The impact of technological regimes on patterns of sustained and sporadic innovation activities in U

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• The impact of technological regimes on patterns
  of sustained and sporadic innovation activities
  in UK industries

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Schumpeterian patterns of innovation
Division between Schumpeters creative
destruction and creative accumulation Division
between radical innovation and incremental
innovation Taken up as distinction between
Schumpeter Mark I and Mark II models widening
and deepening patterns Different patterns of
innovation between technologies across
industries recognised Scherer (1965) Pavitt
(1987) Malerba and Orsenigo (1996)
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Technological regimes and patterns of innovation
Building on Breschi, Malerba, Orsenigo (2000)
work on technological regimes as determinants of
widening and deepening patterns of innovation

• Characteristics of a technology
• Dependent onappropriability conditions
  cumulativeness technological opportunity
  closeness to science base
• Technological opportunity
• Potential for innovation in an industry
• Degree to which there are many new opportunities
  associated with development of particular
  technology
• Appropriability
• Ability to protect innovation can consist of
  formal and strategic methods
• High appropriability increases incentives for RD
  but lessens diffusion through fewer spillovers
  (Geroski, 1995)

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Technological regimes cont.

• Cumulativeness of technical advances
• Todays innovations based on previous
  innovations incremental changes in technologies
  (Cantwell, 1989 Pavitt, 1987)
• High cumulativeness associated with sustained
  innovation activities
• Properties of the knowledge base
• Degree of closeness to either basic science or
  applied science

Breschi et al (2000) find deepening pattern
linked to tight appropriability, high
cumulativeness, low technological opportunity and
closeness to basic science
Take issue with closeness to basic science Our
hypothesis persistence linked to tight
appropriability, high cumulativeness, low
technological opportunity and closeness to
applied science
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Persistence of innovation

• Related work on persistence
• Geroski et al (1997) very small number of firms
  produce major innovations on regular basis.
  Chemicals sector accounts for highest percentage
  of patents and persistence
• Malerba, Orsenigo and Peretto (1997) strong core
  of persistent firms across countries and sectors
  and stability in that population, plus fringe of
  occasional innovators
• Cefis and Orsenigo (1998) and Cefis
  (forthcoming) firms tend to remain in their
  categories (non-innovators, moderate innovators,
  great innovators) over time. Intersectoral
  differences consistent across countries
  associated with characteristics of technology

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Novelty of this paper
Use of CIS 2 and CIS 3 overlap dataset of 786
enterprises covers period 1994-2000 Wide range
of types of innovation innovation active
product innovators process innovators novel
product innovators firms with 20 turnover
generated by new or improved products
enterprises with sustained expenditure on
in-house RD Wide range of sectors of
manufacturing and services high tech
manufacturing low tech manufacturing high tech
services low tech services Moves away from
focus on patent data What persistence means here
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Methodology
Patterns of innovation f (technological
opportunity, appropriability, cumulativeness,
closeness to the knowledge base, firm size)
Sustained innovation (innovation in CIS 2 and CIS
3) is associated with low technological
opportunity, high appropriability, high
cumulativeness, closeness to applied science,
large size Sporadic innovation (innovation in
either CIS 2 or CIS 3) is associated with high
technological opportunity, low appropriability,
low cumulativeness, closeness to basic science,
small size

• Measures of innovation
• Innovation active
• Product innovation
• Novel product innovation
• Process innovation
• 20 per cent or more of the total turnover derived
  from innovations
• In-house RD

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Industry patterns of sustained and sporadic
innovation
Sustained innovation Innovation in CIS 2 and
CIS 3 Sporadic innovation Innovation in
either CIS 2 or CIS 3 Measure of
innovation Innovation active
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Methodology cont.

• Technological opportunity
• OPP1 Relative number of product and/or process
  innovators in each industry (averages between
  CIS 2 and CIS 3)
• OPP2 Proportion of newly established firms in
  each sector in CIS 2.
• Appropriability
• APP1 Factor scores associated with strategic
  protection methods (importance of method)
• APP2 Factor scores associated with formal
  protection methods
• Cumulativeness
• CUM Index comprising product and process
  innovation, in-house RD, proportion of qualified
  scientists or engineers in CIS 2
• Properties of the knowledge base
• KB1 Factor scores associated with generic
  science (importance of information source)
• KB2 Factor scores associated with applied
  science
• Size Number of employees

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Industry patterns of OPP, APP, CUM, KB, size
High technological opportunity OPP1 chemicals,
scientific instruments, machinery and
telecommunications OPP2 real estate, utilities,
transport equipment, wholesale trade High
appropriability APP1 chemicals, machinery, other
business activities, scientific instruments
APP2 chemicals, non-metallic products,
transport equipment, machinery High
cumulativeness CUM chemicals, scientific
instruments, machinery, utilities Closeness to
the knowledge base KB1 utilities, machinery,
chemicals, non-metallic products KB2
telecommunications, scientific instruments,
finance and insurance, chemicals Large
size Size finance and insurance,
telecommunications, utilities, chemicals
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Regression results
SI f (OPP1, OPP2, APP1, APP2, CUM, KB1, KB2,
size) with
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Conclusions
Importance of cumulativeness for sustained
innovation degree to which resources committed
to innovation is indicator of persistent
innovator Importance of strong appropriability,
especially strategic appropriability Measurement
of innovation matters results come out more
strongly when innovation measured more generally.
Accords with others results that not much
persistence for radical breakthough innovations,
but more for routine types of innovation Size not
significant factor in persistence. Persistent
innovators often medium-sized and small
enterprises. Can see persistent innovation not
just in RD oriented manufacturing but in some
high tech services such as telecomms