Innovation and Institutions
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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.
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Chapter 6: Innovation strategies, interactive learning and innovation networks

Marius Meeus and Leon Oerlemans

Extract

6. Innovation strategies, interactive learning and innovation networks Marius Meeus and Leon Oerlemans 1 1.1 INNOVATION STRATEGIES OF FIRMS Introduction Technological competition and innovation confronts firms with the innovator’s dilemma (Christensen 1997). Basically this dilemma is a variant of the flexibility-stability dilemma, which revolves around the question: how do firms reconcile the need for persistence in the pursuit of organizational goals and the need for change in the pursuit of organizational survival? How are environmental pressures translated into strategic action, and do institutional arrangements like networks play a role in this? Innovation is a trade-off between competing risks; the risk of changing products, processes and routines threatening the reliability and accountability of organizations and the risk of organizational decline or even death due to a lack of change. Innovation processes in organizations appear to have both effects. On the one hand empirical research revealed that innovation enhances the growth and survival of firms. Innovation does contribute substantially to organizational survival by offering new growth opportunities (Brouwer and Kleinknecht 1994; Archibugi and Pianta 1996; Audretsch 1995: Lawless and Anderson 1996; Metcalfe, 1995). On the other hand innovation is a very complex and risky process, with low success rates and sometimes lethal effects. Innovations potentially disrupt and reform the organizational fabric, often in a fairly unpredictable and situation-specific way (Zammuto and O’Connor 1991; Dean and Snell 1991; Lundvall 1992; Leonard-Barton 1988; Dougherty and Hardy 1996). One study revealed lethal effects of innovation (Barnett and Carroll 1987; Barnett and Burgelman 1996). Due to...

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