The Voyage of the Beagle into innovation: explorations on heterogeneity, selection, and sectors

Abstract

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 patterns that can be interpreted as research, user, external, and production ingredients of innovation. All too often it is assumed that how firm innovate can be represented by differences across sectors and/or countries. To put this proposition under scrutiny, we partition variability of the factors scores into components identified by these higher levels. Sectors and countries matter to a certain extent, but far more of the variance is given by heterogeneity among firms within both of them. However, groups of firms produced by cluster analysis account for much higher share of the variance, which indicates that the most relevant stratification of the data cuts across the established sectoral and national boundaries. We discuss implications of these findings for understanding of selection in evolutionary economics and for the literature on innovation systems.

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