Schon (1971) created the notion of business firms as learning systems evolving in relation to their changing environment. Rapid inventive transformations of the firm happened as innovation occurred. Classical firms were built around products. Clothing is an example. Clothing manufacturers required people who understood design, fabric properties, dye processes, cutting and sewing operations. Professional managers competent in sourcing, purchasing, production, logistics, marketing and finance complete the firm. The firm is an intermediate link that interacts with its suppliers and the ultimate consumer. Since the 1940s there have been many turning points with transitional themes as summarized in Table 2.1.

In the 1950s firms began to think of innovation as commonplace and an integral part of the firm, whereas previously entrepreneurs established firms around their inventions. Research and growth were seen as important elements of the firm's system. Consumers used technologies developed in the Second World War in peacetime to deliver new products in demand. Simultaneously firms developed improvements to technological and marketing systems to deliver their new products to customers. There was a general broadening of the industrial base and by the 1960s clothing became fashion, shoes became footwear. Different technologies were employed to develop new products from new materials. Traditional industries were invaded by science-based industries throughout the...