Innovation, Growth and Social Cohesion

Innovation, Growth and Social Cohesion

The Danish Model

New Horizons in the Economics of Innovation series

Bengt-Åke Lundvall

Written by the scholar who, together with Chris Freeman, first introduced the concept of the innovation system, this book brings the literature an important step forward. Based upon extraordinarily rich empirical material, it shows how and why competence building and innovation are crucial for economic growth and competitiveness in the current era. It also provides a case study of a small, very successful European economy combining wealth creation with social cohesion.

Chapter 2: The Objective: To Stimulate a Knowledge-based Debate about Innovation Policy

Bengt-Åke Lundvall

Subjects: economics and finance, economics of innovation, innovation and technology, economics of innovation, innovation policy


2. Innovation Innovation takes place when a firm develops a new production process, a new product or a new service and introduces it in the market or into production. The first firm to come out with new developments is a true innovator, while those who implement new developments later can be called imitators. In the real world, the difference between innovation and imitation is not very clearly defined. It is not always easy to copy what others have developed, and often an adaptation takes place so that the innovation fits into the new context. A great deal of the research and development efforts that take place in firms aim toward absorbing new technology and new knowledge that has been developed by others (Cohen and Levinthal 1990). It is correspondingly difficult to differentiate clearly between innovation and its dissemination. The dissemination of an innovation to a greater number of users is simultaneously a process through which the original innovation is improved, made cheaper and made usable across a broader area. That is why we allow the term ‘innovation’ to stand for a process that involves both the original new development, its introduction to the market and, as well, its further distribution and use. INNOVATION AS PART OF DAILY LIFE IN DANISH FIRMS With this broad definition, innovation is something that forces itself upon every firm that is exposed to competition. In most sectors, it is necessary to develop new products, implement new process techniques and organizational forms and to search out...

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