Investigation of Make Or Buy As a Measure in Innovation Research a Pilot Study
Investigation of Make Or Buy As a Measure in Innovation Research a Pilot Study
Terje K Buer
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A n Economic Analysis, of an Anti-Trust Case " (Table 4, p. 80, and Table 5, p. 81) Carl ^'. Aysen, -14- In the silicon semiconductor industry, von Hippel (3) reports a user locus of innovation in 71% of 32 (na=4) sampled process machinery innovations (as shown in Table 4). Further, he found that four out of the five innovating user firms identified were ranked among the largest eight of 50 extant firms in terms of market share (4). In agreement with von Hippel's findings, our measure showed th...at only some of the large semiconductor machinery using firms make some of their process machinery. Thus, the "make side" of our measure appears to be accurately associated with where innovation takes place in the user industry. Note that, although the level of make is modest, about 25% (two large firms reported to make more than 25%), even a modest level of "user make" can be associated with a high level of user innovation, because, as von Hippel (4) found, user process machinery innovations (innovated by some large users) were often transferred to equipment manufacturers who built the user-developed equipment commercially and sold it to non-innovating firms.
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