The Organization of Economic Innovation in Europe

The book is divided into two parts. The first deals with the patterns of innovative activity in Europe and the second focuses on inter-firm collaborations and research networks.

After a short introduction, Giovanni Dosi and Luigi Marengo set the tone for the remaining part of the first part of the book by stressing the co- evolution of knowledge and organisation. They argue that path dependence, location and tacit knowledge are crucial for organising innovation. These arguments are also viewed as being important in the chapter by Keith Pavitt and Pari Patel (chapter 3). They find that in-house learning is an important determinant of the accumulation of these competencies. In chapter 4, Franco Malerba and Luigi Orsenigo deal with entry and exit of firms thereby dividing technological entry and exit into `real' and `lateral'. Their key finding is that while technological regimes affect both types of entry and exit, lateral entry and exit is also affected by technological proximity and by the degree of pervasiveness of a technology. Chapter 5 (Stefano Breschi) and 6 (Peter Swann) elaborate upon Dosi and Marengo's point of the importance of `location'. Using patent data, Breschi finds important differences in the spatial agglomeration of different sectors and technological regimes. Swann observes that the larger European countries have many industrial clusters, while the smaller countries are probably too small to establish such clusters. Finally, the findings of the chapters in the first part are applied by Nick Von Tunzelmann (electronics industry) and Cristiano Antonelli and Mario Calderini (mechanical engineering) to show their empirical relevance.

In the second part of the book Patrick Llerena and Mireille Matt set the agenda for analysing inter-firm collaborations and research networks by discussing policy aspects of inter-firm collaborations. They focus on a market and an organisational perspective. These perspectives serve as a vehicle for the next three chapters, which all consider different industries. Antoine Bureth, Sandrine Wolff and Antonello Zanfei (chapter 10) look at the European electronics industry; Salvatore Torrisi (chapter 11) compares the European and US software industry; and Margaret Sharp and Jacqueline Senker (chapter 12) discuss learning and catching-up in the European biotechnology industry.

The most interesting parts of the book are chapters 13-15, which focus on research networks and the opportunities for cooperation in a European context. Paul David's work has shown that effective policies for the promotion of competitiveness and long-term economic growth through innovation in any country or region must be based on a consistent building block which generates, distributes, and exploits scientific and technological knowledge. In a relatively long but appealing and convincing contribution, David (with Dominique Foray and Edward Steinmueller) re-examines and extends his work by stressing the importance of explicitly dealing with the norms and behavioural styles of individuals and organisations in the institutions that form networks to develop science and technology. Only if consistent and useful complementarities are found and the right incentive structure is provided, will European efforts to organise innovation be able to blossom. This chapter is complemented by two studies of Aldo Geuna. The first (with Walter Garcia- Fontes) studies the effects of the funding effort by the European Commission (EC) on the supply and the demand of funds. The econometric results suggest that the EC generally serves short-term objectives, whereas long-term strategies are needed for a coherent innovation policy. In the final chapter, Geuna applies the framework of chapter 13 to an analysis of resource-allocation criteria between networks of universities.

The general tone in Gambardella and Malerba's book is that the concept, theoretical nature, and empirical application of the efficient organisation of economic innovation constitute an important contribution to a European science and technology framework. While the first part is a well- structured and thoughtful approach to going into patterns of innovative activity, it fails to provide many new insights into organising innovation in Europe. The more interesting contributions are found in the second part, which present an extremely useful and timely study of how to organise innovation.