Innovation Economics, Engineering and Management Handbook 1

In new approaches to innovation, the entrepreneur and the company are studied through their skills and their function of resource creation. Gradual or radical innovation thus becomes endogenous and is integrated into a complex process characterized by a lot of feedback and interactions in production and marketing networks: clusters, sectors and territorial or national innovation systems. The innovative organization is presented as a dynamic system composed of specific and diversified skills. Through the acquisition, combination and mobilization of these competencies, the innovator (entrepreneur or organization) can create technological resources and evolve the relationships it maintains with its environment. This explains the importance of design, application and development management in the implementation of an innovation process. An innovation system (sectoral, territorial or national) mobilizes a set of knowledge and skills resulting from learning processes and integrated into its memory. This knowledge must be enriched in order to be valorized by technological, organizational and commercial innovation. The survival of the system depends on its capacity to innovate, which enables it to face external aggressions, to transform and endure. External stimuli (competition, product substitutability, innovation policies, etc.) are generated by the economic context and affect the means of selection of entrepreneurs, companies and other public or private institutions. Selection procedures are shaped by the business climate: the nature of the product market, the availability of capital and labor, the pace of innovation, the effects of public policies, etc. They can, therefore, create alternatives to the mode of operation, management and production of a given firm (of an organization or, more generally, of a particular innovation system). It is thus clear that the effectiveness of innovation management is highly dependent on the internal capacity to seize external opportunities. The authors of this book repeatedly stress that innovation is part of the dynamic growth model based on uncertainty, risk and profit. The “flaws” that characterize an economic system are, however, important sources of opportunities for investment, production and the diffusion of innovations.

The richness of this book is the result of the reflections developed within the Research Network on Innovation (RNI) and carefully selected to take into account current and historical analyses, the relationship between technological mutations and social change, and the presentation and perspective of management, strategies and innovation policies. The authors are among the most eminent specialists of the Network, whose main objectives are the study of innovation processes in today’s information and knowledge society, the analysis of the intensification of links between the worlds of research and business, and the examination of the modes of appropriation and management of innovation by companies from a global as well as local or sectoral perspective. The Network has more than 1,500 researchers in 36 countries specializing in the multidisciplinary study of innovation: economics, management, engineering, sociology, history, law, epistemology, anthropology and psychology of the innovator.

The guiding principle of the studies presented in the two volumes allows us to understand the systemic nature of innovations and to reflect on their potential for dissemination and application, to study how innovations question our categories of thought and challenge the traditional mapping of knowledge... to think about the meaning of innovation.

This book is the continuation of a set of books dedicated to the study of innovation in the “Innovation in Engineering and Technology” Set published by ISTE and Wiley:

– Innovation Engines: Entrepreneurs and Enterprises in a Turbulent World (2017).

– Science, Technology and Innovation Culture (2018);

– Collective Innovation Processes: Principles and Practices (2018);

Divided across two volumes, it is composed of four long chapters on epistemology, economics, management and engineering that trace the contours of the holistic conception of innovation and continues with 81 shorter chapters that present and discuss, according to the sensitivity of their authors, the key notions associated with the studies of innovation. Note that the last chapter of Volume 1 on “X-Innovation” is devoted to highlighting the complexity of the concept in order to open perspectives for future research on innovation.

We would like to thank our colleagues Sophie Boutillier (University of the Littoral Opal Coast), Thierry Burger-Helmchen (University of Strasbourg), Vanessa Casadella (University of Picardie), Joëlle Forest (National Institution of Applied Sciences, Lyon), Michaël Laviolette (University of Lyon), Laure Morel (University of Lorraine), Francesco Schiavone (Parthenope University of Naples), Bérangère Szostak (University of Lorraine) and Corinne Tanguy (AgroSup-Dijon) for their contribution to the conception of this book.

We express our gratitude to our colleague Laurent Adatto for his contribution to the finalization of this important project.

Finally, it is important to mention the contribution of our colleague Blandine Laperche, President of the Research Network on Innovation, to the realization of this project. We express our gratitude and best wishes to her.

Introduction written by Dimitri UZUNIDIS and Fedoua KASMI.

Capitalism cannot and will never be stationary, Schumpeter once said. In a process of “creative destruction”, the technologies of the present become obsolete, while innovations emerge and feed new economic cycles. Economic history (Braudel 1979) clearly shows new combinations of production factors: products, production processes, sources of raw materials and semi-finished products, organization of work and markets. In short, innovations have fueled economic growth. Since the 18th century, a number of economists, such as A. Smith, J.B. Say, D. Ricardo, T.R. Malthus, K. Marx, etc., have provided the conceptual bases on which the economic theories of innovation have been developed.

Innovation economics was born in the wake of the industrial economy, in the aftermath of World War II. The neoclassical approach first considered technical progress as an exogenous phenomenon, a residue of the production function in models of economic growth (Solow 1956, 1957), and the economists were mainly interested in its effects on the economy, especially on employment. But the recognition of its role in economic growth and evolution, in the wake of the work of J.A. Schumpeter, led them to study in greater detail the mechanisms of its genesis, at the micro, meso and macro levels.

The evolutionary theories initiated by R. Nelson and S. Winter (1982) focus on the genesis of innovation within organizations. They see it as a systemic phenomenon, resulting from the interaction between actors within organizations (giving rise, through learning, to organizational routines, a source of change and inertia), as well as resulting from fruitful interactions between organizations and institutions (analyses in terms of innovation systems at different scales: local, regional, national, sectoral). A country, like a company, is situated, in its development, on a technological trajectory that largely conditions its capacity to assimilate new technologies.

For their part, endogenous growth theories (Romer 1994) study technical progress as the result of private and public investment in the sphere of the economy, particularly in knowledge, infrastructure and human capital. Private investments are made by individuals motivated by profit. Economic growth is then determined by the behavior of economic agents and macroeconomic factors. The field of public policy then becomes paramount, and theoretical work calls for the replacement of big scientific and technical programs that marked the post-war period by more indirect modes of intervention. They are based, on the one hand, on the framework conditions for innovation (by strengthening the components and interactions within innovation systems), and, on the other hand, on incentives to invest and innovate, particularly for firms. This results in positive externalities, which can be seen as the basis for justifying government intervention.