Knowledge Flows in Innovation

Abstract

Early innovation studies1 were concerned, amongst other things, to assess the contribution of different knowledge generating activities — including ‘public science’ — to industrial innovation. Typically these studies sought to identify a single main institutional source of the original idea for the innovation under investigation, and of the major technical inputs to subsequent problem-solving (see Rothwell, 1977 for a review). Despite this rather crude approach, there is remarkable convergence (averaging across industries) in the results of these studies. Around two third of the knowledge used by companies in the course of innovation was found to derive from their own in-house research, design and development (RD&D)2 effort and expertise, the remaining third coming from external sources. The largest single external sources of technical inputs to innovation is usually other companies (users, suppliers and competitors); the contribution of public sector research (academic and government laboratories) varies across sectors, from 5 to 20 per cent (Rothwell, 1977). In short, innovation demands knowledge from a range of internal and external sources.