por: carlos chambel miguel leocádio joão meyer

SECTORAL PATTERNS OF TECHNICAL CHANGE:TOWARDS A TAXONOMY AND A THEORY


M. Sc. Engineering Policy and Technology Management Innovation and Knowledge Management

Por:Carlos ChambelMiguel Leocádio

João Meyer

SECTORAL PATTERNS OF TECHNICAL CHANGESECTORAL PATTERNS OF TECHNICAL CHANGESECTORAL PATTERNS OF TECHNICAL CHANGESECTORAL PATTERNS OF TECHNICAL CHANGE




SummarySummary:

1. Sectoral Patterns of Innovation

2. Towards a Taxonomy and a Theory

3. Some Analytical Implications

4. Future Perspectives




Purpose: The similarities and diferences amongst sectors in thesources, nature and impact of innovations, defined by the sources of knowledge imputs, by the sizeand principal lines of activity of inovating firms, and by the sectors of Innovations’ production and main use.

The Data Base: Data collected by Townsend et al. on the characteristicsof about 2000 significant innovations, and of innovating Firms, in Britain from 1945 to 1979.




Sectoral patterns of innovationSectoral patterns of innovation

Institutional sources of main knowledge inputs

• 7% from the public technological infrastructure (higher education, government laboratories, and research associations)

• 59% from within the innovating firms themselves

• 34% from other firms

Number of observations: 3013

AnalysisAnalysis

Number of sources appointed ~ 1,5

Underestimate the contribution made by public technology infrastructure

Industrial R & D total expenditures: ¾ on D

Innovation vs. Development: the costs of transfer can be high





Sectoral patterns of production and use of innovations

Product innovations: those innovations that are used outside their sector of production

Process innovations: those innovations that are used inside their sector of production

Product innovations ~ 70%

Ratio of production to use of technology:5.3 to 1 for manufacturing as a whole

0.1 to 1 for outside manufacturing






Instruments, Mechanical Engineering,

Chemicals, Building Materials (mainly

glass and cement and electrical and

electronical engineering

Innovations produced

in the sector:

Innovations used

in the sector:

Product Innovations Process Innovations

Leather and footwear, textiles,

vehicles, metal manufacture,

shipbuilding and food and drink

All sectors of manufacturing

except textilesTextiles

Main Sectors






Building materials, metal

manufacture and food and drink

(Caracterized by assembly

operations) Shipbuilding and vehicles

Production > Use

Production Use

Production < Use

Instruments, mechanical engineering,

chemicals and electrical and

electronical engineering

(Caracterized by continuous

process technology)

(Mainly process industries)

InnovationsInnovations

Note





Caracteristics of innovating firms: Size and technological diversification

• Big contribution of small firms (1 - 999 employees) in mechanical and instrument engineering, textiles, and leather and footwear.• Big contribution of large firms (10,000 and more employees) in other sectors.

According to the sector of the innovations:

According to the principal sector of the innovating firms´ activity:

• In sectors where large firms predominate, the two size distributions are very similar.• In mechanical and instrument engineering, and in textiles, both the number of innovations and the relative contribution of large firms are bigger when classified by sector of innovation, than when classified by the principal sector of activity of the innovating firm.

A relatively large number of innovations are produced in these sectors by relatively large firmswith their principal activities in other sectors. Continuous process and assembly industries




The ingredients

Knowledge applied by firms is not general purpose and easily transmitted and reproduced

Technical change is a cumulative process to firms what they can try to do in future is strongly conditioned by what they have been able to do in the past

Variety – sectors vary in the relative importance of product and process innovations, in sources of process technology, in size of technological diversification of innovating firms

Appropriate for specific applications and appropriated

for specific firms

Technical change comes mainly from suppliers of equipment

Firms and assembly and continuous process industries tend to concentrate their innovative resourses on process innovations

Some regularities begin to change

Try to categorise and explain the caracteristics:to propose a taxonomy and a teory




Supplier dominated firmsSupplier dominated firms Traditional sectors of manufacturing, agriculture, wood & paper, housebuilding, many

financial and commercial services

They are generally small and their in-house R&D and engineering capabilities are weak

Make a minor contribution to their process or product technology high proportion of proccess innovation produced by other sectors

Most innovations come from suppliers of eqp and materials

Uma grande parte dos processos inovadores usados é originada em outros sectores




Production intensive firms Large scale fabrication & assembly production

Improved transportation, simplification of production tasks

Unit capacity costs can (potentially) decreased 1% by every 3% in plant capacity

Fabrication & assembly machines take progressively more complex and more demanding tasks

Continuous processes increased scale & high temperatures have resulted from improvements in materials, control instrumentation and power sources

Complex and interdependent production systems with external costs of failure in any part very considerable trouble-shooting and process engineering have been established bottlenecks corrected improvements in productivity

Departamentos de engenharia de produção constituem uma grande fonte de inovação nas empresas de produção intensiva




Science based firms Found in chemical and electronic / electrical sectors

Main sources of technology are R&D activities in the sectors

Products depended on prior development of basic science (ex:synthetic chemistry, biochemistry, electromagnetism, radio waves, solid state physics, etc)

It has been difficult for firms outside the sectors to enter them

Firms appropriate their innovating leads through a mix of methods (patents, secrecy, natural technical lags, firm specific skills)

Whose trade is not to do anything, but to observe

everything

As Science based firms têm uma grande contribuição para a inovação: na indústria química encontram-se valores de 40% na electrónica/produtos eléctricos há uma contribuição de cerca de 50% na engenharia mecânica os valores baixam para 20%




Specialised equipment suppliers

Science basedfirms

Scale intensive

firms

Supplier dominated

firms

Technological linkages and changing trajectories

Power tools, transport equipmentConsumer electronics, plastics

Plastics & electronics for car industry




Demand Pull with stronger influence on innovative activity

Strong association between volume of innovative activity (patents) and investment activity in user industries, rather than in the output of the supplier industries.

Schmookler:(66)

Investment both in Supplier Dominated and Production Intensive firms stimulate innovative activity No surprise! Planning of investment and co-ordination with production

Pavitt:(84)

Implications of proposed theoryImplications of proposed theoryScience and Technology push vs Demand Pull




Implications of Proposed TheoryImplications of Proposed TheoryProduct vs Process innovation

High proportion of Science-based firms (Also important in other sectors, like specialized suppliers: mechanical and instrument engineering)

Important Product Innovation:

-Positively associated with Patent intensity and R&D

-Negatively associated with scale and complexity of process technology

Product Innovation

Production intensive sectors is expected both high proportion of resources in process innovation and high capital intensities, size of plant and industrial concentration

Process Innovation




Supplier-dominated sectors: firms and production plant small in size; innovations coming from suppliers

Production intensive firms: large in size; process technology generated in-house

Positive relation: proportion of a sector’s process technology generated in-house and size of plant or firm in sector

Upstream equipment suppliers become important source of process innovation with increasing size of market for production process equipment

Reflects greater division of labor in production

Implications of Proposed TheoryImplications of Proposed TheoryThe locus of process innovation




Production intensive firms: diversify less in production than in technology. Textiles on the other hand diversify more in production than in technology Non technical complementarities with other sectors

Supplier-dominated sectors: Upstream technological diversification into sectors supplying equipment :

-Negatively associated with R&D intensity

-Positively associated with scale and complexity of production technology (innovation activities on production techniques and upstream equipment)

The proposed model, identifies technological trajectories of firms as a function of their principal activities Prediction of possible paths of technological diversification

Uncertain results of research are likely to give better results in a diversified firm

Implications of Proposed TheoryImplications of Proposed TheoryDiversification




Implications of Proposed TheoryImplications of Proposed TheoryFirm size and industrial structure

Supplier-dominated sectors: increase in size is usually not attributed to innovation, although might enable more efficient process technology

Production intensive firms: innovation associated with large and increasing size

Uncertain results of research creates tendencies for concentration of both production and innovative activities




Future PerspectivesFuture Perspectives

Proposed taxonomy needs to be tested

• On the basis of complete sectoral coverage

• Accumulated case studies

• Data of innovative activity becoming available (patents offices)

Proposed taxonomy needs to be modified and extended

• Exploitation of natural resources included in production intensive...

May be used in future by policy makers and analists

• Relative contribution of small and large firms to innovation

• Technical change; the directions of innovative activities

Conceptualization : most generalizations are likely to be wrong

por: carlos chambel miguel leocádio joão meyer

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