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  • 8/18/2019 Archibugi Pianta 1996

    1/19

    ELSEVIER

    ADVANCED

    FFCHNOL.(X] Y

    Technovat ion , 16(9) (1996) 451-468

    Co p y r i g h t © 1 9 96 E l s e v i e r Sc i e n c e L t d

    Pr in ted in Great Br i t a in . Al l r igh t s reserved

    0166-4972/96 $15 .00 + 0 .00

    M e a s u r in g t e c h n o lo g ic a l

    t h r o u g h p a t e n t s a n d in n o v a t io n

    s u r v e y s

    D a n i e l e A r c h i b u g i a n d M a r i o P i a n t a

    Inst itu te for Studi e s on Sc i ent if i c Research Nat i onal Research Counc i l Vi a Cesare De

    L o l l i s 1 2 0 0 1 8 5 R o m e I t al y

    b s t r a c t

    T hi s ar ti c l e prov i des an overv i ew o f r ecen t r e search us i ng i nnova t i on surveys

    and pa t en t d a t a as i nd i ca t or s o f t echno l og i ca l ac ti vi ty . T he concep t ua l and

    met hodol og i ca l prob l ems o f measur i ng t echno l ogy are d i scussed , w i t h a

    c l as si f ica t ion o f t he t ypes o f i n format i on w hi ch can be drawn from pa t en t

    da t abases a nd f rom surveys o f bo t h i nnova t ions an d t he i nnova t i ve e ff or ts o f

    f i rms.

    T he f i nd i ngs a nd t he me t hodo l og i ca l s t r eng t hs and weaknesses o f such

    studies are reviewed, considering f i rs t the evidence at the f i rm level , seco nd

    the analys is o f the industr ial s t ructure an d f inal ly the evidence at the countr3

    l eve l and t he process o f g l oba li za ti on . T he overv i ew show s t ha t r i ch and

    impo rtant evidenc e on the techn ologica l act iv i t ies of f i rms i s of fered by these

    i nd ica t or s. A su mm ary o f new depar t ures f or r e search based o n i nnova t i on

    and pa t en t da t a conc l udes t he paper . Copyr i gh t © 1996 E l sev i e r Sc ience L t d

    1. INTRODU TION

    The measurement of technological change is of

    increasing importance for business, research, and pol-

    icy. Within firms, detailed information about techno-

    logical advance is needed to take the right decisions

    concerning the amount of resources to devote to inno-

    vation, to select the fields where innovation promises

    economic returns and to manage innovative strategies

    within companies.

    However, measuring technological change is a

    particularly demanding task. In industry, innovation

    depends on a variety of activities ranging from for-

    malized R&D to production engineering. It has been

    stressed that innovation is not a linear process going

    from R&D activities to the eventual commercializ-

    ation of products. On the contrary, the elements of

    innovation interact throughout the various stages to

    weave a complex web of relationships (OECD,

    1991, 1992b).

    Three main aspects of industrial innovation deserve

    to be mentioned. First, technological change impinges

    on codified and tacit knowledge. Second, the sources

    of innovation may be either internal or external to the

    firm. Third, innovations can either be embodied in

    capital goods and products or disembodied, i.e. the

    know-how included in patents, licences, design,

    R&D activities, or embodied in skil led personnel.

    These aspects already indicate the complex and

    heterogeneous nature of technological change. They

    show why it is difficult to find measures that provide

    a satisfactory account of the dimension, intensity, rate

    and direction of innovative activity. This article

    S 1 6 6 - 4 9 T 2 K ) O 0 0 3 1 4 T e c h n o v a t io n o l .1 6 N o . 9 4 5 ] ,

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    D A r c h i b u g i n d M P i a n t a

    reviews recent developments on the measurement of

    technological change by means of patent data and

    indicators derived from innovation surveys.

    Two main issues need to be addressed: first, the

    extent to which available indicators overlap or pro-

    vide information on different aspects of science and

    technology activities; second, the extent to which

    indicators of the same activities provide similar

    answers. These issues can be summarized by two

    questions: Which indicator answers which question?

    Do different indicators provide the same results?

    National and international governmental agencies,

    as well as private companies, have devoted a substan-

    tial amount of resources to producing information and

    statistical sources on innovation. The 'family' of

    OECD manuals provides a wide array of conceptual

    and operational tools for developing and using the

    existing technological indicators and statistical

    sources. In particular, the Patent Manual (OECD,

    1994) and the Oslo Manual on innovation surveys

    (OECD, 1992a) cover the methodological aspects and

    the state of the art in these fields. A final question

    emerging from this overview concerns the further

    development of methodological tools: What are the

    new efforts to be agreed upon in order to provide a

    common framework for expanding the information

    drawn from technology indicators?

    This overview first sets out the key concepts and

    the methodological problems of investigating innov-

    ative activities (Section 2). Next, it discusses inno-

    vation and patenting strategies of firms (Section 3)

    and the analysis of industrial structure (Section 4).

    The national level and the process of globalization are

    then discussed (Section 5). Finally, the conclusions

    bring together the evidence gathered for patent and

    innovation survey indicators; the key methodological

    problems and themes of research are reviewed in the

    light of recent developments (see OECD, 1995), and

    new directions for research are suggested (Section 6).

    This article is focused on the most recent literature.

    Previous review articles to be taken into account for

    a comprehensive view include Basberg (1987), Pavitt

    (1988) and Griliches (1990) for patenting; and Archi-

    bugi (1988), De Bresson (1990), Smith (1992a,

    1992b), and Hansen (1992) for innovation surveys.

    2 C O N C E P T S N D M E T H O D O L O G Y

    2 . 1 T w o m e t h o d s o f g a ~ e r i n g i n f o n n a S o n o n in d u s W ia l

    i n n o v a ' d o n

    Patents and innovation surveys are two ways to

    acquire information on the innovative activities of

    firms. Figure 1 presents a conceptual framework. A

    wide variety of innovative activities are carried out

    by firms that can be documented by innovation sur-

    veys and patent data. Using such empirical evidence,

    it is possible to address several issues at the levels of

    firms, industries and countries.

    Some innovation inputs have been monitored for a

    long time, notably the resources devoted to R&D,

    which have been systematically measured in most

    advanced countries for over 30 years. However,

    despite its importance, R&D is only one source of

    innovation. Other innovation inputs are not yet meas-

    ured, and some cannot be (on indicators, see Freeman,

    1987; van Raan, 1988; van Raan e t a l . 1989; Barr6

    e t a l . 1994).

    Innovative activities have a variety of visible out-

    comes. Firms invest in technology to introduce pro-

    duct and process innovations into the market. Inno-

    vation surveys can account for such efforts. In order

    to protect their products and processes against pro-

    spective competitors, firms often apply for patents for

    their innovations. The key aspects of patents and

    innovation surveys as technology indicators are

    shown in Table 1. Table 2 provides an overview of

    their strengths and weaknesses.

    Innovation can be analysed, classified and meas-

    ured from several perspectives. There are, at least,

    four different criteria for classifying innovation,

    which can be used in both patenting and innovation

    surveys (for a formal analysis, see Archibugi, 1988):

    • t e c h n o l o g y , i .e . a c c o r d i n g t o th e t e c h n i c a l c h a r a c -

    t e r is t i c s o f t h e i n n o v a t i o n ;

    • p r o d u c t , i .e . a c c o r d i n g t o t h e n a t u r e o f t h e p r o d u c t

    i n w h i c h t h e i n n o v a t i o n i s l i k e l y t o b e e m b o d i e d ;

    • s e c t o r o f p r o d u c t i o n , i . e . t h e m a i n e c o n o m i c

    a c t i v i t y o f t h e f i r m t h a t h a s g e n e r a t e d t h e i n n o -

    v a t i o n ;

    • s e c t o r o f u s e, i. e . t h e m a i n e c o n o m i c a c t iv i t y o f t h e

    u s e r s o f th e i n n o v a t i o n .

    2 . 2 l l a e n a t u r e o f p a t e n t s

    The patent system is one method firms use to pro-

    tect their inventions. For legal reasons, patents are

    systematically registered by government bodies. If

    they are duly processed, classified and organized, pat-

    ents provide a unique source of information on indus-

    trial innovation. The OECD Patent Manual provides

    guidelines for the use of patents as well as a guide to

    the patent-based literature (see also Basberg, 1987;

    Pavitt, 1988; Griliches, 1990).

    Like any other technological indicator, patents have

    advantages and disadvantages, which it is useful to

    summarize. Their advantages are:

    • They are a direct outcome of the inventive process,

    and more specifically of those inventions which are

    expected to have a commercial impact. They are a

    particularly appropriate indicator for capturing the

    proprietary and competitive dimension of techno-

    logical change.

    4 5 2 T e c h n o v a t J o no l . 6 N o . 9

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      e a s u n g t e c h n o l o g i c a l h a n g e

    I nnova t i ve c t i v f f i e s

    o f i rms

    nd ica to rs

    P r o b e m s a n d p a t t e r n s

    R D a n d

    o t h e r

    I n n o v a t i v e

    Act iv i t ies

    Product ,

    Process ,

    I n n o v a -

    t i o n s

    Patent ing

    Act iv i ty

    R e s e a r c h i s s u e s

    S o u r c e s o f

    innova t ion

    Struc ture o f

    innova t ive

    activ ities

    I m p a c t o f

    innova t ions

    F i r m s

    L e v e l s o f a n a l y s i s

    S e c t o r s C o u n t r i e s

    Fig. 1. A framework for the analysis of innovation and patenting activities.

    TABLE I. The nature of patents and innovation surveys

    Patents

    Innovation surveys

    'Object ' approach 'Subject' approach

    Unit of analysis

    Origin of the information

    Method of collecting

    information

    Periodicity

    Coverage

    Patented inventions

    Collected for legal and administrative

    purposes

    Patent office data on applications filed

    by inventors or grants. Original sources

    are often further reclassified and

    elaborated for analytical purposes

    Regular data collection

    Very up-to-date information

    Inventions for which legal protection is

    sought

    The majority of patents are granted to

    the business sector

    Sample of innovations

    Collected for analytical and/or policy

    purposes

    Collected from different sources such as

    new product announcements, expert

    surveys, innovation inventories,

    bibliometric directories

    Occasional surveys

    Samples of successful innovations

    Informs on innovations introduced by

    both the business and the non-profit

    sectors

    Main criteria of Technological Product

    classification Firm's principal economic activity Firm 's principal economic activity

    Firms

    Collected for analytical and/or policy

    purposes

    Collected at the firm level either by mail

    questionnaires or direct interviews

    Until now, occasional surveys

    Data collection is becoming periodical

    Successful and unsuccessful innovative

    activities

    Innovating and non-innovating firms

    Includes manufacturing and service

    industries

    Firm's principal economic activity

    Main user sector

    Firm size

    Source

    Authors.

    • B e c a u s e o b t a i n i n g p a te n t p r o t e c t io n i s t im e - c o n -

    s u m i n g a n d c o s t l y , i t i s l i k e l y t h a t a p p l i c a t i o n s a r e

    f i l e d f o r t h o s e i n v e n t i o n s w h i c h , o n a v e r a g e , a r e

    e x p e c t e d t o p r o v i d e b e n e f it s t h a t o u t w e i g h t h e s e

    c o s t s .

    • P a t e n t s ar e b r o k e n d o w n b y t e c h n i c a l f i e ld s a n d

    t h u s p r o v i d e i n f o r m a t i o n n o t o n l y o n t h e r a t e o f

    i n v e n t i v e a c t i v i t y , b u t a l s o o n i t s d i r e c t i o n .

    • P a t e n t s t a t i s t ic s a r e a v a i l a b l e i n l a r g e n u m b e r s a n d

    f o r a v e r y l o n g t i m e s e r i e s .

    • P a t e n t s ar e p u b l i c d o c u m e n t s . A l l i n f o r m a t i o n ,

    i n c l u d i n g p a t e n t e e s n a m e s , i s n o t c o v e r e d b y s t at -

    i s t i c a l c o n f i d e n t i a l i t y .

    T h e i r d i s a d v a n t a g e s a r e :

    • N o t a l l in v e n t i o n s a re t e c h n i c a l l y p a t e n ta b l e . T h i s

    i s t h e c a s e o f s o f t w a r e , w h i c h i s g e n e r a l l y l e g a l l y

    p r o t e c t e d b y c o p y r i g h t .

    • N o t a l l i n v e n t i o n s a re p a t e n t e d . F i r m s s o m e t i m e s

    p r o t e c t t h e i r i n n o v a t i o n s w i t h a l t e r n a t i v e m e t h o d s ,

    n o t a b l y i n d u s t r i a l s e c r e c y .

    • F i r m s h a v e a d i f f e r e n t p r o p e n s i t y to p a t e n t in t h e i r

    d o m e s t i c m a r k e t a n d i n f o r e i g n c o u n t r i e s , w h i c h

    l a r g e l y d e p e n d s o n t h e i r e x p e c t a t i o n s f o r e x p l o i t i n g

    t h e i r i n v e n t i o n s c o m m e r c i a l l y . I n e a c h n a t i o n a l p a t -

    TedmvabonVol.16 No. 9

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    D A r c h i b u g i a n d M P i a n t a

    T A B L E 2

    C o m p a r a b i l i t y , s t r e n g t h s a n d w e a k n e s s e s o f p a te n t s a n d i n n o v a t i o n s u r v e y s

    P a t e n t s

    I n n o v a t i o n s u r v e y

    ' O b j e c t '

    a p p r o a c h

    ' S ub j e c t '

    a p p r o a c h

    T i m e s e r i e s c o m p a r a b i l i t y

    I n t e r n a ti o n a l c o m p a r a b i l i t y

    C o m p a r a b i l i t y w i t h

    R & D

    C o m p a r a b i l i t y

    wi t h

    i n d u s t r i a l s t a t i s t i c s &

    n a t i o n a l a c c o u n t s

    O t h e r a d v a n t a g e s

    O t h e r d i s a d v a n t a g e s

    V e ry h i g h . P a t e n t d a t a

    h a v e b e e n

    c o l l e c t e d f o r m o r e t h a n a c e n t u r y

    H i g h , a l t h o ug h i t i s l i mi t e d by

    t h e

    n a t i o n a l n a t u r e o f p a t e n t i n s t i t u t i o n s a n d

    t h e l a r ge n u m b e r o f d o m e s t i c

    a p p l i c a t i o n s

    L o w a t f i r m a n d i n d u s t r y

    leve ls. High

    at

    c o u n t r y leve l

    Difficul t a t f i rm a n d i n d u s t r y l e v e l s d u e

    t o d i f f e r e n t s e c t o r a l c l a s s i f i c a t i o n s .

    H i g h

    a t c o u n t r y

    level

    S i n c e p a t e n t p r o t e c t io n i s c o s t l y ,

    i t i s

    l i k e l y t h a t f i r m s a p p l y f o r t h o s e

    i n v e n t i o n s w h i c h a r e l i k e l y t o p r o v i d e

    e c o n o m i c

    r e t u r n s .

    V e r y d e t a i l e d s e c t o r a l d i s a g g r e g a t i o n

    N o t a l l p a te n t s b e c o m e i n n o v a t i o n s .

    N o t a l l i n v e n t i o n s a r e p a t e n t e d .

    N o t a l l i n v e n t i o n s a r e p a t e n t a b l e .

    D i f f e r e n t p r o p e n s i t y t o p a t e n t a c r o s s

    s e c t o r s

    G e n e r a l l y h i g h w i t h i n a g i v e n s u r v e y

    L o w . A l l

    s u r v e y s a r e n a t io n a l

    i n sc o p e .

    Difficul t t o c o m p a r e t h e m b e c a u s e o f

    d i f f e r e n t sa m p l e m e t h o d a n d d e s i g n

    L o w , s i n c e R & D s u r v e y s a r e a t f i rm

    level

    a n d n o t a t i n n o v a t i o n

    level

    Lo w, be c a use i t i s d i f f ic u l t o r e v e n

    i m p o s s i b l e t o r e la t e t h e s a m p l e d

    i n n o v a t i o n t o t h e w h o l e u n i v e r s e

    D i r e c t m e a s u r e o f i n n o v a t i o n .

    P r o v i d e s i n f o r m a t i o n o n

    t e c h n o l o g i c a l

    e v o l u t i o n

    H e t e r o g e n e o u s v a l u e o f

    i n d i v i d ua l

    i n n o v a t i o n s .

    D a t a b i a s e d

    by sub j e c t i v e

    j u d g e m e n t .

    Difficul t t o a s s e ss t h e s i g n i f i c a n c e a n d

    r e p r e s e n t a t i v e n e s s o f t h e s a m p l e

    L o w ,

    u n l e s s i n f o r m a t i o n i s c o l l e c t e d

    p e r i o d i c a l l y a n d i s

    s t a n d a r d i z e d

    P o t e n t i a l l y h i g h f o r q u a n t it a t i v e d a t a if

    i d e n t i c a l q u e s t io n n a i r e s a n d m e t h o d s a r e

    u s e d

    H i g h ,

    s i n c e s u r v e y s

    m a k e i t

    p o s s i b l e a l s o

    t o c o l l e c t i n f o r m a t i o n o n i n p u t d a t a .

    B o t h i n n o v a t i o n a n d R D s u r v e y s

    c o l l e c t i n f o r m a t i o n a t fi rm leve l

    H i g h

    o n q u a n t i t a ti v e d a t a i f in n o v a t i o n

    s u r v e y s c a n b e r e l a t e d t o t h e

    e c o n o m i c

    u n i v e r s e

    P r o v i d e s i n f o r m a t i o n o n a l l i n n o v a t iv e

    ac t iv i t ies.

    W i d e c o v e r a g e o f i s s u e s .

    I n f o r m s o n b o t h p r o d u c e r s a n d u s e r s o f

    i n n o v a t i o n

    D o e s n o t in f o r m o n t h e t e c h n o l o g i c a l

    n a t u r e o f i n n o v a t i o n s .

    S i g n i f i c a n c e a n d r e p r e s e n t a t i v e n e s s o f

    r e s u l ts a r e t i e d t o r e s p o n s e r a t e a c h i e v e d

    S o u r c e :

    A u t h o r s .

    ent off ice , there are many m ore appl ications from

    domestic inventors than from fore igners .

    • Alth oug h there are international patent agreements

    among most industrial countries, each national pat-

    ent office has its own institutional characteristics,

    whic h a f fe c t the c os t s , l e ngth and e f fe c t ive ne s s o f

    the protect ion accorded. In turn , this affects the

    interest o f inventors in ap plying for patent protec-

    tion.

    Empir ical surveys suggest that a large share of

    finn s' inv entio ns are patented. Research carried out

    by M ans f i e ld (1986) on a s ample o f US f inns s howe d

    that f inns apply for a patent for about 66- 87 of the ir

    patentable inv entions . Th is does not mean that patents

    account for the same share of a l l inventions , s ince

    an unknown number of inventions are not technical ly

    patentable. St i l l , this suggests that f irms m ake u se of

    patenting for the majority of their patentable inven-

    t ions .

    A survey carried out by the European Patent Office

    (199 4, p. 108) on the patenting activity of European

    f inns w i th up to 1000 e mp loye e s found that 25 o f

    the sampled f inns f i led patent applications for more

    than 90 of the ir patentable inventions and that

    another 25 appl ied for a patent for 50- 90 of the ir

    patentable inventions. These shares tend to increase

    with the s ize of f irms . Cost and lack of advantages

    are given as reasons for not patenting an invention.

    A large-scale survey of f irms' behaviour with

    respect to innovation and appropriabi l i ty (the PACE

    survey) has recently been completed in Europe

    (Arundel e t a l . 1995) and is under way in the United

    States and Japan. The survey was d es igned as a fol -

    low- up to the Yale survey o f the 1980s (Levin

    e t a l .

    1987), and the first results broadly confirm previous

    evidence on f inns ' innovative s trategies and the re l -

    evance of patents .

    T he PACE s ur ve y o f E ur ope an f inns found that

    15 of f inns apply for patents for 80-1 00 of the ir

    product innovations , wh i le 37 patent less than 19 .

    For pr oc e s s innovat ions , on ly 7 o f f inns made

    extens iv e use of patents and 57 apply very rarely .

    T he f inns c ove r e d by the PACE s ur ve y , howe ve r ,

    mad e exten s ive use of patents ; only 14 did not

    apply for a patent in the previous three years; 79

    applied at the EP O and 78 at the national patent

    office ; 66 applied in the Un ited States and 53 in

    Japan (Arundel e t a l . 1995, pp. 60- 61) .

    A re lated quest ion is w hether patented inventions

    actual ly become innovations . Old (Scherer

    e t a l .

    1959) and new (Sir i l l i , 1987; Napol i tano and Sir i l l i ,

    1990) em pir ical evidence sho w very s imilar results :

    the share of patents actually used by finns ranges

    from 40 to 60 of total applications. Similar ly, the

    EPO survey found that 47 of European f inns used

    com me rcial ly or l icensed more than 90 of the ir pat-

    ented inventions , and another 16 used betw een 50

    and 90 of their patents. Th ese shares are higher for

    4 5 4 T e ch n o v aU o n o l 1 6 N o 9

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      e a s u n n g e c h n o l o g i c a l h a n g e

    smaller firms and show substantial variations across

    countries and industries (EPO, 1994, pp. 117-119).

    In the EPO survey, when firms were asked about

    their usual means of protecting new products and pro-

    cesses, 84 of patenting firms cited patents in the

    case of products and 71 in the case of processes.

    Secrecy was mentioned by about 50 of patenting

    firms and by about 63 of non-patent ing firms. Get-

    ting to market ahead of competitors was reported by

    about 41 of both patenting and non-patenting firms

    (EPO, 1994, pp. 88-91).

    It has often been argued that the value of individual

    patents is highly skewed (see Swann, 1993). In fact,

    several methods have been used to assess the individ-

    ual 'quality' and 'impact' of patents. Four different

    measures have been used to increase the accuracy of

    patent counts.

    • P a t e n t c i t a ti o n s : the count of citations of a patent

    in subsequent patent literature. This is an indicator

    of the technological impact of the patented inven-

    tion (see Narin and Olivastro, 1988b; Trajten-

    berg, 1990).

    • R e n e w a l f e e s : the total cost and the number of

    years for which the patentee pays renewal fees to

    maintain the legal value of the patent. This gives

    information on the economic value attributed to the

    invention (see Pakes and Simpson, 1989).

    • P a t e n t f a m i l i e s :

    mapping the number of countries

    to which a single patent application has been

    extended makes it possible to identify the subset

    of patents applied for in all major markets. This

    shows the areas of exploitation of an invention and

    offers a more accurate database for international

    comparisons (for an application to the US,

    Japanese and the European Patent Offices, see

    Grupp, 1993; Schmoch and Kirsch, 1993).

    • P a t e n t c l a i m s : the number of claims made in each

    patent application, which gives information on the

    range of novelties in the patent document. Recent

    research has shown that the average number of

    claims per patent has considerably increased over

    the last 20 years and that significant differences are

    found across countries (Tong and Frame, 1994).

    2 3 T h e n a t u r e o f in n o v a t io n s u r v e y s

    Contrary to patent data, innovation surveys have

    been developed from the outset with the specific aim

    of acquiring information on innovative activities car-

    ried out in firms. Until very recently, innovation sur-

    veys were organized by government agencies, statisti-

    cal offices or academic institutions for their own

    specific needs. In consequence, the results achieved

    differ quite significantly and are not easy to compare

    (for an attempt to do so, see Acs and Audretsch, 1991;

    Hansen, 199 2; Smith, 1992a, 1992 b; Kaminski,

    1993). Tables 1 and 2 summarize the nature of the

    information drawn from innovation surveys and its

    strengths and weaknesses.

    Innovation surveys have also to face up to the very

    heterogeneous nature of innovations. A jet engine, a

    microprocessor, but also a corkscrew or a hairpin,

    might all be classified as innovations. Several

    attempts have been made to classify innovations

    according to their economic and/or technological sig-

    nificance. Innovations have been divided into

    'improvement' versus 'basic', 'incremental' versus

    'discrete', 'minor' versus 'major', and Freeman

    (1992) has proposed a detailed taxonomy of inno-

    vations. Innovation surveys have also distinguished

    between innovations that are new at world level and

    those that are new for an individual country, industry

    or firm.

    Recently, the OECD and other national and inter-

    national organizations have made an effort to stan-

    dardize the methodology and the information col-

    lected by innovation surveys. The Oslo Manual

    (OECD, 1992a) provides guidelines on the method

    and issues to be covered by innovation surveys. In

    collaboration with the OECD, EUROSTAT has pre-

    pared a harmonized questionnaire, and in 1993-94 the

    EU-sponsored Community Innovation Survey (CIS)

    was carried out. For the first time, innovation surveys

    which are, to some extent, internationally comparable,

    have been completed in most OECD member coun-

    tries (see EUROSTAT, 1994; Archibugi

    e t a l . ,

    1995).

    The first preliminary national findings to be available

    were those of France (see Lhuillery, 1995), Italy

    (ISTAT, 1995; Archibugi

    e t a l . ,

    1995), Germany

    (Licht, 1994), and Canada (Baldwin and Da Pont,

    1995).

    As Tables 1 and 2 indicate, there are two different

    approaches to innovation surveys. The first collects

    information at the level of individual innovations; this

    is the 'object ' approach. The information collected in

    this way is classified according to the 'technological'

    or 'product' criteria listed above (Section 2.1). The

    second collects information at the level of the firm

    producing and/or adopting the innovation; this is the

    'subject' approach. The information collected in this

    way is classified according to the 'sector of pro-

    duction' of innovations as defined above (Section

    2.1).

    2 . 3 . 1 T h e o b j e c t a p p r o a c h : i n n o v a t i o n c o u n t s

    In this approach, the individual innovation is the

    analytical unit of the survey. Additional information

    can also be collected and recorded, such as the size

    and main product line of the firm that introduced it.

    The object approach originated in order to acquire

    information on the dynamics of technological change

    in the context of the link between innovations and the

    long-run swings of the economy.

    The SPRU innovation database, which contains

    information on 4800 radical innovations in the United

    Kingdom since World War II (Townsend e t a l . , 198 I)

    constituted a major development of this approach.

    The US Small Business Administration has collected

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    D A r c h i b u g i a n d M P i a n ta

    information on 8000 innovations commercialized in

    the United States in 1982 from technical and scientific

    journals and magazines (see Acs and Audretsch,

    1990). A similar approach has also been used in some

    European countries (see Wallmark and McQueen,

    1991; Kleinknecht and Bain, 1993; Santarelli and

    Piergiovanni, 1995; Coombs e t a l . , 1995).

    The object approach has much in common with

    patent analysis since both represent innovation

    counts. Comanor and Scherer (1969), Achilladelis

    e t

    al .

    (1987, 1990) and Acs and Audretsch (1989) have

    compared patents with innovation counts. They aim

    to acquire information on the same target population,

    i.e. the innovations introduced into the economic sys-

    tem, although the methodology used to select the

    sampled observations is very different. While patents

    constitute a well-defined population the inventions

    registered to secure legal protection--the same cannot

    be said for the population of innovation counts. In

    fact, none of the available databases claims to collect

    information on all innovations introduced, nor on a

    statistically significant sample. In general, counts of

    innovations monitor fewer observations than patents,

    but record a larger amount of information for each

    of them.

    The advantages of innovation surveys based on the

    object approach are:

    • They represent a direct measure of innovation, and

    they only include innovations considered to be

    technologically and/or economically significant.

    • They provide significant information on the evol-

    ution of technology, since they make it possible to

    record precisely when and how a certain innovation

    was introduced.

    Their disadvantages are:

    • The definition of the sample is arbitrary. Experts

    may have different perceptions of the relevance of

    individual innovations.

    • It is very difficult to develop internationally com-

    parable databases. Each of the surveys has used its

    own design, sample definition and implementation.

    2 . 3 . 2 T h e s u b j e c t a p p r o a c h : s u r v e y s o f f i r m s

    This is an alternative method of acquiring direct

    information on innovation in industry, in which firms

    are surveyed to learn the inputs, outputs and charac-

    teristics of their innovative activities. While both pat-

    enting and innovation counts collect information on

    innovations p e r s e , the subject approach also allows

    one to gather information on various aspects related

    to innovative activities, as well as on non-innovating

    firms and on the factors that hamper innovation. It

    also makes it possible to collect information on innov-

    ative activities that do not lead to the introduction of

    actual innovations, because, for example, they

    resulted in failures.

    Depending on the design of individual surveys, the

    nature and amount of information collected may vary

    considerably; only recently has an attempt been made

    to collect standardized information. The data drawn

    from the subject approach can be treated as part of

    industrial statistics, since they provide information at

    the finn level on both the inputs and outputs of innov-

    ative activities.

    The Oslo Manual (Chapter 5, pp. 137-140) has

    listed the limits of the object approach, which are due

    to the heterogeneous nature of individual innovations.

    Following the Oslo Manual and the Community Inno-

    vation Survey launched in Europe, the subject

    approach is becoming the standard method for col-

    lecting direct information on innovation in industry.

    Its main advantages are:

    • The information collected can be related to the

    industrial structure. Innovations can be matched to

    economic data on production, value added,

    employment, etc., at the firm and industry level.

    • It provides coverage of both innovating and non-

    innovating firms. This allows the factors preventing

    innovation to be explored.

    • It gives information both on the firms generating

    and on those using innovations. This allows one to

    treat not only manufacturing but also the service

    industries.

    Its main disadvantages are:

    • In spite of recent efforts, it is not yet easy to gather

    internationally comparable data.

    • Since the monitoring of innovation according to

    this method is still in its infancy, time-series com-

    parisons are not yet possible.

    • This method does not collect information on the

    technological nature of the innovations introduced

    in firms.

    Considering the dif ferent advantages and disadvan-

    tages of technology indicators, it is important to com-

    pare the findings for a particular indicator to the pic-

    ture provided by other data, including the more

    widely used R&D expenditure. Akerblom

    et al .

    (1995) compare R&D, total innovation expenditure

    and sales according to innovative products and patents

    for Finland, and Grenzmann and Greif (1995) com-

    pare R&D inputs and patent outputs for Germany.

    Baldwin et al . (1995) compare R&D to innovation

    expenditure for Canada. For France, a study of patents

    and innovation survey results can be found in

    Kabla (1994).

    2 4 T h e i n d u s t r ia l c la s s i fi c a U o n s o f t e c h n o l o g y d a t a

    When comparing different technology indicators

    among themselves and/or to economic variables such

    as production and trade, the comparability of the

    classifications employed raises a serious problem.

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    M e a s u r in g e c h n o l o g i c a l c h a n g e

    Innovation counts can provide different aggregations

    of the data collected, but a standardized classification

    has not been used so far. Innovation surveys of firms

    provide data at firm level which are consistent with

    the sources of industrial statistics. Provided that the

    survey is representative of the universe of firms, these

    data can be easily arranged in order to be comparable

    with information on production, value added, employ-

    ment, etc., at all levels of aggregation, from individual

    firms to sectors of industrial activity .

    Patent data are aggregated according to the Inter-

    national Patent Classification (IPC) and, in the United

    States, according to the US Patent Office Classifi-

    cation (USPOC) for which a cross-classification con-

    cordance to the Standard Industrial Classification

    (SIC) has been established.

    Economic indicators on production and trade are

    generally available according to the International

    Standard Industrial Classification (ISIC), the Statisti-

    cal Classification of Economic Activities of the Euro-

    pean Community (NACE) and the Standard Inter-

    national Trade Classification (SITC). Depending on

    the type of analysis planned, different classifications

    have to be matched, and several efforts have been

    made in this direction.

    Full information on the concordances with patent

    data that are available is provided in the Patent Man-

    ual (OECD, 1994). Patent data by SIC classes have

    been related to SITC data on trade (Soete, 1981, 1987;

    Grupp, 1991, 1992; Amendola e t a l . 1992). A con-

    cordance between IPC and ISIC classes has been

    developed at MERIT (Verspagen

    e t a l .

    1994) and a

    concordance between IPC and SITC has been

    developed for 46 high-technology product groups by

    ENEA, Cespri and Politecnico di Milano and is

    reported in Annex IV of the OECD Patent Manual

    (see Breschi, 1994). Other work has been carried out

    at FhG-ISI in Germany and at the Finnish Central

    Statistical Office.

    3 . F IR M L E V E L A N A L Y S I S

    After spelling out the key concepts and the method-

    ological problems for the use of technology indic-

    ators, three major dimensions of analysis have to be

    addressed: the company level, the industry level, and

    the country level. These will be discussed in

    sequence, in terms of three major research topics: the

    sources, the structure, and the impact of innovations.

    3 1 T h e s o u r c e s o f i n n o v a lJ o n o r f i r m s

    3 . 1. 1 E v i d e n c e f r o m i n n o v a t io n s u r v e y s

    The innovation surveys carried out so far (see, in

    particular, ISTAT, 1989, 1995; Ministrre de l'Indus-

    trie, 1994; and, for a comparison, Kaminski, 1993)

    have already highlighted several aspects o f the

    sources, inputs and outputs o f industrial innovation.

    One key piece of information provided by innovation

    surveys is the number of firms actually involved in

    innovation. Large firms or firms active in technologi-

    cally dynamic sectors tend to innovate on a regular

    basis, while most companies, especially smaller ones,

    introduce innovations irregularly. On such a critical

    question, however, the different designs of surveys

    have so far prevented meaningful comparisons across

    countries. The framework provided by the OECD

    Oslo Manual and the Community Innovation Survey

    now makes possible the development of comparable

    evidence.

    The CIS-based survey for Italy (ISTAT, 1995)

    covered close to 23 000 firms, one-third of which

    (7500) have declared that they introduced innovations

    in the 1990-92 period. The share of innovating firms

    ranges from 84 for firms with more than 1000

    employees to 26 for firms with 20-49 employees.

    The CIS-based survey for France shows that in the

    same period close to 40 of firms (using a sample

    of 4500 firms) have declared that they introduced

    innovations, with similar differences across size

    groups (see Lhuillery, 1995). The CIS-based survey

    for Germany covers a sample of 2900 firms; 65

    reported that they have introduced new or improved

    products or processes in the last three years or intend

    to do so in the coming years (Licht, 1994).

    Innovation surveys have also produced new evi-

    dence on factors hampering innovation. Lack of

    funds, the excessive cost of innovation, and high risk

    are generally indicated as major obstacles (ISTAT,

    1995). Such information can be useful in order to

    design specific policy measures aiming at increasing

    the rate of innovation in firms that already introduce

    innovations or to overcome the barriers to innovation

    in those that have failed to do so.

    Innovation surveys have also identified the sources

    used by firms to sustain innovation. According to the

    CIS-based surveys for Italy and France (ISTAT,

    1995; Lhuillery, 1995), sources internal to the firm

    (R&D and other departments), suppliers o f equipment

    and materials, customers, exhibitions and trade fairs

    are (in that order) the main sources of innovation.

    Customers, technical journals, trade fairs and sup-

    pliers (in that order) emerge from the EPO survey as

    the main sources of information on technical develop-

    ments for both patenting and non-patenting firms in

    Europe.

    Another important finding on the sources of inno-

    vation is the remarkable inter-industry difference of

    patterns. While tradit ional industries tend to use

    sources external to the firm and often acquire inno-

    vations embodied in capital goods, science-based

    industries use internal sources such as R&D and

    design (see Pavitt, 1984; von Hippel, 1988; Archibugi

    e t a l .

    1991).

    A major contribution of innovation surveys is the

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    D . A r c h i l u g ia n d M . P i a n t a

    information they provide on the various expenditures

    related to innovation. The CIS-based survey for Italy

    shows that R&D accounted for only 36 of total

    innovation costs, with 14 due to design and trial

    production, and 47 devoted to innovation-related

    investment. The share of R&D grows with the size

    of firms, while the importance of investment falls (for

    firms with more than 1000 employees, it is about

    40 ) (ISTAT, 1995; the question was not included in

    the French survey). These findings confirm previous

    evidence for the importance of non-R&D costs of

    innovation (see Evangelista, 1995). However, each

    industry is characterized by a specific combination of

    embodied and disembodied, tangible and intangible

    sources of innovation.

    Arvanitis and Hollenstein (1995) present an attempt

    to explain firms' innovative activities. Using data

    from the Swiss innovation survey, the authors find

    that the degree of appropriability and technological

    opportunities affect firms' innovations more than

    demand or market conditions. Crepon and Duguet

    (1994) examine how market effects and externalit ies

    affect innovation in French firms and find a close

    relationship between R&D and patenting.

    3 . 1 . 2 T he mul t i - t echnolog y f i rm

    Industrial economists and management analysts

    often need to identify the technological nature of the

    innovations developed within a firm (Brockhoff,

    1992). The majority of firms, and above all the large

    ones, are highly diversified, and this is reflected in

    their innovations. Their technological activities often

    cover a larger number of fields than their product

    lines. However, innovation surveys are not able to

    provide a satisfactory description of the technological

    nature of the innovations introduced.

    Patents, instead, provide much more detailed infor-

    mation. The high level of disaggregation offered by

    patent data and the number of patents registered by

    large firms make it possible to investigate the distri-

    bution of a firm's innovative projects. Several studies

    have considered firms' patent portfolios either to

    study their technological diversification (Kodama,

    1986; Niwa, 1992; Patel and Pavitt, 1994) or to ident-

    ify to what extent firms benefit from innovations car-

    ried out by firms engaged in similar technological

    areas (Jaffe, 1986). These studies have shown that:

    • the majority of companies have a wider distribution

    of technological activities than product lines and

    that they often produce their own equipment and

    machinery, or the intermediate components of

    their products;

    • patents can help to identify company strategies,

    often before they are implemented in the market;

    • patents are also a valuable tool for identifying the

    combination of different branches of knowledge

    into a new technological advance (technology

    fusion).

    3 . 2 T h e s t r u c tu r e o f i n n o v a t i o n : f ir m s i z e a n d c o n c e n t r a t io n

    A current important topic in industrial economics

    concerns how industrial concentration and market

    structure relate to innovation. What is the relative

    innovation performance of small and large firms? Is

    there a specific market structure (such as monopoly,

    oligopoly or perfect competition) that can maximize

    the rate of innovation? This extensive literature is

    reviewed, among others, by Kamien and Schwartz

    (1982), Baldwin and Scott (1987) and Cohen and

    Levin (1989).

    Several indicators, in particular R&D and patent-

    ing, have been used to test these hypotheses. These

    indicators are particularly valuable for describing the

    technological activities carried out in large firms. In

    fact, both R&D and patenting are concentrated in

    large firms: less than 700 world companies are

    responsible for nearly 60 of the world patents, a

    share slightly higher than their share of world busi-

    ness-funded R&D (see Patel and Pavitt, 1991b; Cas-

    son, 1991) . Similar levels of concentration also

    emerge at the level of individual countries.

    Neither R&D nor patents provide an accurate

    account of the distribution of innovative activities

    across firms of different size (see Minist~re de l'Indu-

    strie, 1994). It has been shown that standard R&D

    surveys underestimate the amount of R&D carried out

    in small firms (Kleinknecht, 1987; Kleinknecht and

    Reijnen, 1991; Archibugi

    et al .

    1995).

    However, beyond the question of the accuracy of

    the measurement of R&D activities, it appears that

    significant non-R&D innovative activities are carried

    out to a greater extent in smaller firms and in tra-

    ditional industrial sectors. Innovation surveys have

    been used to assess the relative contribution of large

    and small firms to innovation (Pavitt et al . 1987; Acs

    and Audretsch, 1990, 1992; Archibugi

    e t aL

    1995;

    Malerba and Orsenigo, 1995). The results of these

    studies have confirmed the existence of significant

    inter-industry differences in concentration ratios.

    They have also shown that small firms in selected

    fields are not disadvantaged in terms of innovation

    when compared to their larger competitors.

    Other attempts have recently been made to identify

    innovation flows in specific industrial districts. It has

    been suggested that small firms tend to create their

    own networks for acquiring and transferring technical

    information. The specific role of very small firms in

    the innovation process and as part of supplier net-

    works of large firms is discussed by Kaminski (1995).

    3 . 3 ] h e i m p a c t o n f in n s p e r f o r m a n c e

    Patents and technological indicators also highlight

    the dynamics of the innovation process and its impact

    on the performance of firms. Technology is expected

    to influence firms' economic performance in a variety

    of ways, including productivity, growth and competi-

    4 5 8 T e c h n o v a t i o n o l . 6 N o . 9

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    tiveness. A major research project on these issues has

    been developed by the US National Bureau of Econ-

    omic Research; it focuses on the relationship between

    technological factors (measured by R&D and patents)

    and economic indicators such as productivity and

    stock market value (see Griliches, 1984, 1990; Gril-

    iches

    e t a l .

    1991; Hall, 1993). It has shown that the

    technological performance of the firm is positively

    associated with its market value.

    Using innovation counts, Acs and Audretsch

    (1990) have also studied the role of technology in the

    growth of firms. Simonetti (1994) has used patent

    indicators combined with other variables for US

    firms; Schwitalla and Grupp (1994) have undertaken

    a similar study for German firms. Geroski

    e t a l .

    (1993) have considered how innovation affects finns'

    profitability. While these studies have confirmed that

    performance and technology are associated, they have

    also suggested that it is not easy to identify a general

    pattern of causality going from the latter variable to

    the former.

    4 . 1 .1 I n n o v a t i o n f o w s a c r o s s s e c to r s

    A variety of innovation surveys have also recorded

    and classified the industries that use innovations (see

    Robson

    e t a l .

    1988; Marengo and Sterlacchini, 1990;

    De Bresson

    e t a l .

    1994). Most studies have been car-

    ried out at the country level and identify the specific

    characteristics of user-producer interactions. Some

    key intersectoral links have emerged as persistent pat-

    terns. De Bresson (1995) finds important differences

    in the industry clusters according to intensity of inno-

    vation flows in Italy, France and China, thereby con-

    firming the different innovative and industrial struc-

    tures of the three countries.

    4 1 2 Patent flows across sectors

    I n f o r m a t i o n f r o m u s e r s e c t o r s c a n a l s o b e o b t a i n e d

    f r o m p a t e n t d a t a . E a c h p a t e n t d o c u m e n t i s a s s i g n e d

    t o a s e c t o r a c c o r d i n g t o i t s t e c h n i c a l n a t u r e , b u t s i n c e

    t h e i n v e n t i o n i n v o l v e d s h o u l d a l s o b e ' u s e f u l ' , a p a t -

    e n t m a y a l s o i n c l u d e a r e f e r e n c e t o i t s p r o s p e c t i v e

    u s e . T h e l a t t e r i n f o r m a t i o n , u n f o r t u n a t e l y , i s n o t s y s -

    t e m a t i c a l l y c o l l e c t e d i n p a t e n t d o c u m e n t s a n d d a t a -

    b a s e s .

    4 . IN D U S T R Y L E V E L N A L Y S IS

    The characteristics of an industry play a key role

    in shaping firms' technological activities and per-

    formance. The intensity and scope of a firm's innov-

    ative efforts are strongly constrained by industry-

    specific aspects, including technological opportunities

    and market structure. Detailed information on the

    similarities and differences among industrial sectors

    and on flows of know-how is needed in order to

    understand the boundaries of firms' innovative activi-

    ties. As for firms, the role of industrial structure is

    here considered in terms of the sources, structure and

    impact of innovative activities.

    4 1 T e c h n o l o g ic a l n t e rd e p e n d e n c e

    Technology systems are characterized by strong

    interdependence. Some innovations might be pro-

    duced and used within the same firm, but most sig-

    nificant innovations move among firms and sectors.

    Some innovations have a single user industry; others

    have a more pervasive impact across industries. Much

    progress has been made in understanding and measur-

    ing economic interdependence, using techniques such

    as input-output tables (for a review, see Archibugi,

    1988; De Bresson, 1990). Acquiring information on

    technological interdependence requires the avail-

    ability of data on innovations classified according to

    both sector of production and sector of use. The study

    of technological interdependence has first a descrip-

    tive value. It makes possible, among other things, the

    identification of industries with strong interactions. It

    may also lead to important policy implications: ident-

    ifying upstream suppliers of innovations for a specific

    industry may help design appropriate innovation poli-

    cies.

    Schmookler (1966) and Scherer (1982b) have

    identified the sector of use of individual patents,

    thereby making it possible to produce matrixes of

    technological interdependence, with each cell con-

    taining the number of patents that share the same

    industry of production and industry of use. From

    1972, the Canadian patent office has also provided

    information on the industry likely to use patents

    (S6guin-Dulude, 1982; Hanel, 1994). A method to

    estimate patents by industry of use for all countries

    on the basis of the Canadian data has been developed

    by Robert Evenson and his colleagues at the Univer-

    sity of Yale (see Englander

    e t a l .

    1988; Evenson

    et

    a l .

    1988). Using Canadian data for the 1986-89 per-

    iod, Hanel (1994) has produced a matrix for the pro-

    duction and use of inventions by 29 industries (the

    matrix is reported in the OECD Patent Manual, Annex

    IV-B; OECD, 1994).

    4 2 ~ e i n d u s t r ia l s t r u c tu r e o f in n o v a t i o n

    At the industrial level, it is possible to identi fy sev-

    eral common aspects o f the structure of the innovative

    process. These have been summarized in various

    taxonomies based on different R&D intensities, on

    sources of innovations, on mechanisms of technical

    change, and on firms' strategies. Pavitt (1984) pro-

    posed a most successful taxonomy identifying four

    broad groups: industries where the introduction of

    innovations is generally based on R&D (science-

    based); industries where innovations largely come

    from suppliers of inputs and machinery (supplier-

    dominated); industries which emerge as specialized

    suppliers o f innovative goods; industries where inno-

    vation and process technology are closely linked to

    scale factors (scale-intensive). This taxonomy has

    been widely applied to technological data, such as

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    D . A r c h ib u g i a n d M . P i a n t a

    innovation counts and patents, either at industry level

    (Archibugi e t a l . 1991; Kristensen, 1993) or at firm

    level (Cesaratto and Mangano, 1992; Molero and

    Buesa, 1994), as well as to economic data on pro-

    duction and trade.

    Evangelista (1995) develops further qualifications

    of industrial patterns using data from the first Italian

    innovation survey and considering firm size and the

    nature of innovative activities (disembodied know-

    how such as R&D and design and engineering on the

    one hand, and technology embodied in tangible

    innovative investment on the other). Four groups are

    identified: technology users that introduce innovations

    developed by other industries; small-scale innovators

    that emphasize innovative design and engineering;

    industries dominated by large-scale firms, which rely

    on investment in innovative machinery; sectors com-

    bining both high R&D and high tangible investment

    efforts.

    4 . 3 1 ~ e m p a c t o n t h e p e r f o rm a n c e f in d u s W ie s

    The distribution of a firm's sales according to the

    type of innovation introduced is an important indi-

    cator of the economic impact of innovations. Such

    data are now included in the CIS-based innovation

    surveys; data for Italy show that 27 of firms' sales

    were due to products with (radical or incremental)

    innovations; 28 were affected by process inno-

    vations; and 45 had no innovative content. While

    little change is found in groups of firms of different

    sizes, large differences emerge among sectors; 75 of

    sales in the office machinery industry include product

    innovations, and shares of around 50 are found for

    most machinery and electrical sectors, while values

    below 20 are found in some traditional industries

    (ISTAT, 1995). In the French CIS-based survey, 41

    of firms reported a share of innovative sales between

    0 and 10 of total sales and less than 20 of firms

    reported that more than 30 of their turnover was

    related to product innovations (see Lhuillery, 1995).

    This indicator of the market impact of innovations,

    as measured by the shares of sales of innovative pro-

    ducts, offers a rather different picture from that of

    other technology indicators. In a preliminary analysis

    of the findings of the German CIS-based survey, the

    shares of innovative sales appeared largely unrelated

    to R&D and patent indicators (Licht, 1994). This con-

    firms the results of the first Italian innovation survey

    (Cesaratto and Mangano, 1992).

    This evidence can be related to EPO survey find-

    ings showing that, among European firms applying

    for patents, 47 of sales were unaffected by inno-

    vation, while 26 were due to new or substantially

    changed products and processes and 27 to improved

    products and processes. Among non-patenting firms,

    the share of sales with no innovation stood at 52 .

    No differences by firm size have emerged in these

    patterns (EPO, 1994, p. 74).

    In assessing the impact of innovation on industry

    performance, it should be borne in mind that the most

    innovative sectors are also those whose weight in the

    economy is increasing. However, as pointed out

    above (Section 4.1), a major result of innovations is

    a reduction in the (relative) costs of new products and

    activities and, therefore, generalized productivity

    gains in several user sectors. In order to account for

    such increases in productivity, innovative activities,

    measured either by patent or innovation surveys,

    should be available for both sector of production and

    sector of use (see Scherer, 1982a; Englander e t a l .

    1988; Sterlacchini, 1989; Geroski, 1991).

    Electronics is a major example of an industry that

    is an important producer of innovations. The dramatic

    reduction in the cost of many electronic products

    makes a comparison between high technological

    activity (as measured by patents) and the value of pro-

    duction in the industry (with growing volumes, but

    falling prices) potentially misleading, as the benefits

    of the innovations are actually distributed to user

    industries.

    An industry's ability to exploit the benefits of the

    innovations it has produced is strictly related to the

    degree of appropriability. If appropriability and mar-

    ket power are strong, all benefits can remain with the

    innovating firm, and t s performance may show strong

    productivity gains. Conversely, when appropriability

    is low and diffusion mechanisms and competition are

    strong, the benefits can quickly spread to users and

    consumers in the form of lower prices and/or better

    products or processes. In this case, productivity gains

    are expected to be found economy-wide. It may be

    pointed out that this is one of the implicit assumptions

    underlying research on innovation and 'total factor

    productivity' in neo-classical models (see Griliches,

    1984; Englander e t a l . 1988).

    Innovation surveys provide additional information

    on the impact on performance expected or experi-

    enced by the innovating firms. While most o f this evi-

    dence is likely to be qualitative and difficult to relate

    in a systemat ic way to quantitative variables, new

    light can be shed, especially at the sectoral level, on

    the link between innovation and performance.

    The impact innovations introduced by firms have

    had on employment and capital intensities offers a

    relevant example. In the first Italian innovation sur-

    vey, carried out on 8220 firms (see ISTAT, 1989), it

    was asked whether the innovations introduced had led

    to an increase, decrease or no change in the use of

    labour and capital. A study at industry level by Vivar-

    elli e t a l . (1995) shows the labour-substi tuting effects

    of innovations (in most sectors and sizes of firms)

    and their capital-deepening nature (in practically all

    cases). The overall negative impact of innovation on

    employment in Italian industry is found to be caused

    by the dominant role of process innovations and

    embodied technical change. A labour-increasing

    4 6 0 Tedmova ~on oL16 No. 9

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    D A r c h i b u g i a n d M P i a n t a

    ties that emerges from country data. Indeed, the

    characteristics of countries and their national systems

    of innovation, namely their industrial strengths and

    fields of excellence, remain important for shaping the

    direction taken by the international flows of innov-

    ative activities and the strategies of multinational

    firms. Barr6 (1995) argues, however, that inter-

    national innovative networks organized by multi-

    national firms and national systems of innovation

    affect each other in a broader way, with a variety of

    country and sectoral specificities.

    These results, however, hold mainly for the group

    of more advanced OECD countries that are active

    participants in the globalization of technology. The

    perspective is different for the less advanced coun-

    tries, which are mainly recipients of technology flows

    from abroad and which are more dependent on the

    activity of multinational firms. In terms of inter-

    national flows of technology, the strategies of multi-

    national firms and the policies of individual countries

    often follow divergent paths.

    5 . 2 T h e s b u c t u r e o f in n o v a t i v e a c t i v i t ie s a c r o s s c o u n t r i e s

    When technological efforts are investigated at the

    country level, it is relevant to identi fy the structure of

    national innovative activities across industries. Many

    studies have compared industrial patterns of inno-

    vation across countries in order to describe a coun-

    try's relative technological position and its relative

    specializations. While the lack of internationally com-

    parable innovation data has prevented cross-country

    analyses, patent data have been extensively used to

    investigate national strengths and weaknesses in tech-

    nological fields, at different levels of aggregation (see

    Soete and Wyatt, 1983; Patel and Pavitt, 1991a; Arch-

    ibugi and Pianta, 1992).

    A large number of patent-based studies have pro-

    vided a detailed description of countries' innovative

    activities and comparative performances, and their

    changes over time. They include Narin and Olivastro

    (1987b), Slama (1987), Patel and Pavitt (1989a) for

    Germany; Patel and Pavitt (1989b), Narin and Oli vas-

    tro (1987a), Cantwell and Hodson (1991) for the

    United Kingdom; Pavitt and Patel (1990) and Barr6

    e t a l . 1 9 9 4 )

    for France; Narin and Olivastro (1988a)

    for Japan; Paci (1991), Boitani and Ciciott i (1992)

    and Breschi (1994) for Italy; Engelsman and Van

    Raan (1993) for the Netherlands.

    This is a rather straightforward application of pat-

    ent data; however, attention should be paid to the nat-

    ure of the databases and indicators used when making

    comparisons across countries, industries and over

    time (these issues are reviewed in detail in the OECD

    Patent Manual). The use of different databases

    (patents in individual countries, in the United States,

    at the European Patent Office, in all triad countries,

    etc.) has made it possible to compare different pic-

    tures and to assess the value and limitations of patents

    as a technology indicator.

    This evidence has shown that countries differ in

    their sectors of strengths and weaknesses in tech-

    nology. Moreover, some countries concentrate their

    activity in selected fields, while others distribute their

    efforts more uniformly across technological areas. As

    expected, small countries show higher levels of spe-

    cialization in technological activities as well as in

    industrial production and trade. In spite of the relative

    convergence of aggregated technological efforts in

    advanced countries, the differences in their sectoral

    specialization have generally increased (see Archi-

    bugi and Pianta, 1992).

    5 3 I n n o v a t io n n d n a t io n a lp e r f o r m a n c e

    In order to investigate the impact technology has on

    the performance of countries and industries, several

    studies have related patent data to economic indi-

    cators, either at national level or when investigating

    industrial patterns. Aggregate studies of the role of

    technology as a source of countries' competitiveness

    have shown that a higher intensity of technological

    activities has a generally positive impact on national

    growth. A large body of literature on technology and

    growth has investigated this relationship, using all the

    available indicators.

    Patent data, disaggregated by product/industry,

    have been used to explore the relationship between

    technology and trade. Several studies have shown that

    sectoral specialization resulting from patents is gener-

    ally associated with the industrial pattern of countries'

    exports (Soete, 19 87 ; Fagerberg, 19 87 , 1988;

    Cantwell, 1989; Dosi e t a l . , 1990; Amendola e t a l . ,

    1993; Verspagen, 1993; Eto and Lee, 1993). Other

    studies have explicitly addressed the problem of the

    concordance between different classifications dis-

    cussed above (Section 2.4), developing a more accur-

    ate correspondence between patent classes and inter-

    national trade categories (Soete, 1981; Dosi e t a l . ,

    1990; Amendola e t a l . , 1992). Grupp e t a l . (1995) link

    patent data and export performance of most OECD

    countries using a product-based classification of

    high technology.

    Research on the patterns defined by the relationship

    between industries' innovative activity and national

    performance has provided a better understanding of

    the differentiated impact technology has on the

    growth of individual industries and has highlighted

    important specificities o f national systems of inno-

    vation. This is a field where the availability of

    improved--more significant and more comparable--

    databases will open new opportunities for research

    and policy studies.

    6 C O N C L U S I O N S

    Patents and innovation surveys offer two important

    means of acquiring information about technological

    change in firms. They have advantages and disadvan-

    46 T e c h n o v a S o n o l .1 6 N o . 9

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    M e a s u n n g e c h n o l o g ic a l h a n g e

    im pac t i s on ly found in a f ew sec to r s cha r ac te r iz ed

    b y h i g h e r e x p e n d i t u r e s f o r d e s ig n a n d e n g i n e e r in g a n d

    highe r sha r es o f p r oduc t innova t ions .

    5 . C O U N T R Y L E V E L N A L Y S IS

    R e c e n t r e s e a r c h h a s e m p h a s i z e d t h e i m p o r t a n c e o f

    na t iona l sys tem s of innova t ion and the i r d i f f e r ences

    ac r os s OECD count r i e s in t e r m s of ins t i tu t ions ,

    r e la t ionsh ips am ong ac to r s , s iz e o f re sour ces , s ec to r s

    of spec ia l i z a t ion , and typ e of pe r fo r m ance . In pa r a l le l ,

    a g r owing l i t e r a tu r e has addr es sed the g loba l iz a t ion

    of t echnology , which m a in ly r e su l t s f r om the ac t iv i ty

    of m ul t ina t iona l f ir m s. T h is s ec t ion d i s cus ses the

    na t iona l pa t t e r ns em er g ing f r om innova t ion and pa ten t

    d a t a a n d t h e i m p a c t o f c r o s s - b o r d e r f l o w s o f t e c h -

    no logy on count r i e s ' pos i t ions .

    5 _ T h e g l o b a l s o u r c e s o f in n o v a U o n

    The innova t ion p r oces s i s inc r eas ing ly t ak ing p lace

    on a g loba l s ca le . Ar ch ibugi and Mich ie ( 1995) have

    iden t i f i ed th r ee m a jor fo r m s of g loba l iz a t ion of t ech-

    no logy ( Tab le 3 ) .

    Fir s t , the glob l exploit tion of technology inc ludes

    the use by f i r m s of pa ten t s and o the r in te l lec tua l p r op-

    e r ty r igh t s to p r o tec t the i r inven t ions and b lock com -

    pe t i to r s a s they p r epa r e the i r en t r ance in to fo r e ign

    m ar ke t s o r l i cense the i r t echno logy to loca l p r oduce r s .

    T h i s l a rg e a n d g r o w i n g p h e n o m e n o n ( 6 % g r o w t h r a te

    a yea r ) i s due bo th to the p r ac t ice o f ex tend ing p r o tec -

    t ion to m or e count r i e s ( th r ee to fou r count r i e s on

    ave r age ) and to the ac tua l g r owth in the num ber o f

    pa ten ted inven t ions . Ev idence on th i s t r end i s a l so

    p r o v i d e d b y t h e j o i n t r e p o r t o f t h e p a t e n t o f f i c e s o f

    E u r o p e , t h e U n i t e d S t a t e s a n d J a p a n ( E P O , J P O a n d

    U S P T O , 1 9 9 3 ) a n d b y a s t u d y b y S c h m o c h a n d

    Kir sch ( 1993) .

    S e c o n d , t h e intern tion l coll bo r tion in f i rms '

    innova t ive e f fo r t s r epr esen t s a poo l ing of r e sour ces

    f r om d i f f e r en t count r i e s , due to the s ea r ch fo r com p-

    lem enta r i t i e s in f i r m s ' t echnolog ica l and m ar ke t ing

    s t r a teg ie s . I t m ay invo lve no t on ly the gene r a t ion of

    innova t ions , bu t a l so the i r app l ica t ion , d i f fus ion and

    adap ta t ion to loca l m ar ke t s. Ac cor d ing to the da tabase

    on in te r - f i r m coope r a t ion agr eem ents deve loped a t

    M E R I T b y H a g e d o o r n a n d S c h a n k e r a a d ( 1 9 9 3 ) , t h e r e

    has been an ave r age annua l inc r ease o f 6% in the

    n u m b e r o f i n t e r n a t i o n a l t e c h n o l o g y a g r e e m e n t s

    be tween the f i r s t and the s econd ha l f o f the 1980s .

    In te r na t iona l co l l abor a t ions a r e a l so r evea led in the

    r ap id g r owth of pa ten t s wi th inven tor s f r om m or e than

    o n e c o u n t r y . B r o w n a n d H i r a b a y a s h i ( 1 9 9 5 ) e x a m i n e

    t h i s a s p e c t a n d s h o w t h a t t h e n u m b e r o f U S p a t e n t s

    w i t h a t l e a s t o n e A m e r i c a n a n d o n e f o r e i g n i n v e n t o r

    gr ew f r om 90 in 1983 to 1500 in 1993 . An ana lys i s

    o f E P O p a t e n t s w i t h i n v e n to r s f r o m F r a n c e a n d o t h e r

    count r i e s i s ca r r i ed ou t in Dugue t ( 1994) .

    Third, a glob l gener tion of technology i s found

    wi th in s ing le m ul t ina t iona l f i r m s when innova t ion i s

    the r e su l t o f e f fo r t s unde r taken in l abor a to r ie s and

    p lan t s s i tua ted in s eve r a l count r i e s ( P ea r ce and S ingh ,

    1992) . An ind ica to r o f th i s t endency i s p r ov ided by

    the sha r e o f pa ten t s g r an ted to the fo r e ign subs id ia r ie s

    of m ul t ina t iona l f ir m s. R ecen t s tud ie s ( P a te l and P av -

    i t t , 1991b; Pate l , 1995) have shown that these

    acco unted fo r l e s s than 4% of to ta l pa ten ts in the pe r -

    i o d 1 9 8 1 - 8 6 , w i t h 1 % a n n u a l g r o w t h b e t w e e n t h e

    ea r ly and l a te 1980s. S chm och ( 199 5) p r e sen t s s im i la r

    r e su l t s fo r m ul t ina t iona l f i r m s in the t e lecom m uni -

    ca t ions s ec to r .

    These r e su l t s sugges t tha t the degr ee o f g loba l iz -

    a t ion in the gene r a t ion of t echnology by l a r ge f i r m s

    i s lower than i t i s fo r p r oduc t ion and inves tm ent , and

    that i t is conf ined to specif ic industr ies , countr ies and

    f ir m s. T he p r oduc t ion of techn olog y r em a ins l a r ge ly

    in ( o r in the v ic in i ty o f ) the hom e coun t r y o f the inno-

    vating firm.

    W hi le the g loba l iz a t ion p r oces s i s im por tan t fo r

    se lec ted f i r m s and indus t r i e s , i t appea r s to have l i t t l e

    in f luence on the ove r a l l p ic tu r e o f innova t ive ac t iv i -

    TABLE 3. Three meanings of 'Techno-globali sm'

    Economic equivalent

    Results

    Measure(s) Stock Flow

    (a) Global exploitation of

    technology

    Ib) Global technological

    collaboration

    (c1 Global generation of

    technology

    International trade flows (as

    opposed to foreign direct

    investment)

    International joint ventures

    Foreign direct investment

    (as opposed to trade flows)

    Patents extended in foreign

    markets.

    Technological balance of

    payments

    Inter-firm technical

    agreements.

    Patent licensing

    Patents and R&D of firms

    from outside their home

    country

    Patents were on average

    extended in 3-4 foreign

    markets in 1990

    Not available

    3.8 of US patents in 1981-

    86

    6 aver age annual growth

    rate for the OECD countries

    during the 1980s

    6 annual growth comparing

    the period 1985-89 to the

    1980-84 period

    1 growth between 1981-85

    and 1986-90

    Source Archibugi and Michie (1995).

    T e c h n o v a U o n o l 1 6 N o 9 4 6 1

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    M e a s u r in g t e c h n o l o c a l c h a n g e

    tages that complement other widely-used indicators

    such as R&D, trade in high-technology products,

    bibliometric indicators, etc., and provide in-depth

    information on certain aspects which cannot be

    obtained from other indicators.

    6 . 1 N e w d e v e l o p m e n t s f o r p a t e n t b a s e d i n d ic a t o r s

    The use of patenting as an indicator of technologi-

    cal innovation has grown steadily over the past dec-

    ade. Patent data are available at low cost and in large

    numbers; this makes it easier for international organi-

    zations, government agencies, research centres, and

    individual scholars to use them. Several of their short-

    comings can now be dealt with either by statistical

    elaborations or by refinement of the data. The most

    relevant research areas and problems are the follow-

    ing:

    • The need for improved estimates, more reliable and

    more comparable across countries, of the extent to

    which patents account for all inventions and are

    actually used for introducing innovations or carry-

    ing out production at the firm, industry and coun-

    try levels.

    • Refinement of the quality of patent data in order

    to understand the value of individual patents. As

    mentioned above (Section 2.2), patent citations,

    renewal fees, number of claims and number of

    extensions are used to account for the individual

    value of each patent. Over the last decade, the cost

    and effort required by this type of research have

    been considerably reduced by the availability of

    computerized databases. So far, individual research

    teams have invested their own resources and efforts

    to produce these data sources. It would be desirable

    to obtain data on the quality of individual patents

    at the source, i.e. from the national patent offices.

    • Patents are also used to study technological inter-

    dependence. At present, only the Canadian patent

    office provides information on the sector of use of

    the patented invention. This information enlarges

    considerably the usefulness of patent indicators,

    and Canadian patents have been used by a growing

    number of scholars. It is to be hoped that other

    patent offices will follow this example.

    • As indicated in Table 2, one of the main advan-

    tages of patents is to provide internationally com-

    parable information on detailed technological

    fields. Recent research has further improved the

    accuracy of patent-based international comparisons

    by examining the extension of patents to the most

    significant markets (see Schmoch and Kirsch,

    1993).

    • Patents are also increasingly used to monitor inno-

    vations occurring within the firm. Large firms have

    considerable innovative activities that are confi-

    dential in nature, but detailed descriptions of some

    of the most important innovative activities are

    reported in patent documents. Patents can be used

    to chart the direction and content of current innov-

    ative activities carried out by firms.

    • Finally, a large body of literature has used patent-

    based indicators either at country or industry level

    in order to link technology to patterns in science,

    R&D, production and exports. Patents should be

    related to other data, including technology, biblio-

    metric and economic indicators, in a more system-

    atic approach.

    6 2 N e w d e v e lo p m e n ts o r i lm o v o n s u r v e ys

    Innovation surveys are one o f the main new devel-

    opments in the measurement of technological change.

    Until very recently, they faced some basic limitations,

    notably the lack of harmonization and standardization

    over time and across countries. The OECD Oslo Man-

    ual and the EU-sponsored Community Innovation

    Survey (CIS) have made available a large body of

    evidence, with internationally comparable and stan-

    dardized data, for the countries of the European

    Union. The main research areas and problems in this

    field are:

    • Besides the core questions of the OECD-EU har-

    monized questionnaire used in the CIS-based inno-

    vation surveys, the surveys could gather infor-

    mation on a wide variety of themes of potential

    interest to researchers and policy makers. Agree-

    ment on which aspects deserve priority is important

    in order to make more effective the process of

    revising the Oslo Manual and preparing for the

    next round of the Community Innovation Survey.

    • Innovat ion surveys carried out so far have indicated

    that, to obtain comparable results, a common ques-

    tionnaire is a necessary but by no means sufficient

    condition. Survey results can be compared only if

    the statistical methodology used, including

    implementation and sampling, is harmonized.

    Efforts should be made to establish a common stat-

    istical methodology for the basic analysis of inno-

    vation data.

    • Innovation surveys do not yet provide for carrying

    out time-series comparisons. It is now feasible and

    useful to start collecting data on innovation at reg-

    ular intervals; it has been recommended that inno-

    vation surveys should be carried out every three

    years.

    • Out of the large amount of information emerging

    from the CIS surveys, it would be important to

    identify new key variables that summarize effec-

    tively the evidence provided by the survey. In parti-

    cular, variables such as the total cost of innovation,

    the share of sales due to innovative products, and

    the specific role of investment emerge as new

    major indicators derived from the CIS surveys. For

    each, it is necessary to validate their relevance and

    compare the evidence they provide with that pro-

    vided by other indicators.

    • Besides the specific quantitative indicators

    obtained, innovation surveys offer an important

    opportunity to investigate the deeper mechanisms

    of the innovation process, including the objectives

    T e ch n o va U o n o / . 6 N o . 9 4 6 3

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    D . A r c h i b u g i a n d M . P i a n t a

    pur sued , the sour ces used , the obs tac le s encoun-

    te r ed . In pa r t i cu la r , ev idence on the ob jec t ive o f

    i n n o v a t i v e e f f o r t s m a y s h e d n e w l i g h t o n t h e p r o -

    ces s by which f i r m s s e lec t innova t ions , on the i r

    qua l i ty and na tu r e , and on the i r r e la t ion to o r gan i -

    z a t iona l changes and to m a jor cu r r en t p r ob lem s ,

    s u c h a s t h e d i f f u s i o n o f i n f o r m a t i o n t e c h n o l o g y ,

    t e c h n o l o g i c a l u n e m p l o y m e n t , a n d e n v i r o n m e n t a l

    p r o tec t ion .

    F ina l ly , the r e su l t s o f the pa r a l l e l deve lopm ents in

    the f i e lds o f pa ten t and innova t ion ind ica to r s shou ld

    b e c o m p a r e d i n o r d e r t o p r o v i d e a m o r e i n t e g r a t e d

    p ic tu r e o f innov a t ive ac t iv i t i e s a t the f ir m and ind us t r y

    l e v e l . T h i s w o u l d m a k e i t p o s s i b l e t o g i v e a m o r e

    adequa te quan t i t a t ive desc r ip t ion of the cu r r en t t ech-

    no log ica l s t r a teg ie s in OECD count r i e s and thus p r o-

    v ide suppor t fo r po l i cy dec i s ions o f f i r m s and gove r n-

    m ents .

    6 . 3 r i t e n e f f i n n o v a U o n n d i c a t o r s

    The f i e ld o f innova t ion ind ica to r s r equ i r e s c lose

    i n t e r a c t i o n b e t w e e n c o n c e p t s a n d m e a s u r e s , b e t w e e n

    m ethod and theor y . I t i s expanding r ap id ly , and new

    d e v e l o p m e n t s a r e e m e r g i n g i n t h e c o n t e x t o f d i f f er e n t

    s tud ie s and d i s c ip l ines . Resea r che r s in va r ious d i s c i -

    p l ines a r e inc r eas ing ly us ing t echnology ind ica to r s in

    d i f f e r en t concep tua l con tex t s ; they r ange f r om tech-

    n o l o g i s t s a n d b u s i n e s s s p e c i a l is t s t o e c o n o m i s t s ( w h o

    s tudy f i r m s , indus t r i e s o r the m acr oeconom y) , and

    f r om lega l expe r t s conce r ned wi th the appr opr iab i l i ty

    o f i n v e n t i o n s t o p o l i c y m a k e r s i n s c i en c e , t e c h n o l o g y

    and indus t r y . They a l l m ake d i f f e r en t a s sum pt ions and

    ask d i f f e r en t ques t ions . W hi le the wide use o f t ech-

    no logy ind ica to r s shou ld be encour aged , i t i s

    im por tan t to ensu r e in te r ac t ion am ong the d i f f e r en t

    d i s c ip l ines , so a s to s t im ula te con t inu ing d i s cus s ion

    a n d p r o g r e s s i n t h e b a s i c u n d e r s ta n d i n g o f h o w t e c h -

    no logy ind ica to r s r e la te to changes in s c ience , t ech-

    n o l o g y , e c o n o m y a n d s o c i e t y . T h e r a n g e o f i n n o v a t i v e

    a c t iv i t ie s e x a m i n e d b y t e c h n o l o g y i n d i c a t o rs n e e d s t o

    b e e x p a n d e d .

    6.3 .1 Services

    W h i l e m o s t e f f o r t s s o f ar h a v e b e e n c o n f i n e d t o t h e

    m anufac tu r ing indus t r y , the CIS su r vey i s now be ing

    te s ted fo r the inc lus ion of s e r v ice indus t r i e s , which

    a r e m a jor use r s o f innova t ions , nam ely in for m a t ion

    t e c h n o l o g y . H e r e , t h e v e r y c o n c e p t o f t e c h n o l o g i c a l

    innova t ion has to be c la r i f i ed , and p r ogr es s m us t a l so

    be m ade on the c r i t e r i a fo r the c la s s i f i ca t ion of s e r -

    vice act ivi t ies .

    6 .3 .2 So f tware

    S of twar e , which r epr esen t s a m a jor a r ea o f inno-

    va t ion ac r os s m anufac tu r ing and s e r v ice indus t r i e s ,

    p r e sen t s a pa r t i cu la r p r ob lem , s ince i t i s cove r ed by

    copyr igh t r a the r than pa ten t p r o tec t ion .

    6 .3 .3 Organ i za t i ona l i nnova t i ons

    In te r e s t in the na tu r e and r e levance of o r gan iz a -

    t iona l innova t ions wi th in f i r m s and in bus ines s ne t -

    wor ks i s inc r eas ing . Im por tan t r e sea r ch ques t ions

    i n c l ud e h o w t o d e f in e a n d q u a n t i f y th e m a n d h o w t h e y

    r e la te to t echnolog ica l innova t ions .

    6 .3 .4 Use o f i nnova t i on

    S o fa r , em phas i s has been on the p r oduc t ion of

    i n n o v a t i o n s ; h o w e v e r , m o r e d a t a i s n o w b e c o m i n g

    ava i lab le on the use to wh ich they a r e pu t , pa r t icu la r ly

    i n t h e c a s e o f i n f o r m a t io n t e c h n o l o g y g o o d s a n d s er -

    v i c e s . M o r e a t t e n t i o n s h o u l d a l s o b e d e v o t e d t o t h e

    infor m a t ion tha t can be ga the r ed on the ob jec t ives and

    pr io r i t i e s o f innova t ive e f fo r t s , and , in pa r t i cu la r , on

    t h e i r i m p a c t o n e m p l o y m e n t , t h e e n v i r o n m e n t a n d

    soc ie ty .

    6 .3 .5 The chang ing bound ar i es o f t he

    irm

    W hile i t i s o f t en a s sum ed tha t the en t i r e innova t ive

    pr oces s i s ca r r i ed ou t wi th in a s ing le f i r m , innova t ing

    f i r m s in f ac t d r aw f r om a m uch b r oade r r ange of

    knowledge and ac t iv i t i e s . The boundar ie s o f innova t -

    ing f i r m s a r e in f ac t chang ing . The im por tance o f

    la r ge in - house R& D labor a to r ie s i s dec l in ing , whi le

    in te r - f i r m R& D cooper a t ion , the r o le o f sm a l l innov-

    a t ing f i r m s a f fi l i a ted to l a r ge r com pan ies , the ne tw or k

    s t r uc tu r e o f innova tor s , the c lose r l inks to un ive r s i ty

    r e sea r ch , and the g r owing in te r na t iona l d im ens ion of

    the innova t ion p r oc es s a r e inc r eas ing . M or e gene r a l ly ,

    the r ap id pace o f o r gan iz a t iona l innova t ions wi th in

    bus ines s g r oups i s a l so re shap ing the s cope and na tu r e

    of innova t ion wi th in f i r m