policy themes, 449 innovative variation, 445 institutional change, 228 mechanisms, 238 dynamic institutional complementarities, 241 overlapping social embeddedness, 240 Schumpeterian dis-bundling and newbundling, 239 institutional complementarities, 237 dynamic version, 241 institutional failure, 479 institutions, 231, 279 game-theoretic frame, 229 primitive domains, 234 2-person symmetric domain, 234 3-person asymmetric domain, 235 linkages, generic modes, 236 N-person symmetric (asymmetric) domain, 235 Schumpeterian innovation, 227 Intel, 85, 94, 111, 131 Intellectual Property Agreements (IPA), 268 intellectual property ownership, 262 intellectual property rights, 455–60 and competition policy, 456 current and future innovation, 462 innovation impede rate anti-commons, 461 complex innovation, 461 494 Index intermediary spaces, 471 international research and development, 418 international spillovers, 426 scientific production, 417 Internet, 127 anticipatory innovation, 128 creative destruction waves beginning, 129 end, 132 precedents, 127 existing firms, reaction of, 131 intra-organizational career paths, 365 intrinsic incentives, 78, 80 intrinsic motivation, 78, 365 invention disclosure, 383 boundary-spanners, 385, 386, 392 cross-functional teams, 386 dual degree individuals, 386–94 faculty behavior, 392 graduates, trained with technology transfer objectives, 388, 394 immigrants, 387–94 inventive capacity, academic entrepreneurs, 385 inventors incentives of, 80 Italy, 262, 405 ius ubique docendi, 258 knowledge exchange/cooperation, 417 knowledge integration, barriers, 308 knowledge complexity, 309 knowledge dispersion, 309 knowledge diversity, 308 knowledge ownership, 309 knowledge production function model, 401 aggregation problems, 403 knowledge capital, 402 knowledge spillovers, 48, 54, 425, 427 knowledge transfer, 358 Japan, 98, 147, 238 employee-inventor, 98 Japanese telecommunications firms, 366 Japanese universities, 262 Jobs, Steve, 90, 146 Johns Hopkins University, 382 Jones critique, 57 Macintosh, 124, 125, 126 Management individual incentives implications, 94 managers, 144 Mandeville, 30 ship designs, 34 Marburger, John, 478 Marconi, 297, 298 Mariani, Giuseppe, 313 market failure types, 479 market innovation, 118 market order, 444, 446 evolution, 445 market position, 457 market power, 459 market process, 444–5, 447 markets, 441, 445, 446 monopoly powers in, 144 market structure, 458 Marshall, 28, 29 Massachusetts, 192 McKelvey, Maureen, 372 mere threat approach, 110 metanational advantage, 309 Metcalfe, Stanley, 32, 441 Kaplan Meier survival curves, 207 Keynesian revolution, 64 Klepper, Steven, 187 knowledge, 33, 35, 443, 455, 486 generation, 444 growth, 444, 448 as public good, 446 knowledge-based entrepreneurship, 352 entrepreneurial sorting process, 358 incumbent firms and intra-organizational career paths role, 363 latest technological developments tracking, problems, 364 start-up firms, 360 scientific knowledge and its transfer conditions, 355 knowledge capital, 402 depreciation rate, 403 large firms, 362 laser industry, spinoffs, 190 law firms, spinoffs, 192 law of proportionate effects, 162 learning processes, 34, 461 Leontief-technology, 50 Levinthal, Daniel A., 293 LIM standard, 120 linear model of innovation, 475 linked games types, 236 Lotus, 109, 120 love-of-variety models, 53 see horizontal differentiation type models Lucas, R., 476 ˚ ke, 279 Lundvall, Bengt-A Index Microsoft, 111, 125, 126, 128, 129, 131, 146 antitrust case, 110 Microsoft Excel, 124 Microsoft Word, 124 Minitel, 129 MITS, 111 mixed incentives for openness and vertical disintegration, 117 modern capitalism, as social networks system, 431 modern capitalist dynamic, 449 modern capitalist economies, 444 modular knowledge, 147 modularization, 242, 283 Momentum Theorem, 241 monopoly, 456–7 in markets, 144 Moore, Gordon, 85, 94 Moore’s law, 106 Morlacchi, Piera, 333 motivation crowding-out, 95 moving equilibrium, 66 N-person symmetric (asymmetric) domain, 235 Nash equilibrium, 231 National Semiconductor, 85 national spaces, 471 national system of innovation (NSI), 467, 473, 478, 479 NBER, 32 Nelson, Richard R., 27 Nelson and Winter model, 51 Nelson social technologies, neoclassical economics, 28 neoclassical growth models, 43 neoclassical growth theory, 30 neo-classical views of economic growth and technology, 52 Netscape, 127, 129, 147 network effects, 112–18, 130 network failure, 480 networks, 334–8 Schumpeterian legacy, 344 new growth theory, 42, 55, 66 new knowledge, 21, 44, 352, 355, 359, 402, 406 publications and citations, 406 NeXT computers, 146 Nichia, 98 NIH funding, 392 nonarbitrage principle, 222 non-HERD R&D, 411 nonpecuniary incentives, 81, 83, 85, 87, 95 495 novelty, 47 Noyce, Robert, 85 NSF, 80, 82 OECD, 477 OECD countries ERD investments, 404 scientific production, 399 office applications, 113 off-line evaluation, 303 Olds Motor Works, 189 on-line evaluation, 303 open architecture, 118 open markets, 446 open national systems of innovation, 470 open source software, 87 open standards, 121, 145, 147 openness, 117 organizational-exchange domain, 235 organizational innovation in government, 470 Orsenigom Luigi, 219 overconfidence, 197, 204 overlapping social embeddedness, 240 Paley, William, 46 Panel Data Unit root tests, 407 Papal Authority, 272 paradigm/trajectory heuristic, technological, 49, 50 Pareto distribution, 156 Pareto optimality, 28 Pareto-type probability, 59, 157 partnerships, with migrating former scientists, 362 Pasteur, 76 patent, 98, 461 patent policy, 96, 110 patent protection, 264 Patent and Trademark Law Amendment Act 1980, see Bayh–Dola Act, 381 Paul II, John, 272 PC industry, creative destruction waves, 105–18 beginning, 114–29 consequences, 124 entrants, origin of, 126 office applications, 113 openness and vertical disintegration, 117 organizations, 107 precedents, 111, 123–4, 127 rebuffed, 127 sequence, 119 technology and demand, 105 threats and policies, 109 496 Index pecuniary incentives, 80, 94, 95, 97 physical technologies, 36 Pixar, 90 policy individual incentives impliations, 96 policy shapers, 464 empirical observations, implications of, 485 policy instruments, inventing, 482 policy objective, 466 problem delineation and objective setting, 478 public intervention resources, legitimizing, 475 policy subsystem, 480 political-exchange domain, 235 polynomial distributed lag (PDL) model, 407 constraints, 414 positive feedback, 44 post-Keynesian growth theory, 64 post-Keynesian views, 44, 45, 65 Principles, 28 PRISM chip, 85 problem-oriented programmes, 483, 484 procedural capabilities, 88 procedural knowledge, 356 production efficiencies, 174 professional management, 36 professional training, 388 profitabilities, 167 promotion plans, 366, 367 propositional knowledge, 355 proximity, transmission mechanism, 421 public budgets, restriction on, 465 public enterprise, 445 public funding for research, 476 public intervention resources legitimizing, 475 public opinion, 465 public policy, 98 public policy cycle, 481 publicly traded firms, 192 quality ladder models, 53 R&D, 53 investment in, 442 spillovers, 53, 54, 86, 87 real options, 244, 293, 299, 300 reciprocal ‘Matthew effect’, 432 recombination, 114, 136 Reimers, Niels, 271 representative agent, 220 research public action in, 475 public funding, 476 research activity structuring discipline-oriented programmes, 483 problem-oriented programmes, 483 structural programmes, 484 technology-oriented programmes, 483 Research Center for Entrepreneurial History, 348 research policy, 481 researchers incentives of, 80 restless capitalism, 444, 448 Rick, Ken, 313, 316 Romer, P., 476 royalty-sharing incentives, 383 San Diego, 189, 192 Sanyo, 315 Sauermann, Henry, 73 savings rate, 52 Scale and Scope, 35 Schmalensee, Richard, 110 Schumpeter, Joseph, 73, 381 Schumpeter’s prophecy and individual incentives, 73 Schumpeter’s views, 29 Schumpeterian dis-bundling and newbundling, 239 Schumpeterian innovation in institutions, 227 Schumpeterian legacies, 57, 333 for entrepreneurship and networks, 339 entrepreneurship, 340 forgotten legacy, 343 networks, 344 discussion, 346 Schumpeterian’s long wave theory growing literature on, 38 Schwartz Bayesian Information Criteria (SBC), 411 science, 431, 444 Science and Technology Policy Council, 468 tasks, 469 science policy, 467 scientific knowledge tacit elements, 356 scientific production, modelling and measuring, 399 data sources, 404–7 international spillover proximity contribution, 421 USA importance, 422 Index international spillovers, 417 investment in HERD and research output, time lag between polynomial distributed lag model, 407 knowledge production function model, 401 research output categories, 406 scientists, 80, 84, 85, 90, 143, 354, 357, 360, 363, 375, 435 incentives of, 80 sectoral structuring, 484 sectoral systems, of innovation, 471 selection, 47 problems heretogeneity, 296 in organizations and its hierarchy, 298 intermediate selection, 299 semiconductor firms, 191 SGS MicroElectronicca, 311 Shockley, 85, 143 Shuji Nakamura, 98 Silicon Valley, 86, 187, 189, 190, 191, 192, 242 clustering of, 245 slow learning, 295 small firms, 361 Smith, Adam, 27, 30, 35, 229 social incentives, 78 social technologies, 31, 38, 39, 68 social-exchange domain, 235 socialism, 142 solipsism, 197, 204 Solow, 28 Solow’s model, 29, 56 see neoclassical growth model Spectra Physics, 190 spillovers, 20, 66, 211, 427 in R&D, 53, 54, 86 of knowledge, 48, 54, 425, 427 of technology, 54, 207 spinoffs, 146 in high-tech industries, 187 disagreements, 195 empirical regularities, 189 theories, 193 spreadsheet, 113, 115 start-up firms, 360 statistical regularities, in industrial evolution, 153 corporate growth rates, 159 autocorrelation, 166 distributions, 164 growth variability, 163 evolutionary interpretations, 181 497 innovation and production efficiency, 172 profitabilities and their dynamics, 167 size distributin, 155 steady state growth rates, 56, 57 Steinmueller, W Edward, 430 Stevenson–Wydler Act, 261 strategic alliances, knowledge mobilizing, 308 see HP and ST coinnovation, case study strategic research agenda, 482 structural holes, 339 structural programme, 484 studium generale, 256, 257, 258 studium particulare, 256 sub-markets, 297 substantive capabilities, 88 Sun, 131 sustaining innovations, 458–9 Sweden, 262, 405 systems of innovation, 478 activities, 478 tacit knowledge, 353–6 transfer, 357 Taussig, F.W., 75 Taylorism, 142 teamwork, 80 technical capabilities, 294 technical knowledge generation of, 44 technological change and individual incentives, 76 technological innovativeness, 173 technological paradigm, 49 technological revolution, 47 technological spillovers, 54, 207 technological trajectory, 49 technologists, 76, 86, 87, 88, 89, 91 technology, 30, 43 as endogenous phenomenon, 44 policy level, 483 as public good, 43 social shaping of, 483, 484 theoretical level, 483 technology-oriented programmes, 483 Technology Platforms, 482 technology policy, 467, 481 framework, 480 technology transfer, 97, 98 and academic entrepreneurs, 381 The Netherlands, 405, 469 The Theory of Economic Development, 29, 42, 59, 228, 442 The Wealth of Nations, 27 The´orie de la re´gulation, 471 498 Index Theorie der wirtschaftlichen Entwickelung, 42, 59 Thompson, Peter, 187 Thomson ISI(R) National Science Indicators, 406 Thomson Semiconducteurs, 311 tit-for-tat information exchange, 86 Union Carbide, 147 United Kingdom, 256, 260, 262, 405, 455, 477 United States, 20, 98, 261, 268, 269, 418, 426, 427, 442, 465 employee-inventors, 98 spillover, 422 universitas, 257 universities, 431, 434 role in commercializing research results, 251 EC’s Communication, 252 University of Chicago National Opinion Research Center, 81 university research commercialization of, 285–6 university technology transfer, 381 data, variables and research methods, 389 faculty invention disclosure, 381 process, 382 variety problems evolutionary perspectives, 295 venture capital (VC) financing, 189, 243 Verspagen, Bart, 42 vertical differentiation type models, 53 see also quality ladder model, 54 vertical disintegration, 117, 119, 121 virtual joint venture, 316 VisiCalc, 113, 118, 119 Walras, 286 Walrasian general equilibrium, 232 Westinghouse engineer, 297, 298 Wilhem von Humbolt, 259 Windows 3.0, 124 Wintel, 127 Winter, Sidney G., 29, 322 wireless technology evolution, 297 Witt, Ulrich, 352 word processor, 113, 115 WordPerfect, 109, 124 WordStar, 113, 118, 119 Wrazel, Julie, 308, 313, 315 WWW, 127–9 Zellner, Christian, 352 Zipf Law, 156–7 ... the innovation process As far as the innovation process is concerned, the book concentrates on two cornerstones of the innovation process: incentives and creative destruction The first one represents... the attention of the economic profession Only with the work by Christopher Freeman, Nathan Rosenberg, Richard Nelson, Moses Abramovitz, and others, followed later on by the contributions of new... Klepper, and Peter Thompson Their contributions are discussed by Luigi Orsenigo 2.4 Institutions for innovations and innovation in institutions This topic it an extremely important one, but it has been