The Pavitt Taxonomy, revisited: patterns of innovation in manufacturing and services

In this article we discuss how to summarize the persistent and large heterogeneity in innovative behaviour and economic performance. A revision of the Pavitt (1984) Taxonomy—covering manufacturing and services, as well as ICT activities—is proposed as a key tool for identifying common characteristics and diversities in patterns. An extensive analysis of innovation survey data, on sources, objectives, inputs and outcomes of innovation, allows us to test alternative industry groupings, leading to an extensive assessment of a Revised Pavitt Taxonomy that is able to capture major structural differences in the relationship between innovation and performance. As industries’ classifications has changed from NACE Rev. 1 to NACE Rev. 2 in 2008, a revised Pavitt Taxonomy is also provided for the new industries.