The Voyage of the Beagle in Innovation Systems Land. Explorations on Sectors, Innovation, Heterogeneity and Selection

Martin Srholec & Bart Verspagen


The aim of the paper is to assess heterogeneity of the innovation process. Using exploratory factor analysis on micro data from the third Community Innovation Survey in 13 countries, we identify four factors that that can be interpreted as research, user, external and production ingredients of innovation. All too often it is assumed that the differences between the rates at which these factors are found in firms' innovation strategies can be accounted for by differences across sectors and/or countries. To put this proposition under scrutiny, we partition variability of the innovation process into components identified by the different levels. The analysis shows that sectors and countries matter to a certain extent, but far most of the variance is given by heterogeneity among firms within either sectors or countries. On the other hand, a grouping of firms produced by cluster analysis ac-counts for a much higher share of the variance, which implies that the most relevant contextual fac-tors cut across the established boundaries between sectors and countries. We discuss the implica-tions of these findings for the literature on national and sectoral systems of innovation, and for the way in which evolutionary economics has analyzed the role of selection.

Keywords: Innovation, heterogeneity, sectoral systems of innovation, factor analysis, variance com-ponents analysis.

UNU-MERIT Working Papers ISSN 1871-9872