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Innovation through time Kristine Bruland IAKH, UiO BI september 2014.

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Presentation on theme: "Innovation through time Kristine Bruland IAKH, UiO BI september 2014."— Presentation transcript:

1 Innovation through time Kristine Bruland IAKH, UiO BI september 2014

2 My work… “Innovation through time”, with Dave Mowery, in The Oxford Handbook of Innovation, 2005 “Technological change and British industrialisation” in The Cambridge Economic History of Modern Britain, 2007 “Technology and the spread of capitalism” with Dave Mowery, in The Cambridge History of Capitalism, 2014

3 Types of historical work Histories of specific innovations – steam engines, jet engines, metal products, machine tools etc. Histories of institutions or companies – such as histories of patent systems, organisations like Bell Labs, of the General Electric Company etc Overviews of history of technology as a whole (Joel Mokyr for example) Economic histories of specific countries or sectors

4 Why history? Why a historical approach? innovation is time consuming, based on conjectures about the future, and its outcomes typically are uncertain for long periods. Analysis of any innovation therefore requires an understanding of its history. innovative capabilities are developed over time through complex, cumulative processes of learning, often lasting centuries innovation processes are shaped by social contexts. Lazonick: “The social conditions affecting innovation change over time and vary across productive activities; hence theoretical analysis of the innovative enterprise must be integrated with historical study”.

5 The history of innovation is not a history of ‘critical innovations’ History of innovation is characterized by, complexity, reflecting the heterogeneous nature of economic activity, and diversity of processes of technology creation across sectors and countries. This makes it problematic to construct overarching stories of historical development. Nevertheless, some historians and analysts of innovation have developed taxonomies of epochs, often based on “critical technologies” that define whole periods of development. (e.g. the wave theory proposed by Schumpeter in Business Cycles). Important to challenge the historical discussions that stress the transformative effects of ‘critical innovations’. Instead, we can emphasize the complex multi-sectoral character of innovation, and hence the need to take seriously the co-existence of a range of innovation modes, institutional processes, and organizational form, across the whole economy

6 Forms of innovation change through time Changes in the structure of the innovation process in successive periods. Major dimensions of change include: 1.the changing character of economic activity, 2.changes in relevant institutions, and 3.changes in patterns of knowledge generation and flows within emergent industrial economies.

7 Chronological narrative Early innovation (1750-) – control of production by capitalist managers Spread of technology after UK removes prohibitions on machine exports in 1843 ‘Second industrial revolution’ in US and Germany (c 1870-1920) Effects of world wars Post WW2 diffusion – Japan, then SE Asia, now BRICS

8 Changing forms of innovation (1750- 2000) Three broad phases of industrialization - the ‘first industrial revolution’ in Britain, 1760-1830. - the so-called ‘second industrial revolution’ (1870-1920) - the third industrial revolution after the Second World War. the widespread appearance of shop-floor-driven technological innovation in 18 th -century Great Britain the “invention of the art of invention,” (Whitehead, 1925), in the late 19 th and early 20 th centuries, with the emergence of organized industrial R&D within the firm. the “Third Industrial Revolution” - postwar US: private and public institutions compet and collaborate in new fields of innovation.

9 Innovation in the first industrial revolution Patent data shows innovation very widely dispersed across sectors. Agriculture was the site of major innovations – ploughs, harvesters, threshers, etc. based on interchangeable parts, and codified technical manuals Food sector was very important – large-scale production of sugar, beer etc, and national distribution systems by rail. Steam was important but not widely diffused. Most textile production not powered; domestic metal products, pottery, building materials etc.

10 Forms of innovation in first industrial revolution An important aspect of innovation through time is change in the structure of the innovation systems that influence the development and spread of innovations. The “innovation system” characteristic of the First Industrial Revolution relied on a craft-oriented, trial-and-error process, in which familiarity with basic woodworking and metalworking techniques was central. Enterprises led by owner-managers who made major changes – such as Wedgwood. Demand factors appear to have influenced the upsurge of innovation on a broad front during this period - the institutional changes that laid the groundwork for growth in incomes and the expansion of markets for consumer goods were important.

11 Continuing research issues on early industrialisation Recent historical research stresses the wide distribution of innovation within the industrializing economies of the First Industrial Revolution, in many cases involving sectors overlooked by the previous historical research that has emphasized the “key sectors” of steam and textiles. This characterization of the process of technological innovation has not been sufficiently integrated into conceptual and theoretical work in innovation studies. The integration of recent historical evidence with the broader conceptual frameworks employed in the field of innovation studies represents an important task for future research.

12 An unresolved issue A key historical problem remains – currently being intensively debated. Why was northwest Europe the locus of the first transition to sustained, innovation-led growth, rather than Asia or some other region of the global economy? Much of the debate relies heavily on generalizations, mainly about capitalist institutions (property rights etc) More research on the (asserted) failure of non- European economies to make the transition to sustained economic growth during this early period is needed.

13 The “second industrial revolution” – 1870-1920 The scale and organizational complexity of the innovation system that characterizes the Second Industrial Revolution vastly greater. A new system of innovation emerged, pioneered by German and U.S. firms in the electrical-equipment and chemicals industries, characterized by organized innovation activities in large firms interacting with a public R&D infrastructure. The innovation process during this period was institutionalized within large enterprises of unprecedented scale, and, especially in the United States relied heavily on the creation of a national market of great size and homogeneity.

14 4. A “Third Industrial Revolution?” R&D and innovation during the post-1945 period The Postwar Transformation Electronics and ICT Innovation in pharmaceuticals and biotechnology A new “science base” for innovation

15 «Third» industrial revolution - after 1945 - Innovation relied much on the state the state as R&D funder and (in many cases) “first customer” in high-technology industries contributed to increased collaboration and interaction among different institutions. State actions also contributed to the spread of innovation- led development to Asia, as the military alliances and economic institutions of the post-1945 period supported the expanded international trade and capital flows. also Asian governments’ strategies for technology transfer and industrial development were of great importance.

16 Science-based innovation? Although it now is widely celebrated as a hallmark of 21 st -century “knowledge-based economies,” science- based innovation is in fact a relatively recent development. Indeed, it appears well after the institutionalization of R&D within industry in the early 20 th century in the United States and Germany. Moreover, even “high-technology” sectors such as biotechnology and semiconductors continue to rely on experimental methods that at their heart are “trial and error” approaches

17 Capitalism and technology Competition among firms has driven innovation, has facilitated the transfer of technology across borders and has promoted the diffusion of technologies among users. It has contributed to a central dimension of modern capitalism, namely the organized creation and use of knowledge. The growth of organized R&D within the firm was paralleled by the expansion of research in supporting institutions, including universities and government laboratories. Capitalist economies are organized, shaped and coordinated by national states. In early capitalism governments created economic institutions, procured new technologies, facilitated the appropriation of territory, rebuilt cities, and educated populations. Catch-up has depended on the ability to replicate these institutional changes, and to control the production and use of knowledge.

18 Limitations This discussion limited both in time and geographical coverage. the spread of industrialization beyond Germany within 19 th -century Europe the rise of the Asian economies after 1945 In the first of these cases it is important to remember that the smaller European economies, now among the wealthiest in the world, have benefited from the import and adaptation of technology during the 19 th century. Post-1945 growth of Japan and Korea was originally based on altogether different scales and types of innovative industrialization - adaptation of foreign technologies, largely in such mature industries as automobiles, steel, and shipbuilding But both of these episodes highlight the importance of broad institutional change, rather than the “strategic importance” of any single industry or technology, similarly to the three “Industrial Revolutions” described in this chapter.

19 Conclusion: no neat lessons History rarely presents neat lessons for generalization, and the historical study of innovation is no exception. The primary lessons from our historical discussion concern the heterogeneity of the innovation process across time, across sectors and across countries. Much of the surviving historical evidence that guides the historical study of innovation tends to highlight the formal and obscures the informal processes of knowledge accumulation, learning, and dissemination that underpin technological change and that contribute to its economic benefits. An important area for further research is the enrichment of our historical understanding of the informal processes for knowledge accumulation and diffusion that have been neglected in historical research

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