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INNOVATION |
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by Valentino Piana (2003) |
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Innovation is the activity of people and organizations
to change themselves and the environment. It means breaking
routines and dominant ways of thinking, introducing new
things and behaviours, launching new standards. Focused by a creative orientation, it arises from unsatisfaction
with the current state of art, by leveraging technological and social
new opportunities. It is together an individual stance, an organizational process,
a social movement. Innovation is the complex development of discoveries
(eg. new physical laws) and inventions (eg. a new machinery) brought
in the business and social environment (eg. introduced on the market),
hopefully leading to diffusion (adoption by new users). During the diffusion path, improvements to both the idea
and implementation often require futher innovation. Successful innovations
are often imitated by other players in the
same industry or applied - by analogy - in other industries. Out of several cases, innovation can basically be: 1. a product innovation (e.g. new goods or services
put on sale); 2. a process innovation, which changes the way
a given good is produced within the firm or across a supply chain; 3. a behavioural innovation, when an organizational
routine is replaced with new ones. Quite often, the innovation turns out to be a mix of
all three “pure” categories, as with the case of the introduction
of a new product that require new productive competences and changes in
the organization. Furthermore, what is a product innovation for a supplier
can be a process innovation for a user, as with the case of a new
machine which revolutionizes the process of manufacturing. In this case,
investment is the means by which innovation is
spread over the economy. Although technology is often at the heart of an innovation,
also marketing, finance, organization all can be sources and multiplier
of innovation. In an elarged meaning, innovation embraces the introduction
of known things in new markets or in different industries. Relevant is also the environment with respect to
which something is said to be an innovation. Thus, we have innovation
with respect simply to past achievements of the innovator or to
the (local) market or to the world frontier. In the first
two cases, it is possible to obtain the innovation just by imitating
world-class practises.
The old linear model of innovation saw it as a one-way flow from science to technology, from business to market.
In
fact, today, after e.g. the contribution of Nathan
Rosenberg, it is clear that everything is linked to everything. Science,
technology, economy and society are self-propelling complex systems
where innovation is both endogenous in each one of them as well as the
outcome of the interaction among them. In other words, the crucial players in the innovation
are, at least, the following:
In short, the first determinant of innovation is the
innovative effort, measured by Research & Development expenditure,
both in public and private institutions, the number of researchers
and their lab/machinery endowments - But innovation can be triggered also by the application
of creativity and proper methods (e.g. kaizen) to normal production
processes (learning-by-doing, innovation-by-doing). Interaction with users and the implicit knowledge in the marketing departments often play a crucial
role for innovation. Education, learning and social rules are key determinants both in innovation and the diffusion phase. More in general, a conducive environment for innovation
is a large and diversified human capital, entrepreneurial spirit
both in business and the academy, a wide consumption, a pluralistic,
multi-polar open society. Innovation is a pervasive phenomenon, whose effects are often ambivalent, i.e. leading to opposite direction, depending on the goals of the innovator, the technological opportunities as well as the society constraints. In particular, innovation can exert an impact on the following variables:
Some effects are based on the asymmetry between the innovator and his competitors. Others depend on the large diffusion of the innovation, which in turn can be boosted by the presence of institutional arrangements, such as a pro-diffusion tax scheme. Diffusion is, in turn, the result of the increase of the market share of the innovator as well as the imitation by others. Both forces are usually connected with investment. This micro-dynamics explain - at least in part - the strong and violent fluctuations in the aggregate investment. The economy-wide effect of innovation are explored in this paper. Although innovations can often be seen as a punctual
artefact or event, Giovanni
Dosi has underlined that a flow of innovations tends to self-organize
along "technological trajectories", i.e. tendencies of
improvement along certain product features/performances by repeatedly
using similar heuristics (e.g. the trend of faster and more powerful computer
chips by miniaturization). In some cases, it is even possible to forecast future developments
of the successive waves of technologies by relying on past quantitative
trends (e.g. the Moore's Law of doubling the speed every 18 months). Innovations tend to cluster in time and space, since there
is often a strong interdependency and complementarity among them. The main differences in well-being across centuries have been due to superior product innovation which became affordable to the normal people. Across countries, the determinant of differences in income and wages can be traced back to productivity and innovation. Thus, it is exactly when and if useful innovative products become affordable to the general public that we can say that growth has taken place. This requires adequate level of per-capita GDP and a reasonally equitable distribution of knowledge and income. Systematic innovation is a feature of a complex national system. Thus, to large extent, long-term elements prevail on short-run macroeconomic fluctuation. Nonetheless, to the extent firms choose the timing of putting innovation on the market and in the production lines, a certain prevalence of the adoption of cost-reducing process innovation might better takes place during recessions, whereas higher-performance expensive innovative products are better sold during boom phases. Gross domestic expenditure on R&D by source of funds (71 countries) Education of future workforce: an international comparison of skills Formal
models and papers The economics of ex ante coordination Do R&D investments affect export performance? Profitability and innovation: an empirical survey Key Technological Trajectories and the Expansion of Mobile Internet Applications Modeling Industrial Dynamics with Innovative Entrants Innovation in the construction industry: study cases Agriculture
innovation system in Australia From patents to marketplace: The Irish case New
Technologies, Workplace Organisation and the Age Structure of the Workforce:
Firm-Level Evidence Innovation
science: the point of view of Industrial Engineering Books at Amazon Inside the Black Box: Technology and Economics - by Nathan Rosenberg Innovation,
Organization and Economic Dynamics: Selected Essays Technology, Development and Democracy: Limits of National Innovation Systems in the Age of Postmodernism - by Haider A. Khan
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