Modes of innovation and integration capability: evidence from product development in equipment machinery

Product innovation is a subtle process, frequently leading to shifts in the competitiveness of firms. Developing products in an environment undergoing technological change is given to frequent failure, even in well-established and sophisticated organizations. In order to tackle competitiveness and to deal with innovation uncertainty, firms develop diverse innovation processes. Two modes of innovation are suggested in recent literature: 1) Science, Technology and Innovation (STI) mode, which is based on the production and use of codified scientific and technical knowledge; and 2) Doing, Using and Interacting (DUI) mode, which relies on informal processes of learning and experience-based know-how. In this paper we analyse product innovation at firm level. We perform an exploratory analysis in four leading equipment and machinery producers from the Aveiro region, in Portugal. Doing so, we explore the main features of the capital goods’ industry with implications for innovation, and analyse the dominant uncertainties associated to the innovation process. and modes of innovation. Key findings include the complete absence of DUI mode in the cases studied, and even a low learning characteristic in one company. The paper concludes by considering the implications for firms’ competitiveness and for innovation policy