Introduction

The purpose of this chapter is to demonstrate the usefulness of applying a user– producer perspective to innovation. A set of analytical and normative propositions – which are neither trivial nor conventional – is developed by focusing on the relationships and the interaction between users and producers of innovations.

The ideas presented here reflect a collective effort. Since 1977, the research program on Innovation, Knowledge and Economic dynamics (the IKE group), consisting mainly of economists but also attracting other social scientists and engineers, at the Department of Industrial Production, Aalborg University, has been working on problems relating to industrial development, international competitiveness and technical change. The approach has been heretic rather than mainstream and eclectic rather than dogmatic. It was developed partially by importing and borrowing from some different new schools with quite disparate origins.

One of the main imports came from France, where Francois Perroux and his followers have put great emphasis on the analysis of vertically organized systems of production. Another came from the United Kingdom, where Christopher Freeman and others at the Science Policy Research Unit (SPRU) have focused on industrial innovations. In Aalborg, a new combination has been tried. Innovative activities within vertically organized units, as verticals of production, industrial complexes and national systems of production, have been analysed.

The empirical work pursued so far should be regarded as exploratory. The hypotheses tested have been crude, reflecting a certain vagueness in the theoretical framework. This chapter represents a modest attempt towards a clarification. Empirical work from the IKE group will be referred to occasionally, but no comprehensive presentation will be attempted.

In developing the argument, I have leaned heavily on some central works by Nathan Rosenberg and Kenneth Arrow. Rosenberg's analysis (1972, 1976, 1982) of how users interact with producers in specific parts of the economy and under specific historical circumstances has helped to clarify many of the problems involved. Arrow's works (1962, 1969, 1973) on uncertainty and organization theory have inspired essential parts of the conceptual framework.