ides (1997) has shown, many other aspects of business management, including novel approaches to marketing and logistics, have been just as radical in their effects on industry evolution as technological discontinuities. In this, he provides ample support for the conclusion drawn by Abernathy and Clark (1985, p7) from their analysis of Timex's entry into the watch industry that "novelty and scientific advance may have little to do with an innovation's competitive significance". Innovations in organisation and management can be just as significant, as the MIT study of the world automobile industry has demonstrated (Womack et al 1990). In fact the rise of the new industrial powers like Japan, contrasts with the earlier experience of countries like Great Britain, Germany and the United States in being based primarily on management innovation rather than technological innovation in the more traditional sense (Drucker 1988, Stata 1989). The emphasis on absorptive capacity and collective entrepreneurship has also focused attention directly onto the importance of institutional learning processes in competing on innovation. Stata (1989, p.64) is not alone in his view that "the rate at which individuals and organisations learn may become the only source of sustainable competitive advantage". Absorptive capacity, with its emphasis on the importance of externally-generated knowledge also broadens our perspective on innovation from the traditional focus on intra-organisational processes to inter-organisational relationships. As such it raises interesting questions about institutional learning processes not only at organisational level, but also at sector and regional levels as well, and how such learning processes are stimulated or inhibited by competitive and collaborative relationships among firms. Traditionally, in the economics field, research on the diffusion of innovation and learning throughout industries and sectors has tended to focus on me...
