nnovation not only within individual firms but more reflexively throughout the region and sector (Saxenian 1991, Bahrami 1992).The innovation process - invention, absorption and integrationA second major theme linking the literature across different levels and disciplines is the growing recognition that invention is only one aspect of innovation, and often not the most significant aspect. Innovation also involves processes of absorption and integration. The tradition in western management and economics has been to associate innovation primarily with technological development, and in particular with frame-breaking technological change. When such breakthroughs happen they are often spectacular in their effects at firm, industry and national levels, as the histories of inventions like xerography, polymers and solid state electronics can attest. However, such discontinuities are relatively rare, the main benefits that flow from them do not always go to the inventing firms and their economic regions, and technological change is not the only or even the most significant form of innovation in many cases. To date, the pattern of technological development in most industries has been one of long periods of evolution punctuated by rare episodes of radical change. Tushman and Anderson (1986), for example, found a total of just eight discontinuous changes over the combined 190-year histories of the US cement, airline and minicomputer industries up to the early 1980s. There was just one such change in the 200-year history of the Irish distilling industry (Leavy and Wilson 1994). When such radical changes have occurred, the major economic rewards have not always gone to the inventors. EMI in scanners, De Havilland in jet aircraft, and Xerox in personal computers are among the classic examples of inventive firms that failed to reap the lion's share of the economic rewards flowing from their technological breakthroughs. In many industries the technologi...
