chapter  3
18 Pages

Innovation and Creativity in Industry and the Service Sectors


The study of innovation in industry draws on insights from several social science disciplines: economics, sociology, economic geography, political science and management. The economics of innovation developed as a subdiscipline based on the work of pioneers such as Schumpeter (1942/1975), who coined the term “creative destruction” to describe the transformation that accompanies radical innovation under capitalism. He was followed by the economists Arrow (1962), Nelson and Winter (1982), Freeman (1982), Lundvall (1992) and Metcalfe (1998).1 Sociology provides insights on power relationships between fi rms and between governments and fi rms (e.g. Orru, Woolsey-Biggart and Hamilton 1992; Smelser and Swedborg 1994). Economic geography uses location analysis to map innovation in fi rms linked in networks and clusters (Freeman 1991) and the relationships between participants in local, national and global supply chains (Sloan et al. 2005). Economic geography also examines the signifi cance of “spaces” for innovation (e.g. Piore and Sabel 1984; Saxenian 1994). Political science offers insights into public policy for industry development and the impact of regulation (Stewart 1994). The discipline of management contributes ideas about how to organise for “innovation” at the level of the fi rm and public research organisation (e.g. Granovetter 1973; Lam 2005; West and Dodgson, Chapter 12 this volume). My discussion of innovation in different industry and service sectors will draw on insights from several of these social science disciplines.