Sources of Innovative Activities and Industrial Organization in Italy'

This paper is based on the information gathered through a survey on industrial innovation in 24,000 Italian business units. Two-thirds of the business units surveyed declared they had introduced innovations, although there were significant variations across industries and size. Only 16 percent of the innovating business units monitored declared they had performed R&D: as many as 13,986 business units have introduced innovations without performing R&D. The paper focuses on the different sources of technical knowledge which support the innovative activities, such as R&D, design, acquisition of capital goods, patents, etc. It considers also the relationship between concentration and innovative intensity at the industry level. It emerges that, at least at the business unit level, there is a weak correlation between the two variables. On the basis of the measured industrial concentration, the propensity to perform product versus process innovations, and the sources of technological change, a taxonomy of industrial sectors is proposed which elaborates on Pavitt's original approach. This taxonomy, instead of stressing the role of either small firms as in the flexible specialization model or of the Schumpeterian concentration to explain the intensity and nature of the innovative phenomena, indicates that sectoral differences explain more than is generally believed in understanding technological change. Efficient innovation policy should therefore be tailored to match those sectoral characteristics