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The Linear Model of Innovation

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Abstract

One of the first (conceptual) frameworks developed for understanding the relation of science and technology to the economy has been the linear model of innovation. The model postulated that innovation starts with basic research, is followed by applied research and development, and ends with production and diffusion. The precise source of the model remains nebulous, having never been documented. Several authors who have used, improved, or criticized the model in the past fifty years rarely acknowledged or cited any original source. The model usually was taken for granted. According to others, however, it comes directly from V. Bush’s Science: The Endless Frontier ([1945] 1995). This article traces the history of the linear model, suggesting that it developed in three steps corresponding to three scientific communities looking at science analytically. The article argues that statistics is a main reason the model is still alive despite criticisms, alternatives, and having been proclaimed dead.

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Die Forschung zur Innovationspolitik ist vielfältig. Sie reflektiert den Verlauf abstrakter Diskurse der Innovationsforschung und der politischen Ökonomie. Angelsächsische und institutionalistische Ansätze prägen den Diskurs. Dabei weichen lineare Modelle von Innovationsprozessen zunehmend komplexeren Ansätzen wie denen zu Innovationssystemen oder „triple-helices“. Auch die Bedeutung von Ideen und Diskursen für den policy-Prozess erhält zunehmend Aufmerksamkeit.
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Location of new products, 191. — The maturing product, 196. — The standardized product, 202.
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Introduction, 97. — I. The propensity to develop pure science, 98. — II. The propensity to invent, 102. — III. The propensity to innovate, 105. — IV. The propensity to finance innovation, 108. — V. The propensity to accept innovations, 110.
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I. Introduction, 417. — II. Industrial research and development: invention and innovation, 418. — III. Schumpeter's theory of innovation, 421. — IV. Conclusion: innovation a normal business procedure, 427.
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Introduction, 596. — Innovation and technological change, 597. — Invention and innovation, 599. — Summary and conclusions, 605.
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Industrial research is acclaimed as the motor of contemporary American economic growth. This paper discusses several recent histories of corporate laboratories and industrial research by explicating common themes and assumptions. Alfred D. Chandler's work on business organization in late nineteenth-century America is the interpretative framework used in two recent and important histories - Leonard Reich's The Making of American Industrial Research: Science and Business at GE and Bell, 1876-1926, and George Wise's Willis R. Whitney, General Electric, and the Origins of US Industrial Research. Both works provide rich accounts concerning the reasons why firms invested in research laboratories. Both also reveal the problems inherent in using Robert Merton's sociology of scientists in discussions of researchers working outside of the discipline-oriented university. The remainder of the paper replaces the normative sociological framework found in these recent histories with an analysis that locates the first corporate laboratories within the history of late-nineteenth- and early twentieth-century American science.
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Today the far-seeing industrialist no longer relies solely on the accumulated knowledge of the workers in his own factory, or even those in his own industry and on the chance possibilities of their producing new knowledge at a rate that will meet the needs of industrial expansion, but he sets up organizations for scientific research ... (Sir Arthur Fleming, 1928).1
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Basic research is a central concept of science and science policy. This article examines the role statistics played in helping to create the concept and shows how it was in part constructed by statistics to serve social and political agendas. Most of this statistical work was conducted in the United States in the 1940s and 1950s, then standardized by the OECD in the 1960s.
Book
Getting an innovation adopted is difficult; a common problem is increasing the rate of its diffusion. Diffusion is the communication of an innovation through certain channels over time among members of a social system. It is a communication whose messages are concerned with new ideas; it is a process where participants create and share information to achieve a mutual understanding. Initial chapters of the book discuss the history of diffusion research, some major criticisms of diffusion research, and the meta-research procedures used in the book. This text is the third edition of this well-respected work. The first edition was published in 1962, and the fifth edition in 2003. The book's theoretical framework relies on the concepts of information and uncertainty. Uncertainty is the degree to which alternatives are perceived with respect to an event and the relative probabilities of these alternatives; uncertainty implies a lack of predictability and motivates an individual to seek information. A technological innovation embodies information, thus reducing uncertainty. Information affects uncertainty in a situation where a choice exists among alternatives; information about a technological innovation can be software information or innovation-evaluation information. An innovation is an idea, practice, or object that is perceived as new by an individual or an other unit of adoption; innovation presents an individual or organization with a new alternative(s) or new means of solving problems. Whether new alternatives are superior is not precisely known by problem solvers. Thus people seek new information. Information about new ideas is exchanged through a process of convergence involving interpersonal networks. Thus, diffusion of innovations is a social process that communicates perceived information about a new idea; it produces an alteration in the structure and function of a social system, producing social consequences. Diffusion has four elements: (1) an innovation that is perceived as new, (2) communication channels, (3) time, and (4) a social system (members jointly solving to accomplish a common goal). Diffusion systems can be centralized or decentralized. The innovation-development process has five steps passing from recognition of a need, through R&D, commercialization, diffusions and adoption, to consequences. Time enters the diffusion process in three ways: (1) innovation-decision process, (2) innovativeness, and (3) rate of the innovation's adoption. The innovation-decision process is an information-seeking and information-processing activity that motivates an individual to reduce uncertainty about the (dis)advantages of the innovation. There are five steps in the process: (1) knowledge for an adoption/rejection/implementation decision; (2) persuasion to form an attitude, (3) decision, (4) implementation, and (5) confirmation (reinforcement or rejection). Innovations can also be re-invented (changed or modified) by the user. The innovation-decision period is the time required to pass through the innovation-decision process. Rates of adoption of an innovation depend on (and can be predicted by) how its characteristics are perceived in terms of relative advantage, compatibility, complexity, trialability, and observability. The diffusion effect is the increasing, cumulative pressure from interpersonal networks to adopt (or reject) an innovation. Overadoption is an innovation's adoption when experts suggest its rejection. Diffusion networks convey innovation-evaluation information to decrease uncertainty about an idea's use. The heart of the diffusion process is the modeling and imitation by potential adopters of their network partners who have adopted already. Change agents influence innovation decisions in a direction deemed desirable. Opinion leadership is the degree individuals influence others' attitudes
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This article reviews a number of models of the process of technological innovation and identtities the important elements involved. Although no universal model is applicable to all processes of technological innovation, given the importance of technology in the long-tern strategy of research-intensive trns , a knowledge of the elements involved in the process is essential to today's managers. Models of the process of innovation must be developed contingent upon thejirn's needs. The critical factors, which must be conszdered when developing such a model, are identified.
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This paper presents some research conclusions as a number of “propositions” about technological innovation which are intended mainly for managers of business and government institutions. The author claims that western nations are foregoing great opportunities by taking a short term view. In particular, he believes that screening is done at too early stage, administrators and managers fail to realise the long time span of the innovative process, and there is a widespread assumption that government agencies must only support “sure-winners”.
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Not only is technology changing rapidly, but the process of the commercialisation of technological change—the industrial innovation process—is changing also. The paper traces developments in the dominant perceived model of industrial innovation from the simple linear ‘technology push’ and ‘need pull’ models of the 1960s and early 1970s, through the ‘coupling model’ of the late 1970s to early 1980s, to the ‘integrated’ model of today. The latter (the 4th Generation innovation process) marked a shift from perceptions of innovation as a strictly sequential process to innovation perceived as a largely parallel process. This shift owed much to observations of innovation processes in leading Japanese corporations. Recent developments indicate the possibilities attainable in the proposed ‘strategic integration and networking’ model, elements of which are already in place. According to this 5th generation model, innovation is becoming faster; it increasingly involves inter-company networking; and it employs a new electronic toolkit (expert systems and simulation modelling).
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Schumpeter first reviews the basic economic concepts that describe the recurring economic processes of a commercially organized state in which private property, division of labor, and free competition prevail. These constitute what Schumpeter calls "the circular flow of economic life," such as consumption, factors and means of production, labor, value, prices, cost, exchange, money as a circulating medium, and exchange value of money. The principal focus of the book is advancing the idea that change (economic development) is the key to explaining the features of a modern economy. Schumpeter emphasizes that his work deals with economic dynamics or economic development, not with theories of equilibrium or "circular flow" of a static economy, which have formed the basis of traditional economics. Interest, profit, productive interest, and business fluctuations, capital, credit, and entrepreneurs can better be explained by reference to processes of development. A static economy would know no productive interest, which has its source in the profits that arise from the process of development (successful execution of new combinations). The principal changes in a dynamic economy are due to technical innovations in the production process. Schumpeter elaborates on the role of credit in economic development; credit expansion affects the distribution of income and capital formation. Bank credit detaches productive resources from their place in circular flow to new productive combinations and innovations. Capitalism inherently depends upon economic progress, development, innovation, and expansive activity, which would be suppressed by inflexible monetary policy. The essence of development consists in the introduction of innovations into the system of production. This period of incorporation or adsorption is a period of readjustment, which is the essence of depression. Both profits of booms and losses from depression are part of the process of development. There is a distinction between the processes of creating a new productive apparatus and the process of merely operating it once it is created. Development is effected by the entrepreneur, who guides the diversion of the factors of production into new combinations for better use; by recasting the productive process, including the introduction of new machinery, and producing products at less expense, the entrepreneur creates a surplus, which he claims as profit. The entrepreneur requires capital, which is found in the money market, and for which the entrepreneur pays interest. The entrepreneur creates a model for others to follow, and the appearance of numerous new entrepreneurs causes depressions as the system struggles to achieve a new equilibrium. The entrepreneurial profit then vanishes in the vortex of competition; the stage is set for new combinations. Risk is not part of the entrepreneurial function; risk falls on the provider of capital. (TNM)