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The sources of innovation
297
Book reviews Eric von Hippel, The Sources of Innovation ford University Press, 1988).
(Ox-
Eric von Hippel has made significant contributions over the past fifteen years to our understanding of the sources and determinants of innovations. His demonstration in the 1970s of the significant role of users in the development of scientific instrument innovations has become an important landmark in the development of innovation studies. Since then, he has worked with his postgraduate students to develop and extend this research. He has discovered considerable differences amongst product groups in the relative contributions to innovation by manufacturers, their suppliers and their customers, and has set out to explain why. He has concluded that the variations have an economic explanation, and are the result of expected differences in the economic rents (or profits) to be reaped by developing and manufacturing the innovations. This in turn depends on the ability of firms to maintain, and benefit from, innovative leads over their competitors. This book brings together the results of this research, a significant proportion of which was first subjected to critical scrutiny and publication in this journal (see, in particular, Volumes 5, 7, 11 and 16). The sequence of the chapters reflects the development of his thinking over time. The book ends with a discussion of applications for innovation management, and has the considerable merit of including, as Appendices, the detailed innovation histories on which the research was based. It will be invaluable to students of science and technology policy, management, and economics, interested in the determinants of patterns of technological development. It will also be useful to practicing managers, grappling with decisions about how they position themselves, in relation to their customers and suppliers, in identifying the innovations that they should develop, those that they
Research Policy 18 (1989) 297-306 North-Holland 0048-7333/89/$3.50
0 1989, Elsevier Science Publishers
should manufacture, and those that they should leave to others. Von Hippel makes a centrally important point about the locus of development of a firm’s production technology. The choice between in-house development and purchase from a supplier will depend not simply on the capacity of suppliers to exploit economies of scale and specialisation, but also on the firm’s ability to keep an innovative lead over its competitors: in other words, decisions will depend on dynamic as well as static factors. It is to be hoped that Von Hippel and other scholars will also explore the dynamic implications of an important, but rather more complicated, case - namely, a potentially pervasive production technology (such as computer aided design or robots) with many innovative users and the consequent impossibility of any one firm keeping things secret for long. Rosenberg has suggested (in Chapter 1 of Perspectives on Technoloa, Cambridge University Press, 1976) that, under such circumstances, a policy of at least some technological reliance on specialised suppliers, serving many innovative customers, may be the most appropriate one. Keith Pavitt SPRU University of Sussex
J. Liebenau (Ed.), The Challenge of New Technology (Gower, 1988) pp. 150, E23.50. The purpose of this volume, the fourth in the Gower Business History Series, is more ambitious than its modest size would suggest. While the common thematic thread is provided by Britain’s response to the challenge of new technology in the age of science-based industry, the authors’ aim is also to lay guidelines for a reinterpretation of technical innovation in general. As Jonathan Liebenau points out in his introduction, the papers attempt to inject an historical perspective into the analysis of technical change. They do so by ex-
B.V. (North-Holland)
Book reviews Eric von Hippel, The Sources of Innovation ford University Press, 1988).
(Ox-
Eric von Hippel has made significant contributions over the past fifteen years to our understanding of the sources and determinants of innovations. His demonstration in the 1970s of the significant role of users in the development of scientific instrument innovations has become an important landmark in the development of innovation studies. Since then, he has worked with his postgraduate students to develop and extend this research. He has discovered considerable differences amongst product groups in the relative contributions to innovation by manufacturers, their suppliers and their customers, and has set out to explain why. He has concluded that the variations have an economic explanation, and are the result of expected differences in the economic rents (or profits) to be reaped by developing and manufacturing the innovations. This in turn depends on the ability of firms to maintain, and benefit from, innovative leads over their competitors. This book brings together the results of this research, a significant proportion of which was first subjected to critical scrutiny and publication in this journal (see, in particular, Volumes 5, 7, 11 and 16). The sequence of the chapters reflects the development of his thinking over time. The book ends with a discussion of applications for innovation management, and has the considerable merit of including, as Appendices, the detailed innovation histories on which the research was based. It will be invaluable to students of science and technology policy, management, and economics, interested in the determinants of patterns of technological development. It will also be useful to practicing managers, grappling with decisions about how they position themselves, in relation to their customers and suppliers, in identifying the innovations that they should develop, those that they
Research Policy 18 (1989) 297-306 North-Holland 0048-7333/89/$3.50
0 1989, Elsevier Science Publishers
should manufacture, and those that they should leave to others. Von Hippel makes a centrally important point about the locus of development of a firm’s production technology. The choice between in-house development and purchase from a supplier will depend not simply on the capacity of suppliers to exploit economies of scale and specialisation, but also on the firm’s ability to keep an innovative lead over its competitors: in other words, decisions will depend on dynamic as well as static factors. It is to be hoped that Von Hippel and other scholars will also explore the dynamic implications of an important, but rather more complicated, case - namely, a potentially pervasive production technology (such as computer aided design or robots) with many innovative users and the consequent impossibility of any one firm keeping things secret for long. Rosenberg has suggested (in Chapter 1 of Perspectives on Technoloa, Cambridge University Press, 1976) that, under such circumstances, a policy of at least some technological reliance on specialised suppliers, serving many innovative customers, may be the most appropriate one. Keith Pavitt SPRU University of Sussex
J. Liebenau (Ed.), The Challenge of New Technology (Gower, 1988) pp. 150, E23.50. The purpose of this volume, the fourth in the Gower Business History Series, is more ambitious than its modest size would suggest. While the common thematic thread is provided by Britain’s response to the challenge of new technology in the age of science-based industry, the authors’ aim is also to lay guidelines for a reinterpretation of technical innovation in general. As Jonathan Liebenau points out in his introduction, the papers attempt to inject an historical perspective into the analysis of technical change. They do so by ex-
B.V. (North-Holland)