transfers and the generalized theory of distortions and welfare recent theoretical attention devoted to the transfer paradox has included attempts to incorporate it into the body of commercial policy in this paper the existence of a family of always feasible corrective tax policies is proved which guarantees normal welfare response the set of pol icies is shown to contain the external trade fixing tariff and the op timal tariff the set of policies is then extended to include a capit al flow fixing profits tax to deal with the problems of foreign inves tment the results are then interpreted in terms of a general proposi tion in the theory of distortions and welfare copyright 1987 by the review of economic studies limited

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

technological regimes and schumpeterian patterns of innovation this paper proposes that the specific pattern of innovative activities in an industry can be explained as the outcome of different technological learning regimes a technological regime is defined by the particular combination of technological opportunities appropriability of innovations cumulativeness of technical advances and properties of the knowledge base building upon the distinction between schumpeter mark i and schumpeter mark ii industries this paper provides empirical estimates of the relationships between indicators of the schumpeterian patterns of innovation concentration of innovative activities stability in the hierarchy of innovators and importance of new innovators and indicators of the variables defining technological regimes

development of smes and heterogeneity of trajectories the case of biotechnology in france biotechnology is an emergent sector based on the creation of research intensive small and medium enterprises smes while some smes are growing most of them remain small even those set up several years ago what is the pattern of development of the biotech sector what are the patterns of development of firms studies on the development of high tech smes have focused on a business model in which entrepreneurs rely on growth forecasts to persuade capital investors business angels and venture capitalists to invest in a radical innovation project firms aim for a world market to industrialise their innovation and initial public offering ipo enables initial investors to make profits that offset risky initial investment while this model is appealing it is simply one of the possible models of biotechnology development some firms are not designed to experience exponential growth and choose to target local markets moreover not all firms have the ambition of being listed on the stock exchange based on an in depth analysis of the business and development of 60 french biotech smes this article identifies two business models by defining the development trajectories of each of these models it highlights the temporary nature of the emergent model

if you cannot block you better run small firms cooperative innovation and appropriation strategies abstract this empirical study examines small firms strategies for capturing returns to investments in innovation we find that small firms strategies are qualitatively different from those found in earlier studies of both small and large firms most of the small firms examined here find informal means of protection such as speed to market or secrecy more important than patenting only firms with university cooperation typically r d intensive and science based small firms were likely to identify patents as the most important method of appropriating innovation returns in their field thus the strategic choice for most small firms is between secrecy and speed to market firms that cooperate in innovation with horizontal partners or significantly depend on vertical partners tend to prefer speed whereas process innovators with modest r d investments or few cooperative r d activities display a preference for trade secrets indeed cooperation activities greatly influence the choice of intellectual property strategy for small firms earlier research has emphasized patents and trade secrets as key strategies of appropriation yet these strategies do not appear to be very beneficial for small firms engaged in cooperative innovation these results raise policy questions regarding the functionality of the existing system of intellectual property rights

innovation and strategic divergence an empirical study of the u s pharmaceutical industry from 1920 to 1960 today firms employing two distinct survival strategies 1 innovation and 2 imitation coexist in the u s pharmaceutical industry history indicates that this intraindustry heterogeneity did not exist prior to 1940 this study empirically investigates the origin of this strategic divergence by focusing on changes in firms r d inputs and outputs it finds that some u s pharmaceutical firms responded to the opportunity presented by the discovery of antibiotics in the 1940s by investing more in r d while many others did not over time the innovators dominated in developing new drugs and the gap between innovators and imitators steadily increased these findings also shed light on the genesis of strategic groups a phenomenon that is not yet well understood

did austerity cause brexit did austerity cause brexit this paper shows that the rise of popular support for the uk independence party ukip as the single most important correlate of the subsequent leave vote in the 2016 european union eu referendum along with broader measures of political dissatisfaction are strongly and causally associated with an individual s or an area s exposure to austerity since 2010 in addition to exploiting data from the population of all electoral contests in the uk since 2000 i leverage detailed individual level panel data allowing me to exploit within individual variation in exposure to specific welfare reforms as well as broader measures of political preferences the results suggest that the eu referendum could have resulted in a remain victory had it not been for a range of austerity induced welfare reforms further auxiliary results suggest that the welfare reforms activated existing underlying economic grievances that have broader origins than what the current literature on brexit suggests up until 2010 the uk s welfare state evened out growing income differences across the skill divide through transfer payments this pattern markedly stops from 2010 onwards as austerity started to bite

the generalized theory of transfers and welfare bilateral transfers in a multilateral world paul samuelson s 1952 1954 classic papers on the transfer problem addressed two separate analytical issues the positive effect of a transfer on the terms of trade and the welfare effect of the transfer on the donor and the recipient since then a considerable body of literature has grown up on the positive analysis while samuelson 1954 himself had extended the 2 x 2 x 2 free trade analysis to allow for tariffs and transport costs subsequent writers have analyzed other extensions of the model for example to allow for nontraded goods as with leisure in samuelson 1971 or general nontraded goods in john chipman 1974 and ronald jones 1970 1975 remarkably however the welfare analysis of transfers has not paralleled these developments since wassily leontief 1936 produced an example of immiserizing transfer from abroad and samuelson 1947 argued that the example required market instability the proposition that has monopolized attention has been that a transfer in the conventional 2 x 2 x 2 model in its free trade version cannot immiserize the recipient or enrich the donor as long as world markets are stable in the walras sense interestingly samuelson 1954 who did extend the positive analysis to include tariffs did not go on to ask whether immiserization of the transfer recipient and hence symmetrically enrichment of the donor in a two country model could now arise consistent with market stability recently the welfare analysis of transfers has been extended in two different directions both apparently unconnected and both yielding the conclusion that transfers from abroad can be immiserizing and that the donor may improve its welfare despite market stability one route to this conclusion has been the introduction of a third economic agent or country that is outside of the transfer process in the appendix of his 1960 paper analyzing the interaction between trade policy and income distribution harry johnson discussed the possibility of welfareparadoxical redistribution between two factor income classes capital and labor in an open economy thereby providing what can be interpreted as a treatment of the threeagent transfer problem for the case in which donor and recipient are both completely specialized in the ownership of a single different factor an independent analysis of the three agent transfer problem using a restrictive model with given endowments of goods and fixed coefficients in consumption was also undertaken in an important paper by david gale 1974 2 brecher and bhagwati bhagwati department of economics columbia university new york ny 10027 brecher department of economics carleton university ottawa on kis 5b6 hatta department of political economy the johns hopkins university baltimore md 21218 we thank the national science foundation grant no 524718 for partial financial support of the research underlying this paper the paper was written when brecher and hatta were visiting columbia university 1981 82 gratefully acknowledged are helpful comments and suggestions from john chipman avinash dixit jacques dreze robert feenstra jacob frenkel ronald jones murray kemp andreu mas colell michael mussa john riley lars svensson and robert willig from anonymous referees and from seminar participants at berkeley harvard minnesota rochester chicago and the university of california los angeles after the present paper was submitted for publication and following its presentation at rochester our attention was drawn to this appendix which was noticed by a student of ronald jones subsequently we learned from makoto yano that motoshige itoh had pointed out an important related paper by ryuotaro komiya and t shizuki 1967 whose condition 11 for the johnson case anticipated our equation 12 below we are grateful for having both of these references brought to our attention 2 gale constructs an example in which the donor is enriched along with the recipient furthermore this immediately implies that a reverse transfer will immis

foreign aid domestic investment and welfare this paper examines the welfare implications of temporary foreign aid in a simple two period two country model of trade domestic investment is endogenous providing an important link between aid in period one and the terms of trade in periods one and two transfer induced changes in the terms of trade redistribute present and future income between the donor and the recipient in the presence of barriers to international borrowing and lending such redistribution gives rise to the possibility of temporary aid being both potentially and strictly pareto improving

sectoral patterns of technical change towards a taxonomy and a theory abstract the purpose of the paper is to describe and explain sectoral patterns of technical change as revealed by data on about 2000 significant innovations in britain since 1945 most technological knowledge turns out not to be information that is generally applicable and easily reproducible but specific to firms and applications cumulative in development and varied amongst sectors in source and direction innovating firms principally in electronics and chemicals are relatively big and they develop innovations over a wide range of specific product groups within their principal sector but relatively few outside firms principally in mechanical and instrument engineering are relatively small and specialised and they exist in symbiosis with large firms in scale intensive sectors like metal manufacture and vehicles who make a significant contribution to their own process technology in textile firms on the other hand most process innovations come from suppliers these characteristics and variations can be classified in a three part taxonomy based on firms 1 supplier dominated 2 production intensive 3 science based they can be explained by sources of technology requirements of users and possibilities for appropriation this explanation has implications for our understanding of the sources and directions of technical change firms diversification behaviour the dynamic relationship between technology and industrial structure and the formation of technological skills and advantages at the level of the firm the region and the country

the relative effectiveness of patents and secrecy for appropriation abstract changes in patent law global competition and the rise of several new technologies suggest that patents could be of greater value than secrecy for many innovative firms particularly small firms that are unable to use market power or other factors to appropriate their investments in innovation data from the 1993 european community innovation survey cis for up to 2849 r d performing firms is analysed to determine the relative importance of secrecy vs patents this particular combination of appropriation methods is interesting because secrecy can act as a mutually exclusive alternative to patents the results show that a higher percentage of firms in all size classes rate secrecy as more valuable than patents however ordered logit regressions show that the probability that a firm rates secrecy as more valuable than patents declines with an increase in firm size for product innovations while there is no relationship for process innovations the firm s r d intensity has no effect on the relative value of secrecy vs patents there is weak evidence to show that participation in cooperative r d increases the value of patents over secrecy for product innovations the results are relevant to ongoing debates over changes to the patent system and the need for policies to encourage small firms to patent more

what exactly are technological regimes intra industry heterogeneity in the organization of innovation activities this empirical study analyzes the patterns of innovation within and across industries using firm level survey data from finland and denmark the theoretical starting point is evolutionary theory with its premise that firms in different technological regimes pursue different paths to innovation similar modes of behaviour are found in the two datasets and they closely correspond to those found in earlier studies contrary to prevailing assumptions however the results show that industries are not at all uniform in terms of how firms innovate in almost all four or five digit nace industries three or more different modes of innovation can be identified this suggests that firms strategic differentiation or local search activities overcome pressures in the technological environment towards homogenous behaviour at least in the short term

persistent heterogeneity of r d intensities within sectors evidence and policy implications abstract do firms in the same sector converge towards the same r d intensities previous research has often assumed this to be true a closer examination using microdata from the eu industrial r d investment scoreboard for the years 2000 2015 shows considerable heterogeneity in r d intensities among firms in the same sector and that this heterogeneity persists over time statistical tests of convergence show that the variation in r d intensities does not decrease over time i e no convergence although firms with an r d intensity below the industry average do seem to catch up with the leaders i e evidence of convergence overall firms in the same industry do not converge to a common r d intensity policy implications are discussed

firm specificity in corporate applied r d much corporate research and development r d has characteristics that tie it strongly to the firm in which it takes place and which may make the process of undertaking r d or the outcome of the r d difficult for other firms to duplicate perfectly that is the r d is firm specific this is particularly true for more highly applied r d which tends to involve incremental technological change and often entails alterations and enhancements to existing firm assets production processes and products the often firm specific nature of corporate r d tends to receive relatively little attention in the study of technological innovation this article outlines the primary characteristics of firm specificity in r d and discusses two interrelated consequences of such firm specificity 1 heterogeneity in the r d applications of firms within an industry and 2 increased ability of firms to earn returns to r d often termed appropriability both factors have important implications for firm strategy empirical

disentangling patterns of economic technological and innovative specialization of western economies an assessment of the varieties of capitalism theory on comparative institutional advantages it is one of the central arguments of the varieties of capitalism voc literature that national institutions determine comparative advantage while liberal market economies lmes are said to offer comparative institutional advantages to firms that specialize in high tech sectors based on radical innovation coordinated market economies cmes offer advantages to firms specializing in medium high tech sectors characterized by incremental innovation several studies have tested these claims and arrived at contradictory results about specialization in line with institutional advantages we argue that undifferentiated conceptualizations of the notion of specialization contribute to these inconclusive results based on the insights of the innovation literature on comparative advantage we therefore disentangle the concepts of 1 economic specialization 2 technological specialization and 3 innovative specialization our analyses of panel data on exports and patents show that the voc theory is rather weak in explaining patterns of economic specialization but can account for technological specialization furthermore the voc literature can hardly explain patterns of innovative specialization

on the sources and significance of interindustry differences in technological opportunities abstract the set of technological opportunities in a given industry is one of the fundamental determinants of technical advance in that line of business we examine the concept of technological opportunity and discuss three categories of sources of those opportunities advances in scientific understanding and technique technological advances originating in other industries and in other private and governmental institutions and feedbacks from an industry s own technological advances data from the yale survey on industrial research and development are used to measure the strength of various sources of technological opportunity and to discern interindustry differences in the importance of these sources we find that interindustry differences in the strength and sources of technological opportunities contribute importantly to explanations of cross industry variation in r d intensity and technological advance

scope and patterns of innovation cooperation in spanish service enterprises abstract examining 2148 innovating service firms from the spanish technological innovation panel 2004 this paper utilizes latent class analysis to appraise the scope of innovation cooperation in services in the spanish economy in accordance with the growing weight of external information flows throughout innovation processes the empirical evidence indicates that the nature of the service activity affects both the partner chosen and the cooperation intensity the results lead to the creation of a typology of cooperation composed of three broad profiles service firms intensive in techno scientific cooperation intensive in interactions with clients and a profile with low intensity in cooperation called lonely innovators the probability that a firm belongs to the latter profile is 59 which makes it reasonable to affirm that innovation cooperation is not a common practice in spanish innovating service enterprises innovation output variables have been included in order to examine the relationship between patterns of cooperation and innovation performance the findings also underline the co existence of different cooperation patterns within the same industry

the voyage of the beagle into innovation explorations on heterogeneity selection and sectors the aim of the paper is to assess heterogeneity of the innovation process using exploratory factor analysis on micro data from the third community innovation survey in 13 countries we identify four patterns that can be interpreted as research user external and production ingredients of innovation all too often it is assumed that how firm innovate can be represented by differences across sectors and or countries to put this proposition under scrutiny we partition variability of the factors scores into components identified by these higher levels sectors and countries matter to a certain extent but far more of the variance is given by heterogeneity among firms within both of them however groups of firms produced by cluster analysis account for much higher share of the variance which indicates that the most relevant stratification of the data cuts across the established sectoral and national boundaries we discuss implications of these findings for understanding of selection in evolutionary economics and for the literature on innovation systems

firm technological trajectory as a driver of eco innovation in young small and medium sized enterprises abstract few studies have focused on green innovation in young small and medium sized enterprises instead research tends to focus on large companies with formal research and development departments studying the influence of the firm s current technological strategy as well as the regulatory framework as a key driver of eco innovation this paper proposes that the combination of a firm s technological trajectory and its current research and development strategy are key determinants of eco innovation the authors investigate these relationships with panel data on 212 young firms in spain analysing their innovation strategy and behaviour during their first 10 years of activity the results show that the firms cluster into four technological trajectories but only market oriented innovators engage significantly more in eco innovation these firms are characterized by a high use of formal appropriability mechanisms market opportunity recognition arising from cooperation and high knowledge cumulativeness this paper sheds light on whether and the extent to which a firm s technological trajectory is a driver of eco innovation it confirms that firms that search for opportunities and have a continuous collaboration with market players are more prone to develop eco innovations additionally it shows that path dependence occurs in the development of eco innovations in that a highly developed innovation capacity leads to additional green innovation in the future the findings indicate that young small firms need to develop innovation capabilities that also enable them to adopt advanced technology before striving to become greener the paper concludes that policies designed to stimulate cooperative networking with other market players an upgrading of technological capabilities and the adoption of new technologies are all desirable because they contribute to improving the environmental impact of firms innovations

measuring systemic problems in national innovation systems an application to thailand the paper contributes to research on innovation systems in general and in particular to the current debate on rationales for innovation policy by providing a framework to identify systemic problems in a given system of innovation and test the framework empirically the data were drawn from the thai community innovation survey in the period after which a major change in the country s innovation system policy had been initiated by hierarchical factor analysis systemic problems are identified and grouped into four components institution network science and technology infrastructure and other support services the analysis allows researchers to investigate the mismatch between policies and problems and identify policy gaps c 2012 elsevier b v all rights reserved less

getting to know you a theory of strategic group identity this paper develops a theory of strategic group identity that explains how strategic groups emerge in an industry and how they can affect firm behaviors and outcomes in so doing it provides a theoretical basis for the existence of strategic groups we argue that managers cognitively partition their industry environment to reduce uncertainty and to cope with bounded rationality social learning theory and social identification theory are used to describe how cognitive groups coalesce into meaningful substructures and how a group level identity emerges we describe the ways in which macro level factors condition the development of groups and their identities we introduce the notion of a strong identity which characterizes any group sufficiently recognized and attended to by members to affect individual action groups with weak identities are no more than transient agglomerations of firms and do not exist in any meaningful sense these ideas are developed into propositions that describe the conditions under which groups with strong identities are likely to emerge a second set of propositions describes their transformation over time identity strength is linked to both positive and negative outcomes in a final set of propositions we show how strategic groups with strong identities can affect firm performance resolving a longstanding problem which has plagued strategic groups research and conclude by suggesting some approaches for measurement and future research 1997 by john wiley sons ltd

aid nontraded goods and the transfer paradox in small countries this paper constructs a model of the transfer paradox for a small open economy with nontraded goods it demonstrates that increased production of nontraded goods can change their domestic price so as to offset the otherwise beneficial effect of aid and under certain conditions to create a transfer paradox even in a small country the model is estimated with time series data for 44 aid dependent countries for the period 1970 90 the results support the model and show that the nontraded goods expansion effect is more likely to cause immiserization than harry g johnson s 1967 tariff distorting export displacement effect

mobility and innovation a cross country comparison in the video games industry open labour markets are often seen as a precondition for innovation particularly for new industries however this view ignores two core findings of the economic systems literature first that mobility patterns are institutional microsystems that need to be complementary to other institutions in the labour market and second that new industries may be characterised by incremental and complex innovation based on these considerations we ask how mobility affects innovation in the video games industry in the us and japan we find that inter firm mobility is beneficial for innovation in the us but has negative effects in japan we further find that inter functional mobility is beneficial for innovation in both countries our analysis is based on career histories from the video games industry in the us and japan we present an empirical study based on the game development of 815 video games and the careers of 28 426 video game developers who were involved in the development of games released between 1999 and 2009

the benefits of r d and breadth in innovation strategies a comparison of finnish service and manufacturing firms this empirical study compares the determinants of innovation in manufacturing and services through descriptive and regression analyses of sales from innovative products and services a particular focus is on the effects of r d investments and breadth in knowledge sourcing and innovation objectives the results suggest that contrary to earlier research r d investments play a statistically and economically significant role in service innovation we suggest that this results from the growing engagement of service firms in regular r d activity both service and manufacturing firms also benefit from breadth in external knowledge sourcing strategies in contrast breadth in terms of pursuing parallel innovation objectives appears to have detrimental effects on innovation in service industries we interpret the latter results through reference to service firms r d management capabilities managing multiple innovation projects is challenging and some service firms may not have accumulated the requisite managerial processes and capabilities to benefit from these strategies the available data provide support for this conjecture the detrimental effects of breadth in innovation objectives are significantly mitigated by regular r d activities copyright 2012 the author 2012 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

sustainable innovations in the corporate sector the empirical evidence from ibex 35 firms abstract sustainable innovation practices those which simultaneously contribute to environmental social and economic value creation have drawn increased attention from academics industry leaders and policy makers around the globe there is a general agreement that innovation is a very important part of the puzzle in achieving long term sustainability thus a critical question to be answered is what factors actually differentiate and appear to contribute to sustainable innovations si at the firm level this paper addresses the question by examining empirical evidence from the ibex 35 companies from the years 2010 2015 our results obtained from multivariate regression model indicate that the intensity of a firm s si activity is strongly and statistically significantly associated with the sector in which a given firm operates with a rising level of environmental footprint acting as a stimulant for innovation additionally firms characterized by higher net profit margins and returns on equity were also much more likely to introduce sis the findings also suggest that factors like size and age of a given company as well as level of competition in a sector in which it operates are not significant predictors for the implementation of sustainable innovations overall this study contributes to our understanding of the main characteristics of companies active in the area of si

r d spillovers patents and the incentives to innovate in japan and the united states national surveys of r d labs across the manufacturing sectors in the us and japan show that intraindustry r d knowledge flows and spillovers are greater in japan than in the us and the appropriability of rents due to innovation less patents in particular are observed to play a more central role in diffusing information across rivals in japan and appear to be a key reason for greater intraindustry r d spillovers there suggesting that patent policy can importantly affect information flows uses of patents differ between the two nations with strategic uses of patents particularly for negotiations being more common in japan

transfers the terms of trade and capital accumulation in the context of a two sector overlapping generations model it is demonstrated that a steady state transfer paradox may arise under commodity trade with stability and without distortions or bystanders the existence of the paradox is due to the effect of the transfer on world capital accumulation which is shown to always i e for any ranking of factor intensities and savings rates improve the donor s terms of trade transfers may also improve steady state welfare for both donor and recipient and produce paradoxical welfare results along the transition path la litterature en statique du commerce international a conclu que en l absence de distorsions ou de tierces parties les mouvements des termes d echange induits par les transferts ne peuvent pas etre suffisamment importants quand il y a stabilite walrasienne pour engendrer le paradoxe du transfert on a tire la conclusion de modeles dynamiques a un secteur que le paradoxe du transfert est possible mais en comptant sur la mobilite internationale du capital et sur les mouvements dans le niveau mondial du taux d interet plutot que sur les prix et les marches des biens dans un modele dynamique a deux secteurs ou les generations se chevauchent ce qui permet des effets a la fois statiques et intertemporels dans les termes d echange le commerce des biens peut engendrer un paradoxe du transfert en regime permanent quand il y a stabilite walrasienne sans distorsions et tierces parties l existence du paradoxe est attribuable a l effet du transfert sur l accumulation du capital qui toujours pour tout ordre des intensites de facteur et des taux d epargne ameliore les termes d echange du donneur les transferts peuvent aussi ameliorer le bien etre du donneur et du recipiendaire en regime permanent et produire des resultats paradoxaux de bien etre dans le sentier de transition

internal r d expenditures and external technology sourcing abstract the paper examines the two way relationship between external r d activities and internal r d expenditures on a cross section of flemish r d active companies the analysis extends the classical explanatory variables like size diversification ownership structure and technological opportunities to include the impact of various external sourcing strategies r d cooperation and to a lesser extent r d contracted out are found to have a significant positive effect on internal r d but only if the companies have absorptive capacity in the form of a full time staffed r d department at the same time firms are found to be more frequently engaged in r d cooperation the more they spend on internal r d

technological trajectories as moderators of firm level determinants of innovation pavitt research policy 13 1984 343 identified different patterns of technological change technological trajectories in four sectoral classes of industrial firms this paper tests the applicability of pavitt s taxonomy which derived from an economic perspective to moderate the inconsistent results of the management literature on the determinants of technological innovation an empirical test in a sample of 105 greek companies showed that firms in different trajectories of pavitt s taxonomy had differences in the rate of technological innovation specialised suppliers and science based firms were found to have higher rates of innovation than supplier dominated and scale intensive ones most importantly different variables proved to be significantly associated with innovation for each category of firms innovation for supplier dominated firms was related to the competitive environment acquisition of information technology strategy risk attitude and internal co ordination for scale intensive firms the important determinants were related to the ability to raise funding and the education and experience of personnel for specialised suppliers innovation was associated with high growth rate and exporting as well as training and incentives offered to the employees to contribute towards innovation science based firms depended upon technology related variables education and experience of personnel growth in profitability and panel discussions with lead customers the application of pavitt s model can resolve the apparent problem of inconsistent results in the management research on the determinants of technological innovation

technological regimes and sectoral patterns of innovative activities this paper focuses on the relationships between observed patterns of innovative activities within a sector and the related context and underlying microeconomic processes that might account for them it claims that there are some invariant features with respect to relative prices and incentives mechanisms of learning and knowledge accumulation that greatly affect the rate and structure of innovative activity these features are different across sectors the paper proposes that the specific pattern of innovative activity of a sector can be explained as the outcome of different technological regimes that are implied by the nature of technology and knowledge the notion of technological regime provides a synthetic representation of some of the most important economic properties of technologies and of the characteristics of the learning processes that are involved in innovative activities copyright 1997 by oxford university press