Sub-currents in the Innovations River -Explaining Innovativeness using New Product Announcements

Wilfred Dolfsma, Utrecht School of Economics and UNU-MERIT

In their seminal paper, Acs and Audretsch (1988) analyze innovation patterns across industries and identify several determinants of innovativeness, both positive and negative. Their work is seminal if only because of the unique data they use to measure innovativeness: new-product announcements. They show that industry concentration, degree of unionization would hamper innovation; industries characterized by increased shares of skilled labor and large firms provide favorable conditions for innovation. By analyzing a new and more consciously compiled database, we re-examine their original claims. Our results largely support the findings of Acs & Audretsch, but diverge from them in one important way. We suggest that the large firms do not contribute more to a industry’s innovativeness than small firms – a vindication of the Schumpeter Mark I perspective. In addition, we analyze micro-level data of individual firms. Firms within different sub-groups respond differently to their competitive environment. We show that less dedicated innovators prove more susceptible to environmental factors than more committed innovators. In addition, an unfavorable competitive environment decreases the likelihood that less successful innovators will announce new products.


Trained as both an economist and a philosopher, Wilfred Dolfsma (1970) received his PhD in Economics at Erasmus University on a study of the formation of preferences from the perspective of institutional economics. Since then he has studied innovation and the role of knowledge in the economy. This has led him to consider the role of law (esp. IPR), the geographical element, as well as social and anthropological aspects to exchanging knowledge. He was awarded the Gunnar Myrdal best book award by EAEPE in 2006 and the Hellen Potter best article in the Review of Social Economy award in 2001.

His work has been quoted nationally (such as NRC Handelsblad, Volkskrant, Trouw, Financieele Dagblad, Algemeen Dagblad, in addition to radio and television programs) as well as internationally (the Hindustan Times, Yomiuri Shimbun, Computer Woche, Heise Online)

Date: 01 February 2007