Policy and Innovation in Low-Tech

The PILOT Project was funded within the European Commission’s Key Action Improving the Socio-economic Knowledge Base. This website was created to present the Pilot Project and provide newsletters twice a year to interested parties for the three year duration of the project. After the Project was over the site's domain was not renewed and the site, as it originally was, disappeared from the internet.

PLEASE NOTE THAT THIS IS PAGE CONTAINS SELECTED ARCHIVED CONTENT FROM THE ORIGINAL SITE.

Recently I was doing some google searches to find an online site that would be able to replace eyeglasses lenses without the need to drive to an eyeglasses store. I live waaay out in the country and driving two hours to a store to get lenses replaced is not my idea of fun. I lucked out finding a site that allows you to mail your glasses and they will install the replacement lenses. And if you have a new prescription mail that along with the frames, and a phone number. An actual optician will call to discuss the best, high quality lens choices and options for your needs. The site offered all kinds of replacement lenses, including single vision, progressive, bifocal, and trifocal replacement lenses with their replacement lens materials running the full gamut, from plastic and polycarbonate, to high index, Trivex and even glass lenses. After I finished dealing with my eyeglass lenses, I then did a search for domains that are available to buy. I do this periodically for fun. That's when I discovered that the pilot-project.org's domain had become available I bought it with the goal of rebuilding as much of the information as was possible from it's archived pages. I had followed the Pilot Project when I lived in Europe so I understood the significance of what they were trying to achieve. Consider my result as a historical snapshot of the Pilot project from 2003-2005.

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Project Idea

It is a general understanding that mature industrialised nations currently undergo a fundamental transformation into ‘Knowledge Societies’. The competence to generate, take up and utilise new knowledge is seen as decisive factor for both economic success and societal progress. Permanent innovation demands flexible adaptation of production processes, organisational structures and the workforce. There is a firm belief that in this situation the improvement of ‘high-tech’ industries is the key to welfare. Correspondingly, in this scenario so called ‘low-tech’ sectors appear to be less important in and for the major industrialised countries. Depending on the political attitude they are regarded as an obsolescent model or an endangered species. Due to the global division of labour the appropriate place for producers of seemingly mundane goods such as simple gaskets, office material, corrugated paper boxes, standard kitchen furniture, and bath tubs are less developed and low-wage regions. Hence, so the argument continues, up-to-date economic and technological policy should primarily support the emergence and development of competitive, knowledge-intensive high-tech sectors.

Starting point of PILOT is a fundamental critique of this widely held belief. Basically, the sketched argument conjures away the role of low-tech industries – in manufacturing as well as in service sectors – in the current structural change in advanced economies. In fact, many of the processes we witness today are based on developments outside the realm of high-tech. As empirical studies show, low-tech industries are and will be in the foreseeable future – important not only for employment and growth but also for knowledge formation in European economies, the usually underestimated innovative capabilities of these industries support rapid technological change elsewhere, low-tech products and companies are very often a crucial precondition for the innovative ability of whole value chains and for the design, fabrication and application of high-tech products of various kinds.

Project-Number: HPSE-CT-2002-00112
Funded by: European Commission, Key-Action "Improving the Socio-Economic Knowledge Base"
Project Duration: December 2002 - November 2005

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The PILOT project is comprised of partners from nine European countries. The national research teams have conducted a series of case studies on non-research-intensive, so called low-tech companies in eleven countries, investigating their value chains and regional networks, and the policies that impact on these firms and on low-tech and medium-low-tech (LMT) sectors in general.  A second thread of work has been quantitative analyses of the contributions of these industries to employment, growth and innovation in OECD countries. Finally, the members of the project made a number of conceptual advances.

Among the most important results are the following:

The project established that most growth and employment in OECD countries still emanate from LMT industries. It provided ample evidence of the existence, and in many cases the crucial importance, of non-research based innovation. The analysis shows that innovativeness is based on a particular enabling configuration of resources that a company possesses rather than on excellence in R&D alone. In fact, PILOT found that significant innovation might occur in the absence of any activity that could be classed as R&D under commonly used definitions.

Internal organizational practices - knowledge management and personnel policy in particular - play a vital role for innovation in and the innovativeness of LMT firms, while network relations between companies and supportive social networks on a regional level are also important, as they are resources for firm capabilities. The analysis also substantiates that interrelationships of mature LMT sectors on the one hand and young high-tech sectors on the other are of major importance for the innovativeness of industry in general.

In relation to policy, PILOT has provided evidence that there has been a bias in policy towards science-based innovation and high-tech industries. This is a problem because the relationship between R&D and high-tech on the one hand and economic success on the other is at best tentative. Efficient and sustainable policies to support innovativeness should therefore be non-discriminatory; that is to say, policy makers should be aware that "LMT actors" are an important segment of a country's innovation infrastructure.

On a more general level, PILOT's results lend support to a new understanding of the restructuring of the economic landscape of Europe in the early years of the 21st century. Europe's future does not appear likely to result in wholesale structural replacement of "old" sectors with "new" ones, or to a sweeping substitution of "old" technologies with "new" ones, but rather to lead to a continually changing blend of technologies of various vintages. This process of change is evolving as a restructuring of sectoral and technological systems, transformed more from within than from without.

It is not dominated by industrial activities for which competitive advantage, capability formation and economic change are generated by front line technological knowledge. Rather, it is dominated by what are often pejoratively termed low-tech and medium-low-tech industries. And it is unambiguously characterized by the continuous combination and re-combination of high and low-tech attributes.

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From 2003-2005 there were 6 newsletters, which were published each May and November. Below is part of the first newsletter.

Pilot NewsLetter 1

May 2003

 

Editorial

The PILOT took off: Research on the Importance of Low-tech Industries in High-tech countries
Gerd Bender (University of Dortmund)
Know-how in a Low-tech Company: Chances for Being Competitive in a Globalised Economy
Staffan Laestadius (Royal Institute of Technology, Stockholm)
The Low-tech Policy
David Jacobson & Kevin Heanue (Dublin City University)

Editorial

Dear readers, This is the first issue of the PILOTNEWSletter which will be published each May and November for at least the coming three years. The major objective of this newsletter is to provide you with first hand information about progress, findings and preliminary conclusions of the project Policy and Innovation in Low Tech – Knowledge Formation, Employment and Growth Contributions of the “Old Economy” Industries in Europe (PILOT). This multidisciplinary and international research project is funded within the European Commissions Key Action “Improving the Socio-economic Knowledge Base”.

In this issue we want to present the basic ideas behind PILOT and the work we are going to do. The first article gives you an overview of the project’s objectives and methodology. The following two papers are revised versions of talks held at the PILOT Kick-off Conference on 14 February in Dortmund. I would like to thank the authors for this extra work.

The PILOT-NEWSletter is by no means a “closed shop”. We will occasionally invite academic colleagues, businessmen and policy makers working in the field for contributions. We would be happy in particular if so called low-tech companies would present themselves in this newsletter.

If you want to use this newsletter to present your work or company to a broader audience do not hesitate do get in contact with the editor. I hope you will enjoy this issue! Gerd Bender

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The PILOT took off: Research on the Importance of Low-tech Industries in High-tech countries by Gerd Bender The PILOT project started in December 2002 and will run over a period of three years. Social scientist from nine European countries investigate the contribution of so called low-tech industries for employment and growth for Europe on the threshold of what many label the knowledge society.

Project Idea

It is a general understanding that mature industrialised nations currently undergo a fundamental transformation into “knowledge societies”. And the competence to generate, take up and utilise new knowledge is seen as decisive factor for both economic success and societal progress. Permanent innovation demands flexible adaptation of production processes, organisational structures and the workforce. There is a firm belief that in this situation the improvement of “high-tech” industries is the key to welfare.

Correspondingly, in this scenario so called “low-tech” sectors appear to be less important in and for the major industrialised countries. Depending on the political attitude they are regarded either as an obsolescent model or as an endangered species. Due to the global division of labour the appropriate place for producers of seemingly mundane goods such as simple gaskets, office material, corrugated paper boxes,

standard kitchen furniture, and bath tubs are less developed and low-wage regions. Hence, so the argument continues, up-to-date economic and technological policy should primarily support the emergence and development of competitive, knowledge-intensive high-tech sectors.

Starting point of the PILOT project is a fundamental critique of this widely held belief. Basically, the reasoning just sketched conjures away the role of low tech industries – in manufacturing as well as in service sectors – for the current structural change in advanced economies. Our somewhat provocative thesis is that there is no empirical reason to do so. In fact, much of the progress we witness today is based on developments outside the realm of high tech.

 

As studies show,

  • Low-tech industries are – and will be in the foreseeable future – important not only for employment and growth but also for knowledge formation in European economies,
  • The usually underestimated innovative capabilities of these industries support rapid technological change elsewhere,
  • Low-tech products and companies are very often a crucial precondition for the innovative ability of whole value chains and for the design, fabrication and application of high-tech products of various kinds.

Project Objectives

The project aims at deepening the understanding of growing knowledge intensity of the economic and social development in Europe. It is assumed that the process depends not only on industries with frontline technological knowledge but also on low-tech industries. These are not necessarily low-growth industries; many companies and branches within these sectors are growing fast, are inter-linked with high tech and service branches and provide an important basis for growth and employment in the future. The role and importance of these industries in different European nations and for the economic and social prospects of Europe as a whole are analysed.

 

Mapping and analysing learning processes and innovation patterns, the PILOT project tends to identify the deep, complex and systemic knowledge base that contributes to innovation and knowledge creation in low-tech industries and particularly in individual companies. This will also allow to identify systemic interdependencies between low-tech and high-tech sectors in a network perspective.

 

The main objectives of the project are:

  •  To formulate viable concepts of “knowledge and technological intensity” and “learning process” with a wider applicability and a deeper analytical basis than those currently available;
  • To determine the role and importance of specific low-tech industrial sectorsfor the innovative abilities of regions and/or nations;
  • To identify the knowledge base that enables innovation and knowledge creation in low-tech industries;
  • To ascertain the relevance of firmlevel knowledge from a network perspective to gain an understanding of innovative ability along whole value-chains, including high-tech and service companies;
  • To contribute to the formulation of policies on industrial restructuring which pays appropriate attention to the significance of low-tech industries for the further economic and social development of Europe.

Project Methodology

The PILOT project is subdivided into six work packages. Research pursues a double-tracked methodology.

On the one hand, conceptual, taxonomic and data issues are tackled. The currently dominating concepts of “technology and knowledge intensity” and of the “learning process” in firms do not contribute very much to an understanding of low-tech industries and their relevance for innovation and growth. Hence, it is inevitable to depart from both the high-tech concept and from the industry classification based upon it and to develop a new conceptual framework. There is a dedicated work package within the project which addresses questions like these. contact: staffan_laestadius@lector.kth.se

The second work package is devoted to an empirical investigation of the role and function of low-tech industries for economic growth and more general to statistical analysis of the extent to which growth is based on innovation.

contact: johan.hauknes@step.no

On the other hand, single low-tech firms and interactions between such companies are scrutinised. The empirical core of the project is an extensive series of case studies in ten countries across Europe. Emphasis is placed on their use of technologies, on typical patterns of innovation and of knowledge creation as well as on the importance of (which) formal skills and qualifications (cf. Laestadius in this issue). This is basically the content of the third work package. contact: klaus.schmierl@isf-muenchen.de

Other issues are the collaborative behaviour of firms in different regions and the quality of employment and qualification structures in low-tech industries in the future.

Analysis focuses on three levels:

  • individual companies
  • inter-firm networks (fourth work package) contact: a.bardi@ipielle.emr.it
  • impact of innovation and industrial policies on the development of lowtech sectors (fifth work package);

contact: david.jacobson@dcu.ie cf. Jacobson & Heanue in this issue.

Expected Results

The project will determine the importance of low-tech industries for innovative and sustainable growth in Europe; it will be the first large-scale integrated project to do this. An enhanced theoretical and empirical understanding of industrial structures will allow valid assessments of low-tech industries’ contribution to growth, employment and knowledge creation in the economy. Furthermore, policy implications for employment, welfare and cohesion in Europe will be elaborated and corresponding recommendations will be prepared.

Contact: Dr. Gerd Bender Faculty for Economic and Social Sciences University of Dortmund D-44221 Dortmund
g.bender@wiso.uni-dortmund.de

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Publications

 

  • Hartmut Hirsch-Kreinsen and David Jacobson 2008 (eds.): Innovation in Low-tech Firms and Industries, Cheltenham: Edward Elgar
  • Hartmut Hirsch-Kreinsen:
    "Low-Technology": A Forgotten Sector in Innovation Policy.
    In: Journal of Technology Management Innovation, Vol 3, No 3 (2008), pp. 11-20
  • Holm-Detlev Köhler:
    Profit and Innovation Strategies in Low-Tech Firms
    In: Estudios De Economia Aplicada, 2008, Vol. 26-3, Art. 26XXX
  • Hartmut Hirsch-Kreinsen:
    Innovation Strategies of Non-Research-Intensive SMEs.
    In: Bluhm, Katharina; Schmidt, Rudi (eds.)2008: Change in SMEs. Towards a New European Capitalism? palgrave macmillan: Houndmills et al., S. 171-185
  • Hartmut Hirsch-Kreinsen:
    Low-Tech Innovations
    In: Industry & Innovation, Vol. 15 (1), February 2008, pp. 19-43
  • Hartmut Hirsch-Kreinsen:
    "Low-Technologies" : A forgotten sector in Innovation Policy, Paper presented at the ProAct Conference "Innovation Pressure" , 15 - 17th March 2006, Tampere/ Finnland (the paper has been awarded as one of the three most excellent conference papers)
  • Gerd Bender: Peculiarities and Relevance on Non-Research-Intensive Industries in the Knowledge-Based Economy, Final Project Report, Dortmund 2006
  • PILOT Project Consortium:
    "Low-Tech" Industries: Innovativeness and Development Perspectives - Executive Summary of a European Research Project, Dortmund 2005
  • PILOT Project Consortium, edited by Hirsch-Kreinsen, Jacobson, Roberstson:
    "Low-tech" Industries: Innovativeness and Development Perspectives - A Summary of a European Research Project, Dortmund 2005
  • G. Bender, D. Jacobson & P.L. Robertson (eds.), Non-Research-Intensive Industries in the Knowledge Economy.  In: Perspectives on Economic Political and Social Integration. Special Issue, Lublin,2005, available soon
  • Hartmut Hirsch-Kreinsen, David Jacobson, Staffan Laestadius (eds.) 2005:
    Low-tech Innovation in the Knowledge Economy , Frankfurt et al.: P.Lang
  • Staffan Laestadius:
    The rise and fall of management of innovation - the transformation of a concept and of management practice in the knowledge economy. In: J. Sundbo (eds.), Are We measuring the right Thing, Palgrave, forthcoming) 2005
  • David Jacobsen:
    Low Tech and R&D Spending: Problems in Policy for Innovation, TASK (think tank for action on social change), April, 2005, www.tascnet.ie
  • Hartmut Hirsch-Kreinsen:
    Low-Tech-Industrien: Innovationsfähigkeit und Entwicklungschancen. In: WSI Mitteilungen 3/2005, S.144-150
  • Tadeusz Borkowski, Aleksander Marcinkowski:
    Socio-Psychological Determinants of the Innovation Implementation in an Enterprise. In: E. Okoń-Horodyńska (eds.),The role of Science in the Increase of the Economy´s Innovativeness, Polish Economic Association, Warszawa 2004, pp. 197-220
  • Tadeusz Borkowski, Aleksander Marcinkowski:
    On Multidimensional Meaning of Innovation, Proinnovative Organizations and Proinnovative Thinking. In: J. Skalik (eds.), Change as a Precondition of Sucess. Change and Organization´s Innovativeness, Prace Naukowe AE im. O. Langego we Wroc³awiu, Vol.1045/2004,pp.30-40
  • Gerd Bender:
    Innovation in Low-Tech-Considerations based on a few case studies in eleven European countries. September 2004
  • Hartmut Hirsch-Kreinsen:
    "Low-Technology": Ein innovationspolitisch vergessener Sektor. February 2004
  • Zbigniew Zaleski:
    Internal and external determinants of innovation in small, low-tech enterprises. A socio-psychological approach.In: Journal for Perspectives of Economic Political and Social Integration,Vol.IX, 2003, No.1-2; pp.169-196
  • Paul L. Robertson, Eduardo Pol and Peter Carroll:
    Receptive Capacity of Established Industries as a Limiting Factor in the Economy`s Rate of Innovation. In: Industry and Innovation, Vol.10, No.4,2003,pp.457-474
  • Paul L. Robertson, Thomas Keil and Erkko Autio:
    Weak and Strong Ties, Individualism-Collectivism, and the Diffusion of Technological Knowledge. In: David V. Gibson, Chandler Stolp, Pedro Conceiçâo and Manuel V. Heitor (eds.), Systems and Policies for the Globalized Learning Economy, Series on "Technology Policy and Innovation.Vol.3,Westport,Ct: Praeger, Chapter 10,2003,pp.275-305
  • Hartmut Hirsch-Kreinsen:
    Knowledge in societal development: The case of low-tech industries. In: Journal for Mental Changes. Perspectives of Economic Political and Social Intergration (Central Eurpean Institute for Behavioral Economics, KUL Lublin/Pl), Vol.VIII, 2002, No.1-2, pp.9-42
  • Low-Tech Industries and the Knowledge Economy
    State of the Art and Research Challenges

 

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