In search of useful theory of innovation

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Citation: Richard R. Nelson, Sidney G. Winter (1977) In search of useful theory of innovation. Research Policy (RSS)
DOI (original publisher): 10.1016/0048-7333(77)90029-4
Semantic Scholar (metadata): 10.1016/0048-7333(77)90029-4
Sci-Hub (fulltext): 10.1016/0048-7333(77)90029-4
Internet Archive Scholar (fulltext): In search of useful theory of innovation
Tagged: Business (RSS)

Summary (Abstract)

Nelson and Winter (1977) acts as a sort of review article and overview on the literature on patterns of technological change and innovation and a sort of high-level theory building exercise building on the previous work of Nelson and Winter over the previous decade that acts to (in large part) summarize their work. In the process, it introduces several key term (e.g., natural trajectories) that remain central to the literature on innovation in their own right.

Nelson and Winter's article is in search of a "useful" theory in that it is aimed very explicitly at building toward a theory of innovation more useful in the context of policy. The paper argues that an important (and largely unanswered) question lies in the fact that there is massive variation between industries in the amount and impact of innovation. Citing these statistics at length, Nelson and Winter make both an argument in favor of a theory that can answer these and an critique of the previous literature on innovation which (they argue) cannot. They say, "any useful and coherent theory of innovation must recognize explicitly the factors that differs across industries."

After a lengthly review of the existing literature (most of which they argue is off track), Nelson and Winter propose their own model (expanded on in depth in other papers) which includes two major points:

  • Uncertainty and a stochastic aspect to the model which can capture the uncertainty of the innovation process;
  • Innovation as a factor of institutional complexity and various forces which form a selection environment

The paper offers a number of key metaphors and terms including:

  • Conceiving of innovation as a search process.
  • Natural trajectories (i.e., Dosi's work)
  • Technological regimes (also consider)

Theoretical and Practical Relevance

Nelson and Winter (1977) has been cited over 1,000 times and remains a key text in the literature on the management of innovation. It provided a number of concepts, approaches, and high-level goals that remain influential in the direction and trajectory of the management of innovation literature more broadly.