Innovation paradoxes: a review and typology of explanations

ABSTRACT

The concept of innovation paradoxes refers to a family of anomalous observations demonstrating that relatively high or outstanding innovation efforts lead to either insignificant or undesirable outcomes. While researchers have long been busy studying the nature and causes of innovation paradoxes, they have yet to assess the fruits of their research efforts. This paper addresses this neglect, in particular by identifying and reviewing the literature of two innovation paradoxes – the European innovation paradox and the Swedish innovation paradox. The findings show that research on both paradoxes has proceeded along similar lines, leading to the development of a working explanatory typology of innovation paradoxes. The paper ends with a discussion of key observations, findings and suggestions.

Acknowledgments

The author is grateful to Stuart Macdonald and Karmo Kroos, as well as to three anonymous reviewers for helpful comments and suggestions. An earlier version of this paper was presented at the 17th Annual Conference of the Association for Heterodox Economists at Southampton Solent University in July 2015. The author would also like to thank the participants of the conference for sharing freely their thoughts, remarks and suggestions. The paper has also benefited from the comments and suggestions of other people; in alphabetical order, Daniele Archibugi, Alex Coad, Seval Dogan, Jesper Jespersen, Helen Lawton Smith, and Klaus Nielsen. The usual disclaimer applies – none of the people mentioned here is responsible for any errors and misconceptions in this paper.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. Search date December 2017.

2. Innovation studies is half a century old, a cross-disciplinary field of the social sciences. Its primary aim is to study in a systematic manner the nature, determinants, social and economic benefits and consequences of innovation (Fagerberg et al., 2013). While diverse, much innovation studies theory and research falls into three main strands: the economics of innovation strand, consisting of the mainstream economic school (e.g. Aghion and Howitt, 1992) and the evolutionary (neo-Schumpeterian) school (e.g. Fagerberg, 2003); the management and organisation of innovation strand (e.g. Tidd et al., 2005); and the socio-economic strand, dealing mainly with the diffusion of innovation (e.g. Rogers, 2003) and innovation systems (e.g. Edquist, 2005). As a result of its multi-disciplinary nature, innovation studies research on innovation paradoxes provides a more holistic and nuanced understanding of the underlying causes of innovation paradoxes than discipline-based (e.g. economic) research on such paradoxes.

3. The author would like to thank an anonymous referee for bringing Peterson and Valliere (2008) paper to his attention.

4. Several more explanations can also be included here. However, like the previous section on the EP, this section deals with contributions that have explicitly addressed or referred to the SP either/both in theoretical or/and empirical terms.

5. As a reviewer has rightly pointed out, one can also develop various other typologies based on the findings of the previous two sections. For instance, one can distinguish among micro-level factors, meso-level, and macro-level (e.g. institutional and structural) factors. Despite its relevance, such a classification leaves no room for the validity explanatory category, discussed towards the end of this section.

6. This, however, does not necessarily mean that a ‘linear-informed’ innovation paradox is of little relevance to our knowledge, as some scholars may think or argue. After all, the inferiority or superiority of any theoretical perspective is best illustrated through concrete research in general, and causal explanatory research in particular.