Strategic innovation: The third industrial stage

This dissertation analyzes the changed nature of competition between U.S. and Japanese companies in electronics-related industries since the 1960s for the purpose of developing an alternative to the historical model described by Piore and Sabel in The Second Industrial Divide.; Substantial changes have taken place in the competitive environment for these industries as a result of the introduction of continuous improvement and innovation by Japanese companies and the subsequent acceleration of product innovation by American companies. This raises the question whether flexible specialization is adequate to describe the emerging industrial stage since leading companies are no longer reacting to exogenous technological change but pro-actively using complex innovation systems to produce endogenous technological change.; To provide case data, this dissertation examines how innovation systems both within and among companies have been used in electronics-related industries in the United States and Japan to produce continuous product and process innovation. Some of the aspects of innovation systems touched upon include: mechanisms used by postwar Japan to encourage diffusion of Western manufacturing technology and support collaborative learning among companies; strategies used by Japanese companies to maintain continuous process improvement and product innovation; the relationship between the increased pace of innovation and the success of collaborative regional networks such as that based in the Silicon Valley; and the various mechanisms used by U.S. companies such as Intel and Hewlett-Packard to facilitate and implement product innovation.; Based on this case evidence, an alternative to Piore and Sabel's third stage is proposed, strategic innovation, which involves pro-active development of innovation systems instead of reactive flexibility, flexible integration instead of flexible specialization, and mechanisms that support collaboration. In contrast to the Piore and Sabel model which views the need for flexibility in the production process as the driving force for change and which has been used to rationalize downsizing and market relationships, this model shifts the focus to the innovation process where integration and collaboration is essential.