Diversification and Specialisation in Innovative Activities: An Analysis of Patenting Activity of Electronic Firms

This paper has shed light on the processes of technological diversification and specialization by firms. European, American and Japanese firms have been examined in 25 technological fields within telecommunications, information and audiovisual technologies for the period 1978-1998. In general, in electronics technologies incumbent firms are engaged in continuous processes of technological diversfication, opening up windows on new technologies. On the contrary new innovators tend to start highly specialized and most of them remain so. From this analysis an explanation of the European weaknesses in electronics technologies based on the weaknesses of both the core and the fringe of European innovators emerges. As far as the core is concerned, in electronics Europe does not have a big core of numerous large competent companies that span over mature as well as new technologies. In this way, big projects on broad technologies, the continuous opening of windows on new technologies and the pursue of multitechnology initiatives that requite the integration of different complementary technologies may be unpaired. As far as the fringe of innovators is concerned, Europe is characterized by a too high entry of small firms specialised in mature technologies. The problem here is not entry but survival. Most of the new innovators are not able to become continuous innovators and do not survive as innovators for long. Even those that survive are unable to widen their specialisation, and move from mature to emerging technological fields. This paper has been produced within the DYNACOM research project, funded by Targeted SocioEconomic Research (TSER) Area 1.1, under the Fourth Framework Programme, European Commission (Contract n. SOE1 – CT97-1078). We thank Raffaella Piccarreta for very useful comments and suggestions and Alessandro Lezzi for skillful research assistance. Benjamin Coriat and Giovanni Dosi have helped us to improve and focus the final draft of our research.