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However, since this narrow focus on private R&D as the predominant determinant of
firm growth and innovativeness turned out to be too restrictive for understanding the
growth and employment effects of innovation, fields of non-technological innovation
began to attract more and more attention. Firstly, against the backdrop of the ongoing
structural change from the secondary (industrial) to the tertiary sector (services) in
developed economies, a mere technological perspective on innovation appeared to be
outdated, because of its bias towards innovation in manufacturing. Thereby, it is not
able to fully capture the field of non-technological innovation taking place in the service
sector (Hipp/Grupp 2005; Hipp et al. 2000).
As a result, the innovation process is today understood to be highly complex and
variable. There is no one best way to innovate. Instead, against the background of
modern, knowledge-based economies, the use of R&D as a proxy or surrogate measure
for a wider range of innovation is no longer adequate (Kline/Rosenberg 1986; Freeman
1994; Arundel et al. 2008; Raymond/St-Pierre 2010) and the theoretical focus needs to
shift “from R&D to learning processes”, as all knowledge produced within a firm cannot
be attributed to formal research activities (Foray 2006).