CAPÍTULO VI: SIMULACIONES Y CONCLUSIONES OBTENIDAS
Anexo 3: Guía del desarrollador: Simulador de la planta
Innovation Measurement: Formal R&D, Informal R&D, and Informal Innovation
The measurement of innovation has a long history (cf. Godin, 2005; Patel & Pavitt, 1995; Smith, 2005). Typically and traditionally, formalized research and development (R&D) activities are considered as a main input for innovation (e.g., Dosi, 1988; Freeman & Soete, 1997; Stoneman, 1995). Therefore, early attempts to measure innovation mainly relied on formal R&D data (OECD, 1963). Following this tradition, innovation or R&D surveys have typically focused extensively on formal R&D activities as a systematic and organized activity, which in turn leads to innovation (cf. OECD, 1963, 1997, 2002). More recently however, there is an attempt to get a better view of the knowledge production factors within a firm. For example, the recent version of the Frascati Manual defines R&D as “creative work undertaken
on a systematic basis in order to increase the stock of knowledge, including
knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications.”30 (OECD, 2002: 30, emphasis added) The idea here is to extend R&D activities to the production of new knowledge that use social sciences (e.g., law, psychology, or even mathematics) that are used in services or to shape new services. Furthermore, while this definition contends that knowledge production has to be creative work undertaken “on a systematic basis,” an important extension of the literature attempts to clarify what activities are hidden in R&D (e.g., Kleinknecht, 1987; Kleinknecht & Reijnen, 1991; Lhuillery & Templé, 1994; Santarelli & Sterlacchini, 1990).
30 In the Frascati Manual, the term R&D covers three activities: basic research, applied research and
It has been argued that particularly small firms are often unable to support a formal R&D effort and that therefore—even though ‘informal R&D’ can be carried out within the firm—the amount of R&D by small firms may be significantly underestimated in some studies (Kleinknecht, 1987, 1989; Roper, 1999; Rothwell, 1989; Schmookler, 1972). With regard to the empirical evidence of this hidden or informal R&D, Kleinknecht (1987, 1989) find that the official innovation survey (in the Netherlands) only captured about one third of the R&D performed by small firms (based on man-years). Similar results were found in an Italian survey (Archibugi et al., 1987). Kleinknecht, Poot and Reijnen (1991) show that only one third of industrial firms which conduct R&D implement a dedicated R&D department. More precisely, Santarelli and Sterlacchini (1990) report that on average 17.5% of their sample of manufacturing firms performs R&D in other (than R&D) departments only. This result is even stronger for service firms (Kleinknecht et al., 1991). Interesting to note here however is that these figures are even greater for larger firms. Moreover, a significant share of firms (about one third) declared to have less than one researcher— that is, less that one man year—conducting R&D (Kleinknecht et al., 1991; Kleinknecht & Reijnen, 1991). This share is even higher for small manufacturing and service firms, of which over 50% report less than one R&D man year.
While recognizing that conventional R&D indicators tend to underestimate the R&D investments of small firms—due to their emphasis on developmental rather than fundamental research and because this activity is often informally organized—Roper (1999) argue that significant differences exist across countries in the way R&D is organized in small firms. Based on a comparison of international survey evidence, he for example suggests that a greater degree of formality in the organization of R&D in German small firms makes the underestimation of their R&D activity less severe— relative to the U.K. In particular, while aggregate R&D figures in Germany may be underestimating the true level by 2.4%, this is as much as 13.9% in the U.K.
There are however still innovative activities that go beyond both formal and informal R&D. Some non-R&D activities that are acknowledged to play an important role in a firm’s innovation efforts and performance are for example marketing, design and engineering capabilities, training and learning (e.g., learning-by-doing), monitoring external sources of innovation, development new production facilities, acquiring of
new technologies and technical information or know-how, and organizational investment and change (e.g., Dosi, 1988; Kline & Rosenberg, 1986; OECD, 1997; Rosenberg, 1976) where some activities such as engineering can still have significant informal attributes (e.g., King, 1999; Rosenberg, 1982; Vincenti, 1990). Dosi emphasizes that “such informal effort is generally embodied in people and organizations (primarily firms) (Pavitt, 1986; Teece, 1977, 1986), and its cost is hard to trace.” (Dosi, 1988: 1125) As such types of innovation receive no direct expenditures, it remains hidden in innovation measurement efforts (Rosenberg, 1982).
The Sources of Informal Process Innovation: The Role of Learning- by-Doing and ‘On-line’ Experimentation
Given the increasing support for the idea that innovation can take place without any formal R&D resources, it is important to identify which activities lead to innovation that might be of a more informal (or hidden) nature. As far as process innovation is concerned, an important source of innovation that is fundamentally different than formal R&D is “learning-by-doing” (Arrow, 1962; Dosi, 1988; Hatch & Mowery, 1998; Jensen et al., 2007; Malerba, 1992; Rosenberg, 1982; von Hippel & Tyre, 1995). “The point here is that there are many kinds of productivity improvements, often individually small but cumulatively very large, that can be identified as a result of direct involvement in the production process. This is a source of technological innovation that is usually not explicitly recognized as a component of the R&D process, and receives no direct expenditures—which may be the reason why it is ignored.” (Rosenberg, 1982: 121-122) Still, the informal innovative activities that take place during production could have a significant impact on economic performance (Dosi, 1988; Hollander, 1965; Rosenberg, 1982).
The process by which learning-by-doing takes place can be described as a trial-and- error problem-solving or experimentation process in which the knowledge about a (technical) solution is combined with the need of the user (Thomke, 1998a, 2003; von Hippel, 1994). There is however little attention in the literature for the role of the actual users of process technology who effectively are the ones that learn by doing and thereby innovate. For example, while firms have been shown to be potential sources of innovation (cf. Enos, 1962; Hollander, 1965; von Hippel, 1988, 2005),
there are important implications for studying the inventions of a firm’s employees (e.g., production workers) as individual user innovators within that user firm. This learning by such users is often related to the need to interrupt the ongoing activity— by a process of experimentation or problem-solving (von Hippel & Tyre, 1995). Therefore, it is useful to distinct between ‘off-line’ and ‘on-line’ activities (cf. Foray, 2004: 60; Nelson, 2003). Off-line largely refers to R&D activities that are isolated (at a distance) from the regular production of goods and services, while on-line activities refer to learning during the course of production (cf. Carrillo & Gaimon, 2000; Pisano, 1994, 1996, 1997). The process of on-line innovation involves a continuing series of small experiments on the shop floor, designed to produce incremental gains in knowledge (Garvin, 1993)—in other words, on-line experimentation is at the heart of this innovation process (Foray, 2004). Our notion of informal innovation thus builds on a different concept than R&D but instead relies more on (on-line) learning and capabilities that remain hidden in other activities of the firm (cf. Cooke, 2002b; Leonard-Barton, 1988, 1992b; Tremblay, 1998).
In line with the above and with the work of von Hippel (1988, 2005), we can usefully characterize user innovation—process innovation in user firms, to be precise—as innovation that takes place within firms as users of process technology (cf. de Jong & von Hippel, 2009; Schaan & Uhrbach, 2009). In this sense, users are firms that expect to benefit from using a product or a service and they are unique in that they alone benefit directly from innovations (von Hippel, 2005). However, the more precise process and attributes of the development of process innovation in user firms is still relatively under-studied. In addition, despite a strong and growing body of literature on users as innovators, there is still a lack of systematic measurement of user innovation and of its economic impact.