Innovations at the Boundaries of Sectoral Systems of Innovation

by Thilo Sandner

Institution: Freie Universität Berlin
Department: FB Wirtschaftswissenschaft
Degree: PhD
Year: 2015
Record ID: 1118006
Full text PDF: http://edocs.fu-berlin.de/diss/receive/FUDISS_thesis_000000098707


Using the pharmaceutical industry as an example, this dissertation focuses on inertia in sectoral systems of innovation and on their impact on the behavior of sectoral systems of innovation at their boundaries. The central question is how the inability of an industry to adapt to changing environmental conditions at its boundaries can be explained. This goes beyond and supplements the partially narrow conceptual approaches towards the adaptability of industrial sectors to environmental changes provided by the sectoral systems of innovation framework. The analysis draws on the observable passive behavior of the pharmaceutical industry beyond pharmaceuticals, in the dynamically developing health products market. The analysis is based on a theoretical framework that complements the sectoral systems of innovation perspective by the theory of organizational inertia, providing insights into the resource allocation and routine structures of the industry and the resulting inertia. The research results show that the industrial resources (internal and external/systemic), constituting the basis of the innovation activities, as well as the routines that guide the actors’ behavior gravitate around pharmaceuticals and the pharmaceuticals market. Dependences among dynamically connected resources and routines are in place that produce inertia (resource rigidities in terms of resource dependences and lacking incumbent reinvestment incentives as well as routine rigidities in terms of organizational routines and managerial cognition) and hamper the expansion of the innovation activities beyond pharmaceuticals to health products. By unveiling those rigidities the dissertation provides insights into the interplay between sectoral dynamics and the adaptability of industries to exogenous change. The analysis shows that systemic structures can — despite their dynamics — be highly inert regarding the adaptation to changes taking parts at their boundaries. Yet, it is not only the presence of some of the rigidities that constitute systemic inertia, but their simultaneous presence, as well as the causal relations, bidirectional links (feedback mechanisms and causal links) and self-reinforcing effects between them. The research results indicate that sectoral systems of innovation can have clear boundaries. They are constituted and held up by the same dynamics that are responsible for the systemic dynamics. It becomes apparent that systemic change can be inhibited by the system itself, manifesting the systemic boundaries. Those insights contribute to the sectoral systems of innovation approach to change that emphasizes the systemic flexibility, lacking explanatory approaches for a systemic inability to expand sectoral boundaries. Die Arbeit beschäftigt sich - am Beispiel der Pharmaindustrie - mit Trägheit innerhalb von Sektoralen Innovationssystemen und dessen Einfluss auf die systemische Anpassungsfähigkeit an den Systemgrenzen. Ziel ist, aus sektoraler Sicht die passive innovatorische Position der Pharmaindustrie gegenüber der jüngeren…