SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Por:Carlos ChambelMiguel Leocádio
João Meyer
SECTORAL PATTERNS OF TECHNICAL CHANGESECTORAL PATTERNS OF TECHNICAL CHANGESECTORAL PATTERNS OF TECHNICAL CHANGESECTORAL PATTERNS OF TECHNICAL CHANGE
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
SummarySummary:
1. Sectoral Patterns of Innovation
2. Towards a Taxonomy and a Theory
3. Some Analytical Implications
4. Future Perspectives
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Purpose: The similarities and diferences amongst sectors in thesources, nature and impact of innovations, defined by the sources of knowledge imputs, by the sizeand principal lines of activity of inovating firms, and by the sectors of Innovations’ production and main use.
The Data Base: Data collected by Townsend et al. on the characteristicsof about 2000 significant innovations, and of innovating Firms, in Britain from 1945 to 1979.
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Sectoral patterns of innovationSectoral patterns of innovation
Institutional sources of main knowledge inputs
• 7% from the public technological infrastructure (higher education, government laboratories, and research associations)
• 59% from within the innovating firms themselves
• 34% from other firms
Number of observations: 3013
AnalysisAnalysis
Number of sources appointed ~ 1,5
Underestimate the contribution made by public technology infrastructure
Industrial R & D total expenditures: ¾ on D
Innovation vs. Development: the costs of transfer can be high
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Sectoral patterns of innovationSectoral patterns of innovation
Sectoral patterns of production and use of innovations
Product innovations: those innovations that are used outside their sector of production
Process innovations: those innovations that are used inside their sector of production
Product innovations ~ 70%
Ratio of production to use of technology:5.3 to 1 for manufacturing as a whole
0.1 to 1 for outside manufacturing
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Sectoral patterns of innovationSectoral patterns of innovation
Sectoral patterns of production and use of innovations
Instruments, Mechanical Engineering,
Chemicals, Building Materials (mainly
glass and cement and electrical and
electronical engineering
Innovations produced
in the sector:
Innovations used
in the sector:
Product Innovations Process Innovations
Leather and footwear, textiles,
vehicles, metal manufacture,
shipbuilding and food and drink
All sectors of manufacturing
except textilesTextiles
Main Sectors
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Sectoral patterns of innovationSectoral patterns of innovation
Sectoral patterns of production and use of innovations
Building materials, metal
manufacture and food and drink
(Caracterized by assembly
operations) Shipbuilding and vehicles
Production > Use
Production Use
Production < Use
Instruments, mechanical engineering,
chemicals and electrical and
electronical engineering
(Caracterized by continuous
process technology)
(Mainly process industries)
InnovationsInnovations
Note
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Sectoral patterns of innovationSectoral patterns of innovation
Caracteristics of innovating firms: Size and technological diversification
• Big contribution of small firms (1 - 999 employees) in mechanical and instrument engineering, textiles, and leather and footwear.• Big contribution of large firms (10,000 and more employees) in other sectors.
According to the sector of the innovations:
According to the principal sector of the innovating firms´ activity:
• In sectors where large firms predominate, the two size distributions are very similar.• In mechanical and instrument engineering, and in textiles, both the number of innovations and the relative contribution of large firms are bigger when classified by sector of innovation, than when classified by the principal sector of activity of the innovating firm.
A relatively large number of innovations are produced in these sectors by relatively large firmswith their principal activities in other sectors. Continuous process and assembly industries
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
The ingredients
Knowledge applied by firms is not general purpose and easily transmitted and reproduced
Technical change is a cumulative process to firms what they can try to do in future is strongly conditioned by what they have been able to do in the past
Variety – sectors vary in the relative importance of product and process innovations, in sources of process technology, in size of technological diversification of innovating firms
Appropriate for specific applications and appropriated
for specific firms
Technical change comes mainly from suppliers of equipment
Firms and assembly and continuous process industries tend to concentrate their innovative resourses on process innovations
Some regularities begin to change
Try to categorise and explain the caracteristics:to propose a taxonomy and a teory
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Supplier dominated firmsSupplier dominated firms Traditional sectors of manufacturing, agriculture, wood & paper, housebuilding, many
financial and commercial services
They are generally small and their in-house R&D and engineering capabilities are weak
Make a minor contribution to their process or product technology high proportion of proccess innovation produced by other sectors
Most innovations come from suppliers of eqp and materials
Uma grande parte dos processos inovadores usados é originada em outros sectores
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Production intensive firms Large scale fabrication & assembly production
Improved transportation, simplification of production tasks
Unit capacity costs can (potentially) decreased 1% by every 3% in plant capacity
Fabrication & assembly machines take progressively more complex and more demanding tasks
Continuous processes increased scale & high temperatures have resulted from improvements in materials, control instrumentation and power sources
Complex and interdependent production systems with external costs of failure in any part very considerable trouble-shooting and process engineering have been established bottlenecks corrected improvements in productivity
Departamentos de engenharia de produção constituem uma grande fonte de inovação nas empresas de produção intensiva
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Science based firms Found in chemical and electronic / electrical sectors
Main sources of technology are R&D activities in the sectors
Products depended on prior development of basic science (ex:synthetic chemistry, biochemistry, electromagnetism, radio waves, solid state physics, etc)
It has been difficult for firms outside the sectors to enter them
Firms appropriate their innovating leads through a mix of methods (patents, secrecy, natural technical lags, firm specific skills)
Whose trade is not to do anything, but to observe
everything
As Science based firms têm uma grande contribuição para a inovação: na indústria química encontram-se valores de 40% na electrónica/produtos eléctricos há uma contribuição de cerca de 50% na engenharia mecânica os valores baixam para 20%
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Specialised equipment suppliers
Science basedfirms
Scale intensive
firms
Supplier dominated
firms
Technological linkages and changing trajectories
Power tools, transport equipmentConsumer electronics, plastics
Plastics & electronics for car industry
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Demand Pull with stronger influence on innovative activity
Strong association between volume of innovative activity (patents) and investment activity in user industries, rather than in the output of the supplier industries.
Schmookler:(66)
Investment both in Supplier Dominated and Production Intensive firms stimulate innovative activity No surprise! Planning of investment and co-ordination with production
Pavitt:(84)
Implications of proposed theoryImplications of proposed theoryScience and Technology push vs Demand Pull
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Implications of Proposed TheoryImplications of Proposed TheoryProduct vs Process innovation
High proportion of Science-based firms (Also important in other sectors, like specialized suppliers: mechanical and instrument engineering)
Important Product Innovation:
-Positively associated with Patent intensity and R&D
-Negatively associated with scale and complexity of process technology
Product Innovation
Production intensive sectors is expected both high proportion of resources in process innovation and high capital intensities, size of plant and industrial concentration
Process Innovation
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Supplier-dominated sectors: firms and production plant small in size; innovations coming from suppliers
Production intensive firms: large in size; process technology generated in-house
Positive relation: proportion of a sector’s process technology generated in-house and size of plant or firm in sector
Upstream equipment suppliers become important source of process innovation with increasing size of market for production process equipment
Reflects greater division of labor in production
Implications of Proposed TheoryImplications of Proposed TheoryThe locus of process innovation
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Production intensive firms: diversify less in production than in technology. Textiles on the other hand diversify more in production than in technology Non technical complementarities with other sectors
Supplier-dominated sectors: Upstream technological diversification into sectors supplying equipment :
-Negatively associated with R&D intensity
-Positively associated with scale and complexity of production technology (innovation activities on production techniques and upstream equipment)
The proposed model, identifies technological trajectories of firms as a function of their principal activities Prediction of possible paths of technological diversification
Uncertain results of research are likely to give better results in a diversified firm
Implications of Proposed TheoryImplications of Proposed TheoryDiversification
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Implications of Proposed TheoryImplications of Proposed TheoryFirm size and industrial structure
Supplier-dominated sectors: increase in size is usually not attributed to innovation, although might enable more efficient process technology
Production intensive firms: innovation associated with large and increasing size
Uncertain results of research creates tendencies for concentration of both production and innovative activities
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY
M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management
Future PerspectivesFuture Perspectives
Proposed taxonomy needs to be tested
• On the basis of complete sectoral coverage
• Accumulated case studies
• Data of innovative activity becoming available (patents offices)
Proposed taxonomy needs to be modified and extended
• Exploitation of natural resources included in production intensive...
May be used in future by policy makers and analists
• Relative contribution of small and large firms to innovation
• Technical change; the directions of innovative activities
Conceptualization : most generalizations are likely to be wrong
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