Innovation and Institutions

Innovation and Institutions

A Multidisciplinary Review of the Study of Innovation Systems

New Horizons in the Economics of Innovation series

Edited by Steven Casper and Frans van Waarden

Innovation and Institutions is an extensive elaboration on the make up of systems of innovation. It examines why some countries are more innovative than others, why national styles of innovation differ, and goes on to explore why some countries make radical innovations but fail to successfully market them, whilst others making incremental innovations have more commercial success.

Chapter 1: Introduction: scanning literature on institutions, organizations and innovation

Steven Casper and Frans van Waarden

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


Steven Casper and Frans van Waarden 1 DIFFERENCES IN NATIONAL INNOVATIVE PERFORMANCE Countries differ in their innovative performance. Porter (1990) has shown that commercial innovative activity is not spread evenly across nations. But countries differ also in other indicators of innovative output: number of patents registered, new products and processes developed, new firms founded in new promising sectors, successful marketing and commercialization, and their trade balance in high-tech products. Countries differ not only in how much they innovate, but also in what they innovate in. Each country seems to have its own specific innovation profile. Figures 1.1 and 1.2 present patent data on industry specialization for the years 1983–84 and 1993–94 from the European Patent Office (EPO) for Germany and the United States. These data reveal that Germany has tended to specialize in well-established but relatively complex products, involving intricate production processes and after-sales services, with close, long-term customer links. These include most engineering and process-oriented industries (machine tools, engineering elements, engines, materials processing, and so forth). Germany does not patent extensively in most of the newer, more radically innovative technologies, such as biotechnology, telecommunications or information technology. Firms located in the United States, by contrast, have developed an almost inversely related patenting profile, specializing primarily in a range of high-tech industries characterized by radical innovation (biotechnology, information technology, telecommunications) but not in the spectrum of process and engineering industries dominated by German firms. Most Northern European economies, with the exception of the UK and France, have patent...