Ernst Max Nielsen continues his series on "Where's the Beef?" (Click the Category on your right hand side: "Where's the Beef". The articles are numbered in Roman numbers: I, II, III etc. If you scroll down this site, you'll get the articles in reverse order)
This is the sixth article in the series "Where's the Beef": quick-and-dirty methods to make a go or no-go decision regarding whether or not and how to try to commercialize an invention.
Keith Pavitt: Segmentation and Taxanomies of companies
A second important contributor to practical innovation theory was Keith Pavitt from SPRU (Sussex University), whose pathbreaking analysis (together with good colleagues) has helped understand that we must ”segment” the concepts of business and of innovation to understand how innovation happens. Pavitt demonstrated how we may distinguish and predict innovation behaviour in and linkages between different types of businesses.
Not all businesses innovate themselves but depend on specialized suppliers, customers etc and such interlinked business form what Porter may wish to call a cluster. The usefulness for the tech transfer practitioner of Pavitt’s work is that we may direct our efforts to finding partners for inventions more precisely by being able to map possible interlinked businesses, who might have an interest in the invention. I have learned that quite often we need to bring together several actors in a cluster to push a given invention to market.
Innovation is Innovation is Innovation
Pavitt has shown us that we should distinguish between product and process innovation; between technological and market innovation; radical and incremental innovation. He has effectively made it clear that the ”locus” of innovation is not (always) one business (ltd company) but the interlinkage between several businesses. By way of such insights, the practitioner will also make sense of the observation that often two businesses will act not only in the cooperative mode but in another moment as competitors.
Some companies, as in the petrochemical business, are process intensive: a slight fraction of a percent of improvement is worth millions. Others rely on launching new products with a slightly better profit margin all the time. Others totally rely on others to do the innovation, as, for instance the classical industries such as textiles.
Pavitt and later attempts at adopting his thinking has actually matched
the SIC code (for industry sector) with Pavitt’s segments, which makes
it easy for you to make an early guess of what type of business you
might be looking for (and finding them). Try to "google" "industry sic
code pavitt" and see what happens.
The European Commission makes regular innovation benchmark studies in European industry using Pavitt’s basic concepts. Go to Cordis' homepage and have a look, e.g. Trendchart
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