Business Economics - an overview | ScienceDirect Topics

Summary

First Statement: Innovation Concerns Human Beings Within the Firm

In recent decades, in both economics and business administration, there has been an increasing interest in innovation, knowledge management, technological development, organizational learning and so forth. Innovation may be seen as the core notion within this group. Innovation is something that is going on in firms and in systems of firms (cf. Edquist, 1997; Nelson 1993).

First Statement: Innovation Concerns Human Beings Within the Firm

In recent decades, in both economics and business administration, there has been an increasing interest in innovation, knowledge management, technological development, organizational learning and so forth. Innovation may be seen as the core notion within this group. Innovation is something that is going on in firms and in systems of firms (cf. Edquist, 1997; Nelson 1993).

Fundamentally, the reason for the increasing interest in these topics is a desire to understand the development of the firm as an explanation for economic growth. If we are really to develop such an understanding, we need to go back to Schumpeter's work (1934) and his views concerning economic development. To Schumpeter, economic development means new solutions to society's problems and needs. One could see the process of developing new solutions in terms of social change, which a sociological discipline was called (e.g. LaPiere, 1965; Moore, 1963). However, one does not need to formulate the notion of social change in a functionalist manner within a ‘hard’ evolutionary approach. The process of diffusing the innovation does not need to be rational in the sense that a problem can be defined, and the new element solves that problem. The diffusion of a new element can be caused by people just choosing another way of living, which the new elements make possible (Barnett 1953).

Introducing the concept of strategic reflexivity re-introduces the idea of social change but in a ‘soft’ evolutionary way. However, here the idea is restricted to social change within firm organizations, and it is also limited to economic actions. The latter means actions which—directly or indirectly—lead to initiatives taken in the market.

The objective of the strategic reflexivity approach thus is broader than new, physical products of technology. The approach emphasizes the behavior that leads to the development of the firm, economic growth, and social change. Innovation is traditionally identified as the result of that behavior—a new product, a new production process, etc. (Coombs et al., 1987; Freeman & Soete, 1997). The results (the innovations) are of course important since they change the world. However, if we want to understand and explain the development process so that we are in a position to guide it, we need to study it. The process is therefore more important than the results. That is why innovation in this chapter has been defined as the process as well as the result (however, compared to the traditional innovation theory, the emphasis is on the process).

Innovation could be interpreted as a process of social change. New elements are invented and diffused throughout society changing it, our lives or particular sub-structures of the society (such as how we transport ourselves, how we spend our free time, how we work etc.).

Actions, including innovation, are undertaken by persons in a social system. The approach here is to understand innovation and change as sociological processes which take place within the firm organization and between the persons within the firm and outsiders.

Business Economics - an overview | ScienceDirect Topics
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