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Innovation in Low-Tech Firms and Industries

Innovation in Low-Tech Firms and Industries

Industrial Dynamics, Entrepreneurship and Innovation series

Edited by Hartmut Hirsch-Kreinsen and David Jacobson

It is a general understanding that the advanced economies are currently undergoing a fundamental transformation into knowledge-based societies. There is a firm belief that this is based on the development of high-tech industries. Correspondingly, in this scenario low-tech sectors appear to be less important. A critique of this widely held belief is the starting point of this book. It is often overlooked that many of the current innovation activities are linked to developments inside the realm of low-tech. Thus the general objective of the book is to contribute to a discussion concerning the relevance of low-tech industries for industrial innovativeness in the emerging knowledge economy.

Chapter 5: Critical Comments on the ‘Moral Economy of Technology Indicators’

Hariolf Grupp

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


Hariolf Grupp It is always good practice to look at definitions and conventions of terms which have become common today from a historical perspective. Godin in this volume points out several misconceptions of technology indicators which have emerged in the course of time. From Schumpeter’s basic idea of ‘quasi-rents’ up to today’s convention in the OECD countries, the meaning of product, process, marketing and organizational innovation has been developed in various ways, but basically along Schumpeter’s lines of thought (Schumpeter, [1964] 1911). To be more specific, those innovative products or services that need a great amount of research and development (R&D), the so-called ‘R&D-intensive’ products or services, are often described as ‘high technology’, which is meant to be synonymous. In Chapter 4 Godin criticizes the use of the term ‘high technology’ on the basis of his observation of historical misuse. The underlying concept uses R&D intensity as the sole criterion for innovative activities, which is narrower than Schumpeter’s definition, and is outdated in modern models and statistical descriptions. Nevertheless, this dated perception that ‘high’ means ‘better’ is still very powerful in the policy arena. That is reason enough to tackle it, as Godin does. In his contribution, Godin reviews this history of ‘high technology’ which he has published already in several earlier papers on similar issues. Nevertheless, his section on the moral dimension of what ‘high’ means is new, but comparably simple and short. This critical comment starts from modern heuristic models of innovation...

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