This handbook looks to provide academics and students with a comprehensive and holistic understanding of the phenomenon of innovation. Innovation spans a number of fields within the social sciences and humanities: Management, Economics, Geography, Sociology, Politics, Psychology, and History. Consequently, the rapidly increasing body of literature on innovation is characterized by a multitude of perspectives based on, or cutting across, existing disciplines and specializations. Scholars of innovation can come from such diverse starting points that much of this literature can be missed, and so constructive dialogues missed. The editors of The Oxford Handbook of Innovation have carefully selected and designed twenty-one contributions from leading academic experts within their particular field, each focusing on a specific aspect of innovation. These have been organized into four main sections, the first of which looks at the creation of innovations, with particular focus on firms and networks. Section Two provides an account of the wider systematic setting influencing innovation and the role of institutions and organizations in this context. Section Three explores some of the diversity in the working of innovation over time and across different sectors of the economy, and Section Four focuses on the consequences of innovation with respect to economic growth, international competitiveness, and employment. An introductory overview, concluding remarks, and guide to further reading for each chapter, make this handbook a key introduction and vital reference work for researchers, academics, and advanced students of innovation. Contributors to this volume - Jan Fagerberg, University of Oslo William Lazonick, INSEAD Walter W. Powell, Stanford University Keith Pavitt, SPRU Alice Lam, Brunel University Keith Smith, INTECH Charles Edquist, Linkoping David Mowery, University of California, Berkeley Mary O'Sullivan, INSEAD Ove Granstrand, Chalmers Bjorn Asheim, University of Lund Rajneesh Narula, Copenhagen Business School Antonello Zanfei, Urbino Kristine Bruland, University of Oslo Franco Malerba, University of Bocconi Nick Von Tunzelmann, SPRU Ian Miles, University of Manchester Bronwyn Hall, University of California, Berkeley Bart Verspagen , ECIS Francisco Louca, ISEG Manuel M. Godinho, ISEG Richard R. Nelson, Mario Pianta, Urbino Bengt-Ake Lundvall, Aalborg

The Oxford Handbook of Innovation

The Rise of the Creative Class

Porter and Ketels' (2003) study of British competitiveness emphasised the importance of business networking for innovativeness. Until recently insights into the dynamics of this relationship have been fragmented. This paper presents a systematic review of research linking the networking behaviour of firms with their innovative capacity. We find that the principal benefits of networking as identified in the literature include, risk sharing; obtaining access to new markets and technologies; speeding products to market; pooling complementary skills; safeguarding property rights when complete or contingent contracts are not possible; and acting as a key vehicle for obtaining access to external knowledge. The evidence also illustrates that those firms which do not cooperate and which do not formally or informally exchange knowledge limit their knowledge base on a long-term basis and ultimately reduce their ability to enter into exchange relationships. At an institutional level, national systems of innovation play an important role in the diffusion of innovations in terms of the way in which they shape networking activity. The paper provides evidence suggesting that network relationships with suppliers, customers, and intermediaries such as professional and trade associations are important factors affecting innovation performance and productivity. Where networks fail it is due to inter-firm conflict, displacement, lack of scale, external disruption and lack of infrastructure. The review identifies several gaps in the literature that need to be filled. For instance, there is a need for further exploration of the relationship between networking and different forms of innovation, such as, process and organisational innovation. Similarly, we need better understanding of network dynamics and network configurations, as well as the role of third parties such as professional and trade associations. Our study highlights the need for inter-disciplinary research in these areas.

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Networking and innovation: a systematic review of the evidence

Corruption and Growth

Commentators suggest that to survive in developed economies manufacturing firms have to move up the value chain, innovating and creating ever more sophisticated products and services, so they do not have to compete on the basis of cost. While this strategy is proving increasingly popular with policy makers and academics there is limited empirical evidence to explore the extent to which it is being adopted in practice. And if so, what the impact of this servitization of manufacturing might be. This paper seeks to fill a gap in the literature by presenting empirical evidence on the range and extent of servitization. Data are drawn from the OSIRIS database on 10,028 firms incorporated in 25 different countries. The paper presents an analysis of these data which suggests that: [i] manufacturing firms in developed economies are adopting a range of servitization strategies—12 separate approaches to servitization are identified; [ii] these 12 categories can be used to extend the traditional three options for servitization—product oriented Product–Service Systems, use oriented Product–Service Systems and result oriented Product–Service Systems, by adding two new categories “integration oriented Product–Service Systems” and “service oriented Product–Service Systems”; [iii] while the manufacturing firms that have servitized are larger than traditional manufacturing firms in terms of sales revenues, at the aggregate level they also generate lower profits as a % of sales; [iv] these findings are moderated by firm size (measured in terms of numbers of employees). In smaller firms servitization appears to pay off while in larger firms it proves more problematic; and [v] there are some hidden risks associated with servitization—the sample contains a greater proportion of bankrupt servitized firms than would be expected.

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Exploring the financial consequences of the servitization of manufacturing

The concept of cluster has emerged as a central idea in competitiveness and economic development over the last decade. This Cluster Initiatives Greenbook assembles, for the first time, survey evidence on a large sample of cluster initiatives. This data allows an analysis of the different shapes of cluster initiatives, how they evolve over time, and some of the factor that appear to influence their success and failure.

The Cluster Initiative Greenbook

UK Competitiveness: moving to the next stage

Competitiveness has become a central preoccupation of both advanced and developing countries in an increasingly open and integrated world economy. Despite its acknowledged importance, the concept of competitiveness is often misunderstood. Here, we define competitiveness concretely, show its relationship to a nation's standard of living, and outline a conceptual framework for understanding its causes. The Business Competitiveness Index (BCI), based on this conceptual framework, provides a data-rich approach to measuring and analyzing the fundamental competitiveness of a large number of countries in a comparative context .This year's BCI includes 101 countries, up from 80 last year. Our aim is to rank country competitiveness across countries, identify individual countries' competitive strengths and weaknesses, reveal the trends in competitiveness in the global economy, and extend our basic knowledge about the sources of competitiveness and the process of economic development. Most discussion of competitiveness and economic development is still focused on the macroeconomic, political , legal, and social circumstances that underpin a successful economy. It is well understood that sound fiscal and monetary policies, a trusted and efficient legal system, a stable set of democratic institutions, and progress on social conditions contribute greatly to a healthy economy. However, these broader conditions are necessary but not sufficient.They provide the opportunity to create wealth but do not themselves create wealth.Wealth is actually created at the microeconomic level of the economy, rooted in the sophistication of actual companies as well as in the quality of the microeconomic business environment in which a nation's firms compete. Unless these microeco-nomic capabilities improve, macroeconomic, political, legal, and social reforms will not bear full fruit. Beginning in 1998, we began an effort to examine statistically the microeconomic foundations of competitiveness and prosperity across a wide array of countries. This is a daunting task, given the need to measure and compare the complex array of national circumstances that support a high and sustainable level of productivity.The effort aims to move beyond the examination of broad, aggregate variables typical of most economic growth analyses, and provide a framework for countries and companies to understand their detailed competitive strengths and weaknesses. It also aims to be as rigorous as possible, verifying the importance of variables statistically and using statistical techniques to weight the contribution of individual variables. Finally, we know that improvement in competitiveness is not a simple linear process but one where nations at different levels of development face different challenges and …

The Microeconomic Foundations of Prosperity: Findings from the Business Competitiveness Index

We define foundational competitiveness as the expected level of output per working-age individual that is supported by the overall quality of a country as a place to do business. The focus on output per potential worker, a broader measure of national productivity than output per current worker, reflects the dual role of workforce participation and output per worker in determining a nation's standard of living. Our framework highlights three broad and interrelated drivers of foundational competitiveness: social infrastructure and political institutions, monetary and fiscal policy, and the microeconomic environment. We estimate this framework using multiple data sets covering more than 130 countries over the 2001-2008 period. We find a positive and separate influence of each driver on output per potential worker. The microeconomic environment has a positive effect on output per potential worker even after controlling for historical legacies. Using our framework we define a new concept, global investment attractiveness, which is the cost of factor inputs relative to a country's competitiveness. This analysis reveals important insight into the economic trajectory of individual countries. Our framework also offers a novel methodology for the estimation of a theoretically grounded and empirically validated measure of national competitiveness.

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The determinants of national competitiveness

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Christian H.M. Ketels

Papers

The Cluster Initiative Greenbook

UK Competitiveness: moving to the next stage

The Microeconomic Foundations of Prosperity: Findings from the Business Competitiveness Index

The determinants of national competitiveness

The Development of the cluster concept - present experiences and further developments