I am in the process of preparing for an intensive appraisal of several sectoral innovation systems around a University of Technology in South Africa. While reading up on my old notes I discovered something written a long time ago by the late Christopher Freeman in 1987. I thought it a good idea to share this with my readers.
According to Freeman, four types of innovation can be distinguished:
- everyday, “incremental” technological change in small steps – an improvement in a production process, an improved product, a new service. It is this type of innovation that ensures that the productivity of firms will grow. Yet it does have inherent limits: even continuous improvements were, for instance, unable to prevent the replacement of sailing ships by steam ships;
- technological breaks due to radical innovations, which alter the course of development of an entire industry – the introduction of the zipper, nuclear technology, or electronic word-processing systems are examples;
- changes in a technical system that affect more than one industry; one example is the success of plastics;
- changes in a techno-economic paradigm – new technologies prevail throughout entire societies, new industries emerge, old industries lose significance, conventional organizational patterns are invalidated. This type proceeds from the long-wave theory.
This is an important reminder that I have to design my process to be sensitive to these different kinds of change within technological systems!
Shawn, is the change of a technical system not very much the basis for a radical change? I just listened to a Peter Day podcast where an interviewee mentions that large companies are normally not able to follow radical innovations in the first place because their strategy of competitiveness at their size ist mainly to stay competitive through increase of efficiency or incremental innovations but quicker than others. Efficiency and scale is here the main issue. Although there are many firms with their R&D departments who integrate radical research innovations I liked the further distinction in which the increase of efficiency (incremental innovation) is much linked to large companies and the radical part rather to spin offs or smaller companies.