Combining the technological innovation systems framework with the entrepreneurs’ perspective on innovation

For their technological sustainability innovations to become successful, entrepreneurs can strategically shape the technological field in which they are involved. The technological innovation systems (TISs) literature has generated valuable insights into the processes which need to be stimulated for the successful development and implementation of innovative sustainability technologies. To explore the applicability of the TIS framework from the perspective of entrepreneurs, we conducted a case study in the Dutch smart grids sector. We found that the TIS framework generally matches the perspectives of entrepreneurs. For its use by entrepreneurs, we suggest a slight adaptation of this framework. The process ‘Market formation’ needs to be divided into processes that are driven by the government and processes that are driven by entrepreneurs. There should be a greater emphasis on collaborative marketing, on changing user behaviour and preferences and on the development of fair and feasible business models.     

Towards an integrated framework for analysing sustainable innovation policy

An integrated framework for the analysis of sustainable innovation policy was developed, based on a combination of the transition management (TM) framework, the strategic niche management approach, and policy recommendations, resulting from technological innovation system (TIS) studies. In the framework, the multi-level view from TM has been integrated with the functions approach from the TIS literature. The integrated policy framework shows that specific policy goals and measures can be found at the specific points of intervention related to (the interfaces between) landscape, regime, TIS and niches. The integrated framework suggests that stimulation of a TIS only makes sense when this action is well aligned with landscape and regime developments. The framework should be used in empirical studies for further testing and refinement.     

Innovative Assets And Inter-Asset Linkages—A Resource-Based Approach To Innovation

The paper proposes a framework for analyzing assets and inter-asset linkages associated with technological innovation. The framework is consistent with a Penrosian view of the firm and draws on recent contributions from both the more general resource-based perspective and the innovation and technology perspective of the firm.

Three broad categories of firm assets are distinguished: tradeable resources, technical/functional capabilities and managerial competences. Assets for technological innovation are defined as resources, technical capabilities and managerial competences for developing new products and processes. A taxonomy of generic innovative assets is proposed that distinguishes four generic categories of innovative assets: Scientific research assets, process innovative assets, product innovative application assets and aesthetic design assets. Critical inter-asset linkages are analyzed in terms of inter-asset specificity. It is argued that high degrees of inter-asset specificity provide greater scope for innovation and make higher demands on the innovative assets and their coordination than low degrees of inter-asset specificity. It is moreover suggested that complementary assets not only play the role of assuring proper commercialization of given innovations; they may also play a critical role as a ‘focusing device’ for directing the innovative process.

Finally, some implications for strategy in innovative firms are indicated. Thus, the proposed inter-asset framework may help to specify the notion of core competences and provide a more differentiated perspective on innovation strategy and first-mover advantages.     

Conceptual confusion – an analysis of the meaning of concepts in technological innovation systems and sociological functionalism

The purpose of this paper is to illustrate how conceptual confusion may be a significant obstacle to cross-disciplinary dialogue. We focus on the relationship between the framework of technological innovation systems (TIS) and sociological functionalism (SF). The paper argues that while there are similarities between the two schools of thought, in particular in the use of the terms ‘structure’ and ‘function’, these are more linguistic than substantive. We demonstrate this by assessing the validity of the spillover to TIS of four main points of critique raised against SF. We conclude by stating some lessons for improving cross-disciplinary communication.     

The harnessing of biotechnology in India: Which roads to travel?

In India, as in most developing countries, biotechnology was ushered in through public policy rather than individual firm initiatives. Throughout the 1980s and until the mid-1990s the focus of public policy was on creation of scientific capabilities and building of awareness of the potential of biotechnology. With the adoption of economic liberalization in the 1990s, the Indian State also began to sponsor private initiatives in capacity building. Today, the leading Indian firms have commercialized generic versions of original innovations developed by US and Japanese firms, using the traditional route of re-engineering. A handful of firms are actively engaged in first order innovation and in addition, a number of start-ups have emerged to make use of opportunities to provide contract research services to Western and Japanese multinationals. But can a focus on bio-generics and contracting for multinationals be used as a route for competence building and as a stepping stone to become original innovators? The present article shows that while India has ‘strong scientific and technological capabilities’, it is constrained by weak ‘social capabilities’ of its labor force, lack of ‘institutional capabilities’ in regulation and financing, infrastructural constraints and absence of national programs to achieve concrete targets in terms of biotechnology innovations to promote a more inclusive development.     

The economics of gateway technologies and network evolution: Lessons from electricity supply history

Contemporary economic issues concerning technological innovation and compatibility standardization in emergent ‘network’ industries are illuminated indirectly in this paper by the examination of the historical development of the technology of electric light and power systems in the United States and Europe during the late nineteenth and early twentieth century. The discussion focuses on the rivalry between the initially incompatible technical formulations of a system supplying electric lighting and power. In the dynamics of competition between alternative technologies under such conditions, the details of the timing of small historical events could have important and lasting consequences.Special notice is given to the role which the induced invention of a compatibility-creating technical device-the rotary converter-played in the conduct and resolution of the so-called ‘Battle of the Systems’. The rotary converter is analyzed as a paradigmatic ‘gateway innovation’, one of a large class of ‘minor’ technological innovations whose actual importance in the context of network evolution warrants greater recognition from economists.     

On the joint effect of technological and management innovations on performance: increasing or diminishing returns?

Most studies on innovation are aimed at covering technological innovation, neglecting other modes of innovation based on non-technological drivers. The latter, referred to as management innovation, consists of the implementation of new management practices, processes or organisational tasks. This work advances knowledge on the topic by exploring the joint effect of simultaneously introducing technological and management innovations on performance. Based on an analysis of 12,563 Spanish firms drawn from CIS data, our findings suggest that firms frequently pursue the simultaneous or joint introduction of both technological and management innovations and that integration impacts positively on a firm’s performance, evidencing an inverted U-shape that suggest positive but diminishing returns. A theoretical framework using the capability-based view embraces the emerging conversation on management innovation issues and its relationship with the well-researched technological one.     

Sources of technological innovation: Radical and incremental innovation problem-driven to support competitive advantage of firms

A fundamental problem in the field of management of technology is how firms develop radical and incremental innovations that sustain the competitive advantage in markets. Current frameworks provide some explanations but the general sources of major and minor technological breakthroughs are hardly known. The study here confronts this problem by developing a conceptual framework of problem-driven innovation. The inductive study of the pharmaceutical industry (focusing on ground-breaking drugs for lung cancer treatment) seems to show that the co-evolution of consequential problems and their solutions induce the emergence and development of radical innovations. In fact, firms have a strong incentive to find innovative solutions to unsolved problems in order to achieve the prospect of a (temporary) profit monopoly and competitive advantage in markets characterised by technological dynamisms. The theoretical framework of this study can be generalised to explain one of the sources of innovation that supports technological and industrial change in a Schumpeterian world of innovation-based competition.     

Persistence of product innovation: comparing breakthrough and incremental product innovation

In this paper we examine whether and to what extent breakthrough and incremental product innovation is persistent at the firm level. Drawing on a panel database created from the Community Innovation Survey (CIS) we find that lagged breakthrough product innovation ‘new to the market’, has a significant and positive influence on firms’ ability to develop current breakthrough innovation, while this is not the case for incremental-product innovation ‘only new to the firm’. Our findings show that the dynamics of innovation persistence differ across types of (product) innovations.     

Legacy sectors: barriers to global innovation in agriculture and energy

The US national innovation system has a dual structure: part suited to rapid innovation, and part stubbornly resistant to change. The complex, established ‘Legacy sectors’ that resist change, particularly disruptive innovation, share common features that obstruct the market launch of innovations, over and above the ‘valley of death’ and other obstacles that have been the traditional focus of innovation policy. Innovations in Legacy sectors must penetrate a well-established and well-defended technological/economic/political/social paradigm that favours existing technology, characterised by (1) ‘perverse’ subsidies and price structures that create a mismatch between the incentives of producers and broader social goals, such as environmental sustainability, public health and safety, and geopolitical security; (2) established infrastructure and institutional architecture that imposes regulatory hurdles or other disadvantages to new entrants (3) market imperfections beyond those faced by other innovations: network economies, lumpiness, economies of scale, split incentives, needs for collective action, and transaction costs (4) politically powerful vested interests, reinforced by public support, that defend the paradigm and resist innovations that threaten their business models (5) public habits and expectations attuned to existing technology and (6) an established knowledge and human resources structure adapted to its needs. Beyond these obstacles, more socially desirable technologies that are driven by environmental or other non-market considerations must overcome the lack of agreed replacement standards against which putative alternatives can be judged. We have developed a new, integrative analytic framework for categorising the obstacles to market launch faced by Legacy sectors, and earlier applied this method to energy, health delivery, the long-distance electric grid, building, and air transport. In energy especially, the requirement for innovation is sufficiently urgent that large-scale domestic and collaborative international research should take place even at the cost of possible competitive disadvantage and even if it is some time before the USA adopts carbon charges and thereby puts pressure on the prevailing paradigm of fossil fuel use. We now extend this method to sustainable agriculture. American paradigms in agriculture and in energy are exported worldwide, delaying the development and spread of needed innovations that are not consistent with them. Foreign manufacturers wishing to enter US markets must suit their products in these sectors to American paradigms, while American exports of technology may be insufficiently cost conscious or respectful of environmental sustainability. Developing countries are technology takers and suffer from asymmetric innovative capability. They need to choose sources of technology best suited to their situation. India and China constitute new competitive threats, but also represent ‘innovative developing countries’ that have large domestic markets in which they are launching innovations aimed at their lower income populations.     

Technological Expectations And The Diffusion Of ‘Intermediate’ Technologies

The concept of ‘technological expectations’ has established itself as a key one in the smdy of innovation adoption. The article suggests that it may help explaining not just the adopters' timing decisions, but also their decisions regarding the kind of innovation they adopt. Innova tions that set the technological frontier face the competitive diffusion of some ‘intemdiate’ technologies. These may be either old technologies or ‘midrange’ ones. which purposefully lag behind the frontier, in order to impose lower adoption costs to their users.

Taking into account midrange innovations casts new light on the supply side of the diffu sion process. in terms of technological variety and selection effects. Drawing examples from the electronic colour pre-press industry, we highlight the equipment suppliers' anxious quest for the successful midrange innovation, able to hit the right txade-off between proximity to the frontier and adoption costs.     

Strategic management implications for the adoption of technological innovations in agricultural tractor: the role of scale factors and environmental attitude

Technological innovations in agricultural tractors have revolutionised farming, increased labour productivity and reduced operator's hazards. The purpose of this paper is to analyse the relation between agricultural tractors’ technological innovations and farm size, as well as users’ attitude on environmental impact of agricultural tractors according to their age and years of activity in the farm. Results, concerning Italy, highlight that high technological innovations of tractors are associated to larger farms, which are managed professionally by more efficient and sophisticated agricultural machineries. Empirical evidence also shows that the older the tractor adopters are and the longer they have been working in agriculture, the higher is their commitment to environment protection and safe working conditions. These results could be important for critical strategic management implications to spur technological innovation in agricultural tractors that better satisfy farmer's needs and to support the fruitful adoption of innovations for an efficient and safe modern agriculture.     

A Framework for Policy Oriented Innovation Studies in Industrialising Countries

This paper argues that there is increasing need for the integration of policy considerations in the formulation of research questions and in the development of analytical work in policy oriented innovation studies. Despite the fact that Evolutionary and Innovation Studies theories have offered new ways of incorporating policy, little explicitness in this regard has yet been achieved and there is a risk that academic research following the new perspectives will be of little relevance for policy. Rather than a ‘linear process’ starting with empirical research aimed at linking competitiveness and economic performance to technological capabilities (in a comparative perspective and aimed at identifying ‘best practice’) followed by very abstract and un-grounded ‘policy implications' - a new type of link between positive and normative economics in the field is required. Our approach suggests a new structure for policy-oriented and policy-relevant research, i.e. the integration of research on technological change and industrial transformation with research on policy and the development of a conceptual framework for the design and implementation of innovation policies.     

The sources of innovations – looking beyond technological opportunities*

The concept ‘technological opportunity’ has been coined to capture the vitality of the underlying sciences and technologies as the sources of technical progress that firms draw upon during innovation. Nonetheless, less attention has been paid to the fact that the commercialisation of technical progress through innovations also depends on the ability to assimilate a range of other sources of innovations, related less to the sciences and technologies and more to characteristics of the market and broader environment in which firms innovate. This paper focuses on the sectoral diversity in such sources, and on the ways in which they are assimilated and turned into commercialised innovations. The paper contributes to the extant literature by drawing on a unique survey data on Finnish innovations. The results both confirm and also challenge, and further elaborate on certain ‘stylised facts’ on the relationships between technological opportunities and the sources of innovation across sectors.     

技术创新系统的功能分析框架

近年来,以特定技术作为分析出发点的技术创新系统（TIS）思路被提出。该思路强调对创新系统运行及其目标实现具有重大作用的活动（activities）或过程（processes）,并称之为创新系统功能。系统功能之间既可以形成良性循环,加速系统的成长;也可能由于某个功能的缺失或不足而出现恶性循环,阻碍系统的发展,甚至使之崩溃。良性循环和恶性循环在一定的条件下会相互转化。在介绍和分析系统功能组合以及功能之间互动机制的基础上,提供了一个评估技术创新系统功能运行的分析框架,以期从功能的角度识别导致系统失灵的原因,为政策制定者提供干预目标。     

On the diffusion of toilets as bottom of the pyramid innovation: Lessons from sanitation entrepreneurs

There is an emerging body of literature on product innovations for the poor at the bottom of the income pyramid. However, there is little on why delivery systems succeed or fail in this context and the present paper attempts to fill this void by examining why and how sanitation entrepreneurs are succeeding in India to diffuse toilets — an innovation for rural households, which never had access to one before. The literature is analyzed and confronted with the actual field practices. We demonstrate that the common thread that unifies progressive sanitation entrepreneurs is their adoption of a ‘market based approach’. There are market failures stemming from the demand side due to problems in expression of demand and its mismatch with the perceived value of the innovation. In response, sanitation entrepreneurs go beyond the standard linear model of assessing need and appropriateness of technology. They create innovations in ‘technological design’ as well as in the ‘delivery platforms’ to include practices for ‘accompaniment’, ‘sustainable maintenance’ and ‘generation of knowledge'. Thus, they make-up for sluggish or missing markets and informational asymmetries to ensure sustained use of toilets.     

Differentiation of innovation strategies based on pharmaceutical licensing agreements: Insight from Korean pharmaceutical firms

The paper aims to show how licensing behaviour can be used to differentiate distinct innovation strategies. Information on in-licensing and out-licensing agreements is used to guide the development of a framework that details the licensing firm’s relational preference for internal and external orientation. Using firm-level data of the Korean pharmaceutical firms, the study categorised the distinct strategic orientations of firms based on the proposed matrix model. The results indicated that firms with higher R&D (research and development) expenditures have a tendency to greater external exploitation of technological knowledge than firms with low R&D spending. The study provides potential avenues for targeting of licensing partners from the perspective of firms seeking to in-license or out-license their innovations.     

Spatial Metrics of the Technological Transfer: Analysis and Strategic Management

The Triple Helix thesis states that research laboratories and universities can play an enhanced role in innovation in increasingly knowledge-based societies. In fact the locus of industrial innovation is shifting towards networks focused on technological transfer from public research laboratories to firms. This scenario presents challenges for investigating the new behaviour of research laboratories and the measurement and evaluation of their scientific and technological activity. This study analyses how the variable ‘space’ affects an important activity carried out within these laboratories: the technological transfer. The purpose of this research is to: (1) construct indicators, called sensors, starting from the geographical neo-classical approach based on physical distance, for measuring and studying the spatial dynamics of technological transfer;(2) apply the metrics to case studies using data from three institutes of the Italian National Council of Research operating in an industrialised region in the north-west Italy. The sensors are useful for understanding the spatial behaviour both of the technological transfer process, and the strategy of research laboratories. Some management implications conclude the research.     

Functions of innovation systems: A new approach for analysing technological change

The central idea of this paper is that innovation systems are a very important determinant of technological change. We describe that the emergence of a new innovation system and changes in existing innovation systems co-evolve with the process of technological change. Therefore, it is necessary to create more insight in the dynamics of innovation systems. Traditional methods of innovation system analysis that mainly focus on the structure of innovation systems have proven to be insufficient. Therefore, we propose a framework that focuses on a number of processes that are highly important for well performing innovation systems. These processes are labeled as ‘functions of innovation systems’. After explaining this framework and embedding it in existing literature, we propose a method for systematically mapping those processes taking place in innovation systems and resulting in technological change. This method can be characterized as a process analysis or history event analysis. Clarifying examples are taken from the empirical field of Sustainable Technology Development.