Innovation in Complex Products and Systems

Michael Hobday, Howard Rush, Tidd Joe

Research output: Contribution to journalArticlepeer-review


Over the past 5 to 10 years, empirical study has provided a much improved understanding of how innovation occurs in complex, high value capital goods. Research has began to illustrate the specific ways in which so-called complex products and systems (CoPS) are produced by firms, often working together in projects, and how innovation processes in CoPS differ from those commonly found in mass produced goods. This is an important research endeavour for at least three reasons. First, CoPS play a vital part in the modern economy and wider society. As the major capital goods which underpin manufacturing, services, trade and distribution, CoPS play a critical role in modern industrial and economic progress. As Rosenberg, N, 1976. Technological change in the machine tool industry, 1840–1910. In: Perspectives on Technology, Cambridge Univ. Press, Cambridge.Rosenberg (1976) has argued, capital goods are a key point of entry of new technology into the economic system. Second, because much conventional innovation wisdom is derived from research on high volume consumer products, new evidence, models and concepts are needed to properly understand innovation processes in CoPS. Third, at the practical levels of firm strategy and government policy, a robust understanding of innovation in CoPS is needed to enable firms to improve their performance and to guide the policy and regulatory agencies directly involved in decision-making in CoPS. Drawing from recent research, the purpose of this special issue is to provide substantial new insights into the innovation dynamics of CoPS, dealing with firm strategy, capability building, management practices, organisational form, product life cycles, government policy, measurements and conceptual frameworks. In this introduction, we argue not only that CoPS underpin the production of modern goods and services, but that much conventional innovation wisdom derived from studies of mass produced goods (e.g. the automobile and the semiconductor) either does not apply or applies with substantial qualification to CoPS. The aim of the Issue is to put innovation in CoPS ‘centre stage’ in the analysis of innovation. Part 1 of the introduction provides a definition of CoPS, highlighting the innovation and production contrasts with mass produced, commodity goods. Part 2 outlines key innovation issues raised by CoPS, showing the importance of systems integration, software and project management as core capabilities in the production of modern systems. Part 3 briefly summarises some of the key unanswered questions posed by CoPS, while Part 4 shows how each of the papers in this special issue attempt to answer some of these questions. Finally, Part 5 maps out future research directions, stressing the importance of building a deeper historical perspective on CoPS as a key transmission mechanism for new technology within the industrial and wider economic system.
Original languageEnglish
Pages (from-to)793-804
Number of pages12
JournalResearch Policy
Issue number7-8
Publication statusPublished - Aug 2000


  • Innovation
  • Complex Product Systems (CoPS)


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