Innovation and institutional change: the transition to a sustainable ...

Theoretical perspectives 45
firm’s core capabilities 8 (Leonard-Barton, 1992) and from the established
designs of technologies and products (Tushman and Anderson, 1986). The
results are patterns of incremental innovation that introduce relatively minor
changes to existing products, exploit the potential of the established design,
and often reinforce the dominance of established firms (Henderson and
Clark, 1990: 9). Based on Abernathy and Clark (1985: 5), Table 2.3 provides
the type of innovation patterns that typically grow out of the existing system
and its structures.
Table 2.3 Innovation patterns growing out of the existing system
Innovation aspect
Innovation patterns
1) Technology/Production
design/embodiment of technology improves/perfects established design
production system/organisation strengthens existing structure
skills (labor, managerial, technical) extends viability of existing skills
material/supplier relations reinforces application of current materials,
suppliers
capital equipment extends existing capital
knowledge and experience base builds on reinforced application of existing
knowledge
2) Market/Customer
relationship with customer base strengthens ties with established customers
customer applications improves service in established application
channels of distribution and service builds on and enhances the effectiveness of
established distribution network/service
organisation
customer knowledge uses and extends customer knowledge and
experience in established product
modes of customer communication reinforces existing modes/methods of
communication
At the level of networks, firms are embedded in networks that co-evolve
with the nesting of their products and technologies in product chains and
technological systems. With regard to their innovative activities, the
8 Leonard-Barton (1992: 113) defines a core capability as the knowledge set that
distinguishes and provides a competitive advantage. This knowledge set has four
dimensions: skills and knowledge base, technical systems, managerial systems, and values
and norms. “All four dimensions … reflect accumulated behaviours and beliefs based on
early corporate successes” (p. 114).