ated, interactive, and iterative nature" (Rosenberg and Steinmueller 1988, p231). As Hamel and Prahalad (1994) have recently stressed, absorption and integration are just as central to successful innovation as invention and often the more decisive processes in industries with fairly stable underlying technological orders. The growing recognition that innovation involves absorption and integration as well as invention has implications for our understanding of systems of innovation at all levels. We have seen earlier how prevailing mindsets and ideologies in different cultures lead to different levels of emphasis on inventive versus absorptive capacity at all levels from national economy to the individual firm (Kaplan 1987, Reich 1987, Rosenberg and Steinmueller 1988, Bolton 1993). Innovation patterns are also affected by the underlying technology regimes governing industry evolution, with implications for whether technological changes are more likely to appear from existing players or from new entrants. Malerba and Orsenigo (1997, p.84) have distinguished among two main patterns of innovation, 'creative destruction' and 'creative accumulation'. The first is a 'widening' pattern of innovation at sector level that is related to an innovation base which is "continuously growing through the entry of new innovators and to the erosion of the competitive and technological advantages of the established firms" (p.86). The second is a 'deepening' pattern that is related to "the dominance of a few firms which are continuously innovative through the accumulation over time of technological and innovative capabilities" (p.86). Others have referred to these two patterns of innovation as 'competency destroying' and 'competency enhancing' (Abernathy and Clark 1985, Tushman and Anderson 1990). Competency enhancing innovations are embedded in the technologies that they replace, like the turbofan advance in jet engines. They tend to emanate from the existin...
