Discussion of innovation and technological development has to a very large extent been restricted to high-technology industries. This is a serious shortcoming in the theory of innovation. In the first place, low technology plays a dominant role in the OECD economies in terms of turnover, as argued in this study. Analysis of returns on investment also suggests that this sector is more profitable than high-tech. Secondly, innovation and technological development in low-technology industries are very different from those in “high technology” and therefore cannot be analysed with the same instruments. It is characteristic of low technology that new knowledge is often transferred in embodied form. This is particularly the case with new materials, but also with other production equipment. Adapting these to the firm’s own products and production processes calls for capabilities from the firm itself in the form of learning processes. These learning processes are in turn integrated with the firm’s material base. Not high R&D expenditures, but low implementation costs, are thus a measure of success. The importance of different ways of obtaining access to new knowledge in low-technology industries, for example in the form of buy-ups and licensing, is also discussed.
