Growth and change and the innovative firm

Regional economic development is largely influenced by technical progress, and innovative manufacturing firms are important in this context. Large, fast growing, innovative firms contribute significantly to growth by direct and indirect employment and income-generating impacts, and these are likely to be extended through time if the firms are capable of developing new product lines and markets. Unfortunately, ‘orthodox’ theories of the firm provide a poor basis for understanding ‘how’ and ‘why’ innovative firms come into existence, grow, change, and operate over time and geographic space. Behavioral—managerial notions, on the other hand, do appear to provide a useful basis for conceptualization. This paper examines some of these concepts and goes on to provide a framework for understanding growth and change in innovative, multiproduct, multiregional firms.