Innovation Systems and Innovative Performance: Voice Systems

Abstract

The literature on `exit' and `voice' countries (Anglo-American versus continental European economies and Japan) points to performance differences between these two generic systems of innovation. However, little has been done so far to study differences among voice countries. This paper suggests that four `voice' countries, Austria, Finland, the Netherlands, and Germany, with stable long-term trust relations between economic actors and a relatively consensual style of decision making, show substantial differences in innovative performance. I argue that this is due to both sector specialization and the institutional environment. This is because the capacity to escape from historical patterns of industrial specialization depends in part on the set of institutions in a country. They provide important resources for innovation, such as capital and skilled personnel. Indirectly, innovations are affected by the system of economic governance, which is more or less corporatist in these four countries. However, a corporatist regime can be responsive or rigid, depending on the degree of exposure to external challenges and crises (regime effect). Furthermore, the same responsive or rigid regime can result in different types of innovation, depending on whether firms have to operate in a competitive, highly exposed sector or in a sheltered one (sector exposure effect). The first tentative empirical results show that the regime effect dominates over the sector exposure effect.