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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 12: Low-tech Industries between Traded and Untraded Interdependencies: A Dynamic Concept of Industrial Complementarities

Edited by Hartmut Hirsch-Kreinsen and David Jacobson

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

Extract

Martin Heidenreich INTRODUCTION The current debate on low-tech innovation patterns develops from criticisms of ‘high-tech myopia,’ the idea that economic growth and employment is mostly the result of research-intensive industries (Hirsch-Kreinsen et al., 2005a; Von Tunzelmann and Acha, 2005). This kind of critique is particularly present in the discussion of public research and technology policies. Rightly, one is reminded of the importance of medium- and low-technology industries for growth, employment and innovations. It is emphasized that ‘Learning and innovation can take place without research and development (R&D), for example through acquisition of tacit and practical knowledge, and through formal and informal diffusion between firms’ (Jacobson and Heanue, 2005: 315). Technological upgrades, better designs or customerspecific applications or, on a more general level, learning-by-interacting and practical, experience-based, often implicit knowledge is considered to be an essential source of innovation especially for low- and medium-technology industries (LMT).1 LMT industries therefore are considered to be an integral part of advanced industrial regions (Robertson and Patel, 2007). Their specific innovative behaviour (focus on process innovation, design and marketing, weak internal R&D and engineering capabilities, external acquisition of knowledge; see Heidenreich, 2008) is complementary to other knowledgeintensive industries and services. These complementarities between companies with a different technological basis are at the core of Pavitt’s taxonomy of different patterns of technological change. LMT companies are analysed as supplier-dominated firms2 which rely on the capabilities of 221 222 Local versus global perspectives in innovation external technology suppliers...

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