ABSTRACT
The 1996 European Commission Green Paper on Innovation (European Commission 1996) was published shortly before the work on which this study is based was commissioned. In 1994, the European Commission White Paper, Growth, Competitiveness, Employment, had also been published (European Commission 1994). This placed significant emphasis on the impacts of research and technological development on employment, incomes, economic organization and competitiveness. Many of the constituent governments of the EU presented similar analyses during the 1990s, as will be evident in later chapters. The Green Paper adopted a very broad definition of innovation: ‘the successful production, assimilation and exploitation of novelty in the economic and social spheres’ (European Commission 1996: 9). It nevertheless particularly emphasized Europe’s failure to exploit its traditional scientific and technological ingenuity, and the inadequacies of investment and coordination in research and development (R&D) activities. Priority was therefore given to scientific and technical skills, and the leading role of technology in driving economic change (ibid.: 12-13). As was pointed out, the term ‘innovation’ is used to describe both a process, transforming ideas for new products, services, or ways of creating them into reality, and the results of this process, marked by the successful establishment of the novelty in the market. The process of innovation is nowadays understood to be more complex than was often perceived in the past, and its market impact also involves a much wider array of changes than those primarily dependent on new technologies alone.
For any business to survive in modern competitive conditions, it is not enough for current patterns of production to be successful. Support for process and product innovation in anticipation of changing market conditions must now be a core organizational function. The creation of new products, services and processes requires continuous self-criticism and active organizational learning (Tushman and Nadler 1986). Innovation takes many forms, acting simultaneously within the same firm and affecting various processes
and products through overlapping time periods. Much is incremental, building on established methods and ideas. This depends not only on technical R&D for success but also changes in organization, human resources and marketing. Many important innovations are synthetic, exploiting new combinations of established ideas and technologies. The successful development and application of entirely new ideas, technologies or products, termed discontinuous innovation, is rarer and more risky, although it may eventually reap major rewards.
