01

• Technical change:

  • Change in the amount of output produced from the same inputs

  • New goods and services

  • New inputs in production process

  • New methods of producing goods and services

  • New ways of operating and managing organizations

• Technological change

  • Innovations in products and production processes

• The change in technology does not affect the entire process of production

• but just the techniques currently being used

• Adoption is a process of selecting a product for use by an individual or organization

• Diffusion is a process by which an innovation is communicated through certain channels over time among the members of a social system

Commercialization and application of an invention of a process or product that meets user or market needs

• Depends on whether the innovation involves products or processes

• Market pull

• Technology push

• Profit matters

Process of creating a new idea or method that might be patented or not

New entrants and new technologies displace incumbent firms, existing products or processes —> Creative destruction

Incumbent firms gradually improve existing technologies through “learning by doing” or “learning by using”

Combination of radical/incremental technology innovations combined with organizational changes resulting in the creation of entirely new sectors

Large-scale, revolutionary changes carried by new technology systems —> Kondratiev long waves

Incumbent firms

• look for new technologies and

• try to integrate them into functioning processes and products together with the established ones,

• thus producing “evolving knowledge”

• Technique of production

• Scale of production

• Location of production

• patterns of industrial innovation

Global Innovation Index (GII)

• The Innovation Input Sub-Index is the average of the first five pillar scores

• The Innovation Output Sub-Index is the average of the last two pillar scores

• The overall GII is the average of the Input and Output Sub-Indices

• The Innovation Efficiency Ratio is the ratio of the Output Sub-Index over the Input Sub-Index