ABSTRACT
A number of writers have pointed to the limitations of thinking about the innovation process as one of rational design and they argue for a perspective that harks back to Schumpeter’s work. For example, population ecology theorists (Hannan and Freeman, 1977) claim that rules of competition are not set by an individual organization but are established in the adaptive interaction between organizations within the wider population of organizations. New entrepreneurial businesses may build up a configuration of resources and competencies, and competitive selection will soon sort out the most successful from the others. Leading organizations emerge, to be mimicked by others. However, complacency and inertia soon establish a trajectory that constrains individual organizations, making it extremely difficult for them to change. As industries continue to evolve with the appearance of new entrepreneurial organizations, the older ones are weeded out by competitive selection. From this evolutionary perspective, it is whole populations of organizations that change through competitive selection applied to both emerging new individual organizations and to old ones that have become stuck and eventually suffer extinction. This is very much in line with Schumpeter’s “gales of creative destruction” and it reflects the Adaptionist Teleological framework of his way of thinking. However, this perspective has not become part of mainstream thinking about innovation, probably because of the very limited role it gives to managerial choice. Strategic choice theory argues that individual organizations may get stuck in states of inertia but that they do have the capacity to choose changes. For them, change takes place at the level of the organization and it is these changes that change the population of organizations.
