'The bearer of the mechanism of change': small-firm inventiveness and patenting in Norway

Firm-size is one of several variables within a larger system where technology, institutions, demand, strategic decisions and random processes play central roles in shaping overall economic outcomes (Sutton, 1998). This chapter starts from the premise that the participation of small and medium-sized enterprises (SMEs) - and the conditions for their participation - is especially important for small open economies like the Norwegian case where firm demographics are dominated by relatively small companies. The role these firms play in knowledge generation and the problems they meet have implications for the working of the innovation system as a whole and for policies that address these. The chapter draws on some aspects the unresolved (-able?) small versus big debate which traces back to disparate positions taken by Schumpeter. In this controversy, we are not primarily interested in the headline issue of which size-classes may or may not contribute most to technological progress. The purpose is to explore the role that different size classes play and to consider some implications to the working of the innovation system as a whole. We explore the contribution of the small firm to inventive activity in line with the Schumpeter's early conjecture (Schumpeter, 1912; 1989), and consider problems this set of firms seem to face in managing their intellectual property in the growing 'market for technology', (Arora, Fosuri, Gambardella, 2000).