Title: Institutional frameworks and radical innovation: an analysis of high- and medium-high-technology industries in Germany

Authors: Matthew M.C. Allen; Heinz-Josef Tüselmann; Maria L. Aldred

Addresses: Manchester Business School, The University of Manchester, Booth Street West, Manchester, M15 6PB, UK. ' Centre for International Business and Innovation, Manchester Metropolitan University Business School, Aytoun Street, Manchester, M1 3GH, UK. ' Manchester Metropolitan University Business School, Aytoun Street, Manchester, M1 3GH, UK

Abstract: Radical innovation is increasingly becoming the focus of attention of both policy makers and senior corporate managers. However, debates within the varieties of capitalism literature on the ease with which radical innovation can be achieved within less de-regulated economies, such as Germany, have tended to focus on the pharmaceutical industry. This article demonstrates that attempts to assess the extent to which the socio-economic institutions typically associated with Germany support radical innovation should be broadened to cover other sectors besides the pharmaceutical industry, as the distinctiveness of that sector has yet to be firmly established. This article proposes theoretical reasons to suggest that the pharmaceutical industry may not be as distinct, in terms of radical innovation, from other sectors as it is often implicitly assumed to be. These arguments are assessed using the large-scale, representative survey data. This paper opens up new areas that can be explored in future research. The core finding is that pharmaceutical firms are not statistically more likely to introduce radical innovations compared to those in many other high-technology and medium-high-technology industries. In addition, works councils and sectoral collective agreements do not hinder the development of new technologies. Both of these findings have important public-policy implications.

Keywords: varieties of capitalism; institutional frameworks; radical innovation; institutional change; Germany; works councils; sectoral agreements; collective agreements; high-technology industries; medium-high-technology industries; policy makers; senior managers; corporate managers; deregulated economies; pharmaceutical industry; socio-economic institutions; industrial sectors; new technologies; public policy.

DOI: 10.1504/IJPP.2011.043558

International Journal of Public Policy, 2011 Vol.7 No.4/5/6, pp.265 - 281

Received: 13 Sep 2010
Accepted: 26 Apr 2011
Published online: 14 Jan 2015 *

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