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ABSTRACT
This study explores the question of whether the Swedish innovation output of the 1970s and 1980s (and the following decades) indicates structural lock-in or renewal. It is motivated by inconsistent explanations in the current literature about the relation between the economic slowdown and subsequent industrial renewal, as well as a lack of research focusing, in this context, on the primary driver of economic growth and structural change: innovation. By observing the number and type of innovations as they hit the market, the data in this paper tell a real time story about micro level innovation activity during the time that the economic crisis unfolds. The analysis considers Swedish innovation output between 1970 and 2007, characterising the number of significant innovations, their novelty, and their origin (including size of firm and industry sector). Three central findings emerge, defined by both the time period and the character of innovations. First, the magnitude of innovation activity peaks in the late 1970s to early 1980s. Second, starting in the late 1970s, small firms begin to outperform large firms in terms of both innovation quantity and quality (i.e. world market novelties). Third, the 1980s saw a distinct shift in the industrial origin of innovations, with software and telecom becoming the leaders in innovation output. The findings suggest that the observed industrial renewal is more nuanced than what has emerged from previous research.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1 The large literature on the relation between R&D and various measures of inventive and innovative output profess that the strength and character of such links varies considerably between sectors and firms (Cohen, Citation2010; Cohen & Klepper, Citation1996; Pavitt, Robson, & Townsend, Citation1987).
2 Using a dataset similar to the one used in this paper, Mäkinen (Citation2007) finds that less than 60% of a sample of 791 innovations was patented. Based on a questionnaire, Arundel and Kabla (Citation1998) estimate the patent propensity in European manufacturing sectors and find that only pharmaceuticals, chemicals, machinery, and precision instruments have rates that exceed 50%.
3 Annual reports, an alternative way to capture the innovation output of firms, are equally afflicted with problems related to self-reporting. Moreover, the information given in such reports varies considerably.
4 See and in the Appendix.
5 See in the Appendix for a list of the most frequent innovators.
6 See in the Appendix for number of innovations per industry (SNI, 2002), percent of total innovations, linear trend slope 1970–2007, percent of world market novelties, and world market novelty ratio.