A review of the history of innovative thought (see Chapter 5) shows
two clear patterns: 1) historically, a continual changeover of
technological leadership has occurred among countries, with never the
same country twice being the leading innovative power; and 2) those
same elements that propelled a country (or region) towards leadership
inevitably led to its downfall. Today's stodgy aging industry was
yesterday's innovative hotspot. Today's high technology is tomorrow's
mature industry. As industries mature, they lose that innovative spirit,
evolving from radical to process innovation. The local structure matures
with it, resulting in stagnation and inevitable decline. Economies
dominated by mature industries tend to be poor "seedbeds" for the
formation of new ventures. The new can not begin where the old is due
to the negative structural elements inherent in the old ( Oakey, 1984).
Local high technology-driven economies tend to be not only good
seedbeds for small firm formation but also fertile environments for their
subsequent rapid growth.

Several examples of shifting innovative leadership are readily
apparent in modern American history. Steel and railroads dominated
the last half of the nineteenth century, Pittsburgh was the premier
innovative hotspot for steel during the second half of the nineteenth
century. Automobiles, electricity, and telecommunications dominated
the first part of the twentieth century, and Detroit ( 1900 to 1920) was
the innovative hotspot for the then-new automotive industry. By the
1930s, both had matured. After 1950, neither industry center was
particularly innovative (nor even competitive, as later events showed).
Almost without exception, new automotive or steel innovations came
from outside, from smaller peripheral companies.

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