Microsoft Word bal paper with addendum doc

1.7 The high technology bias and modes of innovation 

Given the definitions above, innovation and innovation policy is not of interest only for industries 

that invest intensively in R&D. industries. But all the same there has been a certain bias in the 

direction of these so-called High Technology industries. Keith Smith and other innovation scholars 

have demonstrated that there is a lot of innovation going on also in so called Low Technology 

industries and that most of these industries, to some degree, base their innovations on the use of 

science. On the other hand empirical work shows that it is fundamental for the performance of firms 

in high technology industries to engage in organisational learning.   

To clarify these relationships we have developed a distinction between two modes of innovation. 

On the one hand innovation activities may give main emphasis to promoting R&D, utilising and 

creating access to explicit codified knowledge (STI-mode of innovation). On the other hand there 

are innovation strategies mainly based on learning by doing, using and interacting (DUI-mode of 

innovation). These will typically involve organizational frameworks and relationships between 

employees that utilize implicit knowledge and promote interactive learning. One is experience-

based and the second is science-based. (see Jensen, Johnson, Lorenz and Lundvall 2004).  

My point here is that the innovation system needs to encompass all combinations of high and low 

technology industries as well as all elements that refer to the two modes of innovation (se diagram 

1): 

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