Geography Reference
In-Depth Information
These problems can be generalized into four main categories. The first, and usually
most important, stems from
technical problems,
a result of the limited experience
and knowledge of a person or firm in carrying out the procedures needed, espe-
cially if the processes are complex. Indeed, the greater the complexity involved,
the greater the uncertainties involved. So the inventor or innovator needs a good
understanding and grounding in the appropriate knowledge field, or has access to
it. This, in turn, is critically influenced by educational systems that stress original
and critical thinking, as well as co-operative working. A second set of problems is
associated with the
market
, such as whether there is a real demand for the product
or process and, if the product is commercialised, whether the selling price will make
sufficient profit to justify its development.
A third, but frequently crucial type of uncertainty, consists of the availability of
various
producer services
to support the innovation at each development stage. This
requires access to experience and knowledge from outside the firm, so that loca-
tional contiguity becomes an advantage. An especially crucial service requirement
is venture finance, not simply to enable the initial invention to be translated into the
first stage of innovation, but also to subsequently support what is often a long phase
of product development. The availability of private venture capital was certainly
crucial to the success of electronic innovations that developed in Silicon Valley
(O'Mara
2005
) whereas the Route 128 firms around Boston were more dependent
on government support and linkages (Mackun
2013
). Senor and Singer's (
2009
)
penetrating study of the growth of Israel's high technology sector has shown it was
helped by a per capita venture capital amount that was 2.5 times that of the U.S.A.
and over 30 times that of Europe. However the close university-business linkages in
Israel, helped by the small size of the country and many military contracts, has been
influential in making it easier to develop personal contacts. Also, compulsory mili-
tary service gave young adults experience with technical work. Israel's educational
system also helped since it emphasises critical thinking and challenging existing
issues, features that stem from the Telmudic tradition of discussion in Judaism. The
ability to find adequate finance is a crucial requirement, but even that is not enough.
The later stages of the innovative process require the use of quality producer ser-
vices, such as designers, lawyers, advertising and marketing experts. So innovation
is a process involving many stages and inputs and is not a single inventive act.
Finally, there are uncertainties due to the many
resistances or barriers
that im-
pede innovation. One comes from a culture of negativity to inventors or innovations
within some firms, due to the costs involved, ignorance of opportunities, or deci-
sions to resist developing an invention, perhaps because of a perceived negative
impact on the main product. A classic example was the decision of Kodak not to
produce digital cameras, which it had initially pioneered but had not developed
and marketed. It led other firms to produce the product which now dominates the
camera market. Other barriers come from regulations, whether laws, planning re-
quirements, or even local customs; each of these problems may also critically hin-
der one or more of the stages of innovation development, or prevent the use of the
product or process. To take one example, Jaffe and Lerner (
2004
) have vigorously
argued that the 1980 changes in the U.S. patent system created a barrier to inven-
