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Patterns of Innovation

While the phrase patterns of innovation can refer to any research program attempting to explain modes, models, and typologies of innovation, it is most typically used to refer to research spawned by two seminal works by James M. Utterback and William J. Abernathy. Abernathy and Utterback used the phrase to refer to cycles of product and process innovation that make up industry life cycles and to describe three stages—fluid, transitional, and specific—that co-align characteristics of productive units and the innovation types they produce. Utterback and Abernathy developed their strategic framework for patterns of innovation in two papers that present a new model for understanding a business unit’s capacity for and methods of innovation based on its stage of evolution. This entry presents the central themes in these two articles, distinguishes the life cycle stages that Abernathy and Utterback identify, and discusses their importance.

Fundamentals

Utterback and Abernathy introduced the term productive unit to refer to a product line and its associated production process collectively and argued this was the appropriate unit of analysis from which to study patterns of innovation. In “Patterns of Industrial Innovation” Abernathy and Utterback link the evolution of a productive unit to the kinds of innovations it is most likely to produce, and in “A Dynamic Model of Process and Product innovation,” they describe a corresponding industry life cycle pattern. Generally, they argued that early in an industry’s development, the product space is somewhat ambiguous, and functional improvement is the overriding focus of productive units’ innovative efforts. Small, flexible productive units tend to focus on radical innovations, and are internally fluid organizations, capable of responding quickly to shifts in the demand for their products. Later, larger, mature productive units focus on operating tight and highly structured organizations and develop incremental innovations. Demand for their product has stabilized, enabling these productive units to focus on creating the most efficient and effective modes of delivering products with specific properties.

The Dynamic Model of Product and Process Innovation

In their 1975 publication, Utterback and Abernathy hypothesized a systematic relationship between the stage of development of a firm’s productive processes and the character of its innovations, strategy and competitive focus. They proposed a coherent pattern, linking market and technology triggers for innovation to innovation types (product and process) and to barriers to innovation. As industries mature, the competitive space becomes standardized, rigid, and stable, and flexible processes are exchanged for low cost and consistency.

The process stages.

In the uncoordinated stage, Utterback and Abernathy argue that market expansion and redefinition result in high rates of product and process change and in competitive diversity. The greatest variety of processes exists in the uncoordinated stage because everyone is using manual operations and/or general-purpose equipment, and all producers use processes that have “unsettled” relationship between process elements. High-process slack is adaptive and organic but inefficient. In the segmental stage, they argue, price competition intensifies, tasks become more specialized, and the production system becomes integrated through automation and process control of subprocesses. They stress the segmented quality of the process since it is mainly subprocesses that are special purpose. The impetus for this development is higher sales volume and a few stable product designs. In the systemic stage, selective improvement of process elements becomes increasingly difficult. The process becomes highly integrated, making change costly. Incentive to change these processes is either a new technology or shifts in the requirements of the market. If changes are resisted by existing producers because of cost pressure, the window for revolutionary instead of evolutionary change opens.

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