The Organisation of Innovative Activities Across Industries: A closer look at patterns of technical change in manufacturing and services

This paper presents an analysis of the organisation of innovation across sectors in Denmark and Finland. First, patterns of innovative activity within manufacturing and services are identified though applying factor analysis on firm-level innovation survey data from the two countries. The analysis finds that not only are innovation modes very similar across manufacturing and service sectors, the same main modes are also identified in the two countries analysed. Furthermore, the innovation modes identified are very similar to the modes expressed in the well-known Pavitt Taxonomy. Second, the relation between innovation modes and innovation outcome are investigated through regression analysis. The analysis confirms that the way innovation is organised matters for outcome, in terms of type of innovation, as well as in terms of share of sales stemming from innovation. Finally, we explore whether innovation modes are aligned with industry classifications, as it is assumed in the original work on technological regimes. Contrary to these assumptions we find that industries by no means are uniform in terms of organisation of innovation; in most cases two or three regimes are represented in a single industry.