Organize to generate innovation

Why is it that firms that compete within the same industrial sector have di vergent productivity growth over time? Is this phenomenon related to specif ic characteristics of their organizations, their human capital, their capit al investments or a combination of all of these parameters? This paper prov ides tools and methods to measure technological capability (human capital a nd change-generating efforts), technical changes processes and productivity growth. It examines the relationship between these various measures. The c ase material is based on first-hand empirical data gathered at the mill lev el in two countries (India and Canada) over a period of five to seven years in the pulp and paper sector. The empirical evidence demonstrates that cha nge-generating efforts leading to productivity growth are not only a result of formally qualified individuals (human capital). Change-generating activ ities were not performed only by 'specialists' but by a larger population o f workers in the most productive mills.