The purpose of this paper is to demonstrate the usefulness of applying a user-producerperspective to innovation. A set of analytical and normative propositions - which are neithertrivial nor conventional are developed by focusing upon the relationships and the interactionbetween users and producers of innovations.
The ideas presented reflect a collective effort. Since 1977, the IKE group, consisting mainlyof economists but also attracting other social scientists and engineers, at the Institute of Production, Aalborg University, has been working on problems relating to industrial develop-ment, international competitiveness and technical change. The approach has been hereticrather than mainstream, and eclectic rather than dogmatic. It was developed partially byimporting and borrowing from some different new schools with quite disparate origins.One of the main imports came from France, where Perroux and his followers have put greatemphasis on the analysis of vertically organized systems of production. Another came forUK, where Christopher Freeman and others at SPRU have focused upon industrialinnovations. In Aalborg a new combination has been tried. Innovative activities withinvertically organized units, as verticals of production, industrial complexes and nationalsystems of production, have been analyzed.The empirical work pursued so far, should be regarded as exploratory. The hypotheses testedhave been crude, reflecting a certain vagueness in the theoretical framework. This paperrepresents a modest attempt towards a clarification. Empirical work from the IKE groupwillbe referred to occasionally, but no comprehensive presentation will be attempted.In developing the argument, I have leaned heavily on some central works by NathanRosenberg and Kenneth Arrow. Rosenberg's analysis (1972, 1976, 1982) of how usersinteract with producers in specific parts of the economy and under specific historicalcircumstances, has helped to clarify many of the problems involved. Arrow's works (1962,1969, 1973) on uncertainty and organization theory have inspired essential parts of theconceptual framework.This paper is divided into seven different parts. Part 1 Introduces fundamental concepts andpostulates. Part 2 is a discussion of the relation between market and organization. Part 3presents empirical illustrations of unsatisfactory innovations originating from specific user-producer relationships. Part 4 and 5 apply the user-producer perspective to, respectively,locational problems and the science technology nexus. Part 6 relates a number of propositionsto units of analysis at different levels of aggregation. In Part 7 some concluding remarks arepresented.The user-producer perspective has, thus, been applied to a broad and diverse range of phenomena. This is reflected in the presentation which also has brought me into sub-disciplines of economics, where my expertise is minuscule. There is ample room for users totake part in the debugging of this semi-finished product.