PREFACEThe present text has been prepared by the members of the 'Innovation' subgroup of the EU Concerted Action 'Structural Change in the Food Industry', co-ordinated by Professor Bruce Traill, University of Reading.The text serves a dual purpose. It is intended as a review of the literature on the determinants of innovation and innovativeness and their impact on business performance, with a special view to the food industry. As such, it stands alone and can be read by itself. But it also serves as the theoretical framework for a series of case studies conducted by the members of the subgroup, which are currently underway. These case studies, interpreted on the background of the concepts detailed in this paper, will allow the derivation of a more detailed framework for the analysis of innovation in the food industry, which will then be amenable to quantitative analysis.

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In the more recent product development literature the interplay between R&D skills and competencies and market skills and competencies is seen as a major determinant of successful innovation. The study reported in this article was done in order to cast more light on these two constructs in an industry with low R&D expenditures, but where product development is nevertheless considered to be strategically important. That industry is the food processing industry. The results of a series of case studies indicate that constructs other than R&D and market orientation may be more appropriate for understanding innovation and explaining innovation success in the case material. A new set of constructs focusing on what causes specific innovation activities to occur is proposed and a revised framework is developed.Received views on innovation and success I nnovation is regarded as a major source of companies' competitive advantage. The literature on innovation and innovation success is vast and covers numerous perspectives, levels of analysis, and objectives (e.g.

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