Innovation as Collective Action: Conventions, Products and Technologies

This article argues that specific products evidence demand forspecific innovation systems. Economies must therefore supplydifferent innovation systems according to their trade specializationsand output compositions. Products (or product-based subsectors,the equivalent of five-digit SIC sectors) are the basic unitsaround which innovative action can be ‘supplied’.Understanding and promoting innovation requires understandingof both the demand and supply sides. A system of innovationrefers to the interaction of demands, attached to products,and supplies, attached to these organizational structures ofthe economy, as dual sequential processes ‘out of equilibrium’and involving reciprocal selection. The approach used in thispaper reflects the ‘economics of conventions’, anemerging school of economic thought which holds that economiescan be conceived as sets of rules, largely implicit in nature,which actors generate and by which they coordinate themselvesunder conditions of uncertainty. The task of analysis is tounderstand the cognitive and efficiency properties of functioningsytems of conventions, as well as their emergence and transformationover time.