The process of innovation in five industries in Europe and Japan

This study examines the relationships between outside influences and the firm's innovation process. A sample of commercially successful and unsuccessful R&D projects of a number of firms is discussed in terms of diverse market, resource, technical and organizational factors. The stimulus for a project, the sources of ideas used and the influences of competition and regulatory constraints were expected to vary among industries, and these differences are described. The authors suggest that their findings might be understood based on the evolution of a business from one having initially fluid and independent product and process technologies to one having a highly automated process technology designed for a specific standard product. Consequently, the relationship between product and process will shape and constrain the firm's ability to innovate in response to a changing environment. Innovations can be conceived of as a function of a firm's environment including technical, market, economic, governmental and other components, communication between the firm and its environment, the firm's resources, and its organization and allocation of resources, including financial and human resources, technology and information [Utterback, 1971]. The purpose of the present study was to examine relationships between environmental influences and the sources and outcomes of a sample of R&D projects undertaken by firms in five industries in Europe and Japan. Several industries (ranging from computers and consumer electronics to industrial chemicals, textiles and autos) were chosen for study based on the belief that the influence of various aspects of the environment on innovation will vary in a predictable way between productive segments. Productive segment refers to the single product firm or a division of a larger firm having a related group of products or line of business and production technology to produce these [Abernathy and Townsend, 1975]. One would expect differences, though less sharply defined, among firms with several divisions and among industries. The essence of our hypothesis is that early in its life a firm's product and process technology will be fluid, but that as it develops its product and process technology will become highly interdependent, and that the relationship between product and process will shape and constrain the innovation process [Utterback and Abernathy, 1975; Abernathy and Wayne, 1975].