Systems of Innovation and Industry Evolution: The Case of Retail Banking in the UK

This paper presents a longitudinal study on the evolution of the retail banking sector in the UK following the adoption of automated payments in the 1970s. The analysis is cast in the context of innovation studies and articulates how changing configurations of the knowledge base combined with the emergence and adaptation of institutional structures stirred a paradigm of service innovation in an information-intensive industry like banking. The cases of the Automated Teller Machine (ATM) and of the Electronic Fund Transfer at Point of Sale (EFTPOS) provide evidence on the subtleties of a dual evolutionary process underpinning the development of a system of innovation: the growing ecology of actors and the emergence of new forms of coordination across them.