The Theory and Practice of Innovation Policy
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The Theory and Practice of Innovation Policy

An International Research Handbook

Edited by Ruud E. Smits, Stefan Kuhlmann and Phillip Shapira

This comprehensive Handbook explores the interactions between the practice, policy, and theory of innovation. The goal is twofold: to increase insight into this dynamic process, searching for options to improve the effectiveness and efficiency of both policy and innovative practice, and to identify conceptual or empirical lacunae and questions that can guide future research. The Handbook is a joint project from 24 prominent scholars in the field, and although each chapter reveals the insights of its respective authors, two overarching theoretical perspectives provide unique coherence and consistency throughout.
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Chapter 3: The Changing Role of the Firm

Ben Dankbaar and Geert Vissers


Ben Dankbaar and Geert Vissers INTRODUCTION Since the industrial revolution, capitalism has been characterized by technological change at a speed and breadth incomparable to any other period in the history of mankind. Inventions had been made in earlier periods too, but it was only in capitalist economies that inventions were actively sought and implemented by capitalists competing for markets and profits. It was the first time in history that human inventiveness was employed in a social order that allowed almost unlimited freedom for individuals to introduce new products and new methods without having to ask for permission from anyone. Therefore, the history of technological change in capitalism is not so much a story of scientists, inventors and laboratories; it is a story of firms and entrepreneurs. The firm is the place where decisions are made, initiatives are taken and inventiveness is turned into real products sold for profit. Karl Marx (Marx & Engels 1848; Marx 1867) was one of the first to point to capitalists, the bourgeoisie, as the driving force behind the development of the forces of production, as he called it. His insights were echoed half a century later in Joseph Schum peter's doctoral thesis (1911) that is often quoted as the first major work on innovation in modern economics. Today, a century later, the firm is still the central actor and place of decision making in processes of innovation, but there have been important changes in the way this role is being played. Innovation, like so many other...

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