Sectoral Systems of Innovation: Concepts, Issues and Analyses of Six Major Sectors in Europe

Cover......Page 1
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Contents......Page 7
Figures......Page 11
Tables......Page 12
Contributors......Page 14
Acknowledgements......Page 17
Introduction......Page 19
Part I Sectoral systems: concepts and issues......Page 25
1 Introduction......Page 27
2 Antecedents and theoretical bases......Page 29
3 Sectoral systems of innovation and production: a proposed definition and a framework......Page 34
4 The building blocks of a sectoral system of innovation......Page 35
4.1 Knowledge, learning processes and technologies......Page 36
4.2 Actors and networks......Page 42
4.3 Institutions......Page 45
4.4 Demand......Page 46
5.1 The dynamics of sectoral systems through processes of selection and variety generation......Page 47
5.2 Coevolution and the transformation of sectoral systems......Page 48
6 The regional and national dimensions......Page 51
7 The next chapters......Page 53
REFERENCES......Page 54
1 Introduction......Page 60
2.1 Structural changes......Page 62
2.2 Structural decomposition of patent share dynamics......Page 68
3.1 Pharmaceuticals and biotechnology......Page 72
3.2 Chemicals......Page 77
3.3 Telecommunications......Page 78
3.4 Machinery and equipment......Page 80
4 Structural changes and national trajectories in an “innovation system perspective”......Page 81
5 Conclusions......Page 83
Appendix......Page 85
REFERENCES......Page 86
Part II Six sectoral systems......Page 89
1 Introduction......Page 91
2 Innovation and the evolution of the sectoral system of innovation in the pharmaceutical industry: an overview......Page 94
2.1 The early stages of the pharmaceutical industry......Page 95
2.2.1 The organization of research and development and the patterns of competition......Page 96
2.3.1 Biomedical research: funding and organization......Page 100
2.3.2 Procedures for product approval......Page 102
2.3.3 Demand growth, the development of healthcare systems and regulation......Page 104
3.1 The scientific revolution and the new learning regime......Page 107
3.2 From the learning regime to the organization of innovative activities within and across firms......Page 109
3.2.1 New biotechnology firms......Page 110
3.2.2 The adoption of molecular biology by established companies......Page 112
3.2.3 The network of collaborative relations......Page 114
3.2.4 The other face of the division of labor: mergers and acquisitions......Page 116
3.3.1 Industry-university relations, appropriability conditions and venture capital......Page 118
3.4.1 Cost containment......Page 122
3.5 The decline of European competitiveness......Page 125
4 Conclusions: linking the empirical evidence to theory......Page 128
REFERENCES......Page 134
1 Introduction......Page 139
2.1 The industry structure and corporate strategies......Page 140
2.2 Sectoral innovative patterns......Page 143
3 The geography of the chemical sectoral system and international performance......Page 147
4.1 Industry dynamics: the evolution of network formation......Page 149
4.2 Coevolutionary processes: the case of environmental technologies......Page 151
5 The knowledge base and learning processes: knowledge generation......Page 153
6.1 Separability and transferability as factors fostering technology transactions......Page 160
6.2 Evidence on the existence of markets for technological knowledge......Page 162
6.3 Licensing strategies by large companies......Page 165
7 Conclusions......Page 168
Appendix – The networks of inventors: data description......Page 169
REFERENCES......Page 170
1 Introduction......Page 173
2.1 Introduction......Page 175
2.2 Functions and organizations in the system(s) and relations between them......Page 176
2.3.1 The fixed Internet......Page 179
2.3.2 Mobile telecommunications......Page 185
2.3.3 Satellite communications......Page 197
2.3.4 Rate structures and levels......Page 198
2.4 Boundaries between systems and convergence between subsystems......Page 200
3.1 The fixed Internet......Page 202
3.2 Mobile telecommunications......Page 203
3.3 The future of the sectoral system and relations between Europe, the United States and Japan......Page 206
3.4 The three most important policy issues......Page 208
REFERENCES......Page 209
1 Introduction......Page 211
1.1 Software as an economic commodity......Page 212
1.2 The division of labor in software creation......Page 218
1.3 The design and use of software......Page 221
2 Creating software: for profit, out of necessity and for fun......Page 225
2.1 The global software product company......Page 227
2.2 The alternative: out of necessity and for fun......Page 231
2.3 The middle ground: middleware......Page 233
3.1 The character of technological change in software......Page 237
3.2 Embedded software: the potential for concentration in innovation activities......Page 241
3.3 The impetus of network computing for software innovation......Page 242
3.4 The user interface as an impetus to innovation......Page 245
3.5 Summary......Page 247
4 Making it pay: models for software commercialization......Page 248
4.1 Adoption externalities revisited......Page 249
4.2 The old and new software distribution channels......Page 251
4.3 The open-source software movement: combining networks for production and distribution......Page 253
5 Conclusions: public and private strategies for the future of the European software industry......Page 256
REFERENCES......Page 259
1 Introduction......Page 261
2 Economic and structural trends in the sector......Page 263
3.1 The structure of the German machine tool industry......Page 271
3.2.1 Sector organization: actors and institutions......Page 272
3.2.2 User-supplier relationships......Page 273
3.3.1 The Fraunhofer Manufacturing Innovation Survey......Page 274
3.3.2 The example of knowledge and learning processes......Page 276
3.4 Technological trends and their impact on the sectoral system: the example of mobile fuel cells......Page 280
3.4.1 Technological changes and manufacturing changes......Page 281
3.4.2 Uncertainty and high risks: new challenges for traditional structures......Page 283
4.1 The structure of the Italian machine tool industry......Page 285
4.2 Specialization strategies and developments in innovation leadership......Page 286
5.1 The structure of the Japanese machine tool industry......Page 289
5.2 Small but international: the case of Hitachi Seiki......Page 290
6.1 The structure and development of the US machine tool industry......Page 293
6.2 Technological and organizational innovation capability......Page 295
7 Conclusions......Page 297
REFERENCE......Page 303
1 Introduction......Page 305
2 Services: what are they?......Page 307
2.1 Innovation in services: some attempts at a taxonomy......Page 312
3 Services and sectoral systems of innovation......Page 315
3.1 Airports and the creation of runway capacity......Page 317
3.1.1 Co-production, institutions and the distributed process of capacity assessment......Page 318
3.1.2 Learning by cooperating and the significance of procedural change......Page 319
3.1.3 Changing sources of knowledge for innovation and evolving “system” Boundaries......Page 320
3.2 Healthcare and the case of intra-ocular lenses......Page 322
3.3 Retailing and the transformation of distribution......Page 325
4.1 Knowledge bases and learning processes......Page 329
4.2 Firms, non-firm organizations and networks......Page 330
4.4 Demand......Page 332
4.5 The geographical boundaries and international performance comparisons......Page 333
5 Innovation systems as problem- or opportunity-centered and contingent......Page 334
REFERENCE......Page 337
Part III Sectoral systems and national systems; international performance and public policy......Page 341
1 Introduction......Page 343
2.1 The double nature and dimension of institutions......Page 344
2.2 The market as a central institution and the need for complementary institutional arrangements......Page 346
2.3 Types and structure of institutions......Page 347
3 For innovation, what are the relevant “national” institutions?......Page 349
3.1 The “knowledge base,” modes of appropriability and intellectual property rights regimes......Page 350
3.2 Education, industrial relations systems and labor markets......Page 353
3.3 “Banking” versus “financial market” systems: corporate governance and the financing of innovation......Page 355
4.1 “Institutional complementarities” and their role......Page 357
4.2 OII versus POE: two contrasted “ideal types” and their sectoral relevance......Page 358
5 Conclusions......Page 362
REFERENCE......Page 363
1 Introduction......Page 366
2 Varieties of capitalism and patterns of innovation......Page 367
3 Case studies: patterns of subsector specialization in European high technology......Page 376
3.1 Germany’s engagement with the “new economy”......Page 378
3.1.1 From sector to subsector systems of innovation......Page 381
3.1.2 Subsector specialization by German “new economy” firms......Page 383
3.1.3 German institutions and the orchestration of competencies within firms......Page 385
3.1.4 Constraint-based explanations......Page 386
3.1.5 Sources of comparative institutional advantage......Page 387
3.2 The surprising performance of the Swedish Internet software sectoral systems......Page 389
3.3 The disappointing performance of the biotechnology sectoral system in the United Kingdom......Page 393
4 Conclusions and implications for policy......Page 399
REFERENCE......Page 402
1 Introduction......Page 406
2 Sectoral systems and industrial leadership......Page 407
3.1.1 The knowledge and technological domain......Page 409
3.1.2 Education, scientific and technological research, university-industry relations and technological transfer......Page 410
3.1.3 Intellectual property rights protection and price and approval regulations......Page 411
3.1.4 Firms and venture capital......Page 413
3.1.5 Performance......Page 414
3.2.1 The knowledge and technological domain......Page 415
3.2.2 Actors, networks and institutions......Page 416
3.2.3 Summing-up......Page 417
3.3.1 The United States and Europe: different technological trajectories......Page 418
3.3.2 Regulations and standards......Page 419
3.3.3 Summing-up......Page 421
3.4.1 The characteristics of the packaged software industry......Page 422
3.4.2 Packaged software: US industrial leadership and European opportunities......Page 423
3.4.3 Exploring European specialization: integrated software solutions, multimedia software, open-source software and embedded software......Page 425
3.5 Machine tools......Page 428
3.6 Three service activities: airports, a remedy for cataracts, and retailing......Page 432
4.2 Technological and scientific research capabilities......Page 434
4.5 Technology and innovation policies......Page 435
5.1 Product range, product differentiation and non-price competitiveness......Page 436
5.2 Stages in industry life cycle and the role of science......Page 438
6 Conclusions, with a controversial point......Page 439
REFERENCE......Page 441
1 Introduction......Page 445
2.1 The rationale......Page 447
2.2 Selectivity in innovation policy......Page 451
2.4 General policy issues in the systems of innovation approach......Page 452
3 From systems of innovation to sectoral systems: general public policy considerations......Page 457
3.1 A sectoral system approach provides a new methodology for the study of sectors and, therefore, for the identification of the variables that should be the policy targets......Page 459
3.2 The impact of general or horizontal policies may differ drastically across sectors......Page 460
3.4 For fostering innovation and diffusion in a sector, not just technology and innovation policies but a wide range of other policies may be relevant......Page 461
3.6 Policy should consider the different geographical dimensions of sectoral systems......Page 462
4.1 Policies in periods of radical technological change......Page 463
4.2.1 Policies in services......Page 465
4.2.2 Policies in software......Page 467
4.2.3 Innovation policy in the Internet and mobile telecommunications......Page 469
4.2.4 Technology policy in chemicals......Page 474
5 Conclusions......Page 476
REFERENCE......Page 477
Part IV Conclusions......Page 481
1 Introduction......Page 483
2 A characterization of the various sectoral systems......Page 484
3.1 The knowledge at the base of innovative activities has changed over time and has affected the boundaries and structure of sectoral systems......Page 485
3.2 Actors and networks are highly affected by the characteristics of and changes in the knowledge base and differ greatly across sectoral systems......Page 489
3.2.1 Pharmaceuticals and biotechnology: the division of innovative labor and networks among firms and non-firm organizations......Page 490
3.2.2 Chemicals: large multinational firms and a vertical division of labor......Page 491
3.2.3 Telecommunications equipment and services: the coexistence of large integrated actors and of small actors specialized in segments or niches......Page 492
3.2.4 Software: the specialization of global players and local producers alike......Page 493
3.3 The role of national as well as sectoral institutions is relevant for innovation......Page 494
4 The coexistence of the local, national and global dimensions......Page 497
5 Coevolutionary processes in sectoral systems......Page 499
6 A note on sectoral systems in services......Page 503
7.1 Pharmaceuticals and biotechnology: major inter-country differences and the dominance of the US model......Page 506
7.1.2 Biotechnology in Europe: the emergence of specialization in product groups......Page 507
7.2 Telecommunications: international performance in global as well as local systems......Page 509
7.2.2 The modification of the features of the Scandinavian model in telecommunications......Page 510
7.3 Chemicals: large multinational firms in global markets......Page 511
7.4.1 Packaged software......Page 512
7.4.2 Custom, open-source and embedded software......Page 513
7.4.3 German specialization in specific product groups, such as enterprise resource planning......Page 514
7.5 Machine tools: the international performance of different systems with different specialization......Page 515
7.6.1 Technological and scientific research capabilities......Page 516
7.6.4 The stage in the industry life cycle and the role of science......Page 517
8 Policy implications......Page 518
9 The challenges ahead......Page 521
REFERENCES......Page 522
Index......Page 526