Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy
TL;DR: In this article, the authors explain why innovating firms often fail to obtain significant economic returns from an innovation, while customers, imitators and other industry participants be- nefit.
About: This article is published in Research Policy.The article was published on 1993-04-01. It has received 7020 citations till now. The article focuses on the topics: Complementary assets & Commercial policy.
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TL;DR: The dynamic capabilities framework as mentioned in this paper analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change, and suggests that private wealth creation in regimes of rapid technology change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm.
Abstract: The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difftcult-to- trade knowledge assets and complementary assets), and the evolution path(s) it has aflopted or inherited. The importance of path dependencies is amplified where conditions of increasing retums exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding intemally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants. © 1997 by John Wiley & Sons, Ltd.
27,902 citations
TL;DR: In this paper, the authors explore the coordination mechanisms through which firms integrate the specialist knowledge of their members, which has implications for the basis of organizational capability, the principles of organization design, and the determinants of the horizontal and vertical boundaries of the firm.
Abstract: Given assumptions about the characteristics of knowledge and the knowledge requirements of production, the firm is conceptualized as an institution for integrating knowledge. The primary contribution of the paper is in exploring the coordination mechanisms through which firms integrate the specialist knowledge of their members. In contrast to earlier literature, knowledge is viewed as residing within the individual, and the primary role of the organization is knowledge application rather than knowledge creation. The resulting theory has implications for the basis of organizational capability, the principles of organization design (in particular, the analysis of hierarchy and the distribution of decision-making authority), and the determinants of the horizontal and vertical boundaries of the firm. More generally, the knowledge-based approach sheds new light upon current organizational innovations and trends and has far-reaching implications for management practice.
11,779 citations
TL;DR: In this paper, the authors argue that an increasingly important unit of analysis for understanding competitive advantage is the relationship between firms and identify four potential sources of interorganizational competitive advantage: relation-specific assets, knowledge-sharing routines, complementary resources/capabilities, and effective governance.
Abstract: In this article we offer a view that suggests that a firm's critical resources may span firm boundaries and may be embedded in interfirm resources and routines. We argue that an increasingly important unit of analysis for understanding competitive advantage is the relationship between firms and identify four potential sources of interorganizational competitive advantage: (1) relation-specific assets, (2) knowledge-sharing routines, (3) complementary resources/capabilities, and (4) effective governance. We examine each of these potential sources of rent in detail, identifying key subprocesses, and also discuss the isolating mechanisms that serve to preserve relational rents. Finally, we discuss how the relational view may offer normative prescriptions for firm-level strategies that contradict the prescriptions offered by those with a resource-based view or industry structure view.
11,355 citations
TL;DR: In this article, the authors draw upon previous research conducted in the different social science disciplines and applied fields of business to create a conceptual framework for the field of entrepreneurship, and predict a set of outcomes not explained or predicted by conceptual frameworks already in existence in other fields.
Abstract: To date, the phenomenon of entrepreneurship has lacked a conceptual framework. In this note we draw upon previous research conducted in the different social science disciplines and applied fields of business to create a conceptual framework for the field. With this framework we explain a set of empirical phenomena and predict a set of outcomes not explained or predicted by conceptual frameworks already in existence in other fields.
11,161 citations
Additional excerpts
...not require complementary assets (Teece, 1986),...
[...]
TL;DR: In this paper, the authors draw on the social and behavioral sciences in an endeavor to specify the nature and microfoundations of the capabilities necessary to sustain superior enterprise performance in an open economy with rapid innovation and globally dispersed sources of invention, innovation, and manufacturing capability.
Abstract: This paper draws on the social and behavioral sciences in an endeavor to specify the nature and microfoundations of the capabilities necessary to sustain superior enterprise performance in an open economy with rapid innovation and globally dispersed sources of invention, innovation, and manufacturing capability. Dynamic capabilities enable business enterprises to create, deploy, and protect the intangible assets that support superior long- run business performance. The microfoundations of dynamic capabilities—the distinct skills, processes, procedures, organizational structures, decision rules, and disciplines—which undergird enterprise-level sensing, seizing, and reconfiguring capacities are difficult to develop and deploy. Enterprises with strong dynamic capabilities are intensely entrepreneurial. They not only adapt to business ecosystems, but also shape them through innovation and through collaboration with other enterprises, entities, and institutions. The framework advanced can help scholars understand the foundations of long-run enterprise success while helping managers delineate relevant strategic considerations and the priorities they must adopt to enhance enterprise performance and escape the zero profit tendency associated with operating in markets open to global competition. Copyright 2007 John Wiley & Sons, Ltd.
9,400 citations
References
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01 Jan 1962
TL;DR: The Structure of Scientific Revolutions as discussed by the authors is a seminal work in the history of science and philosophy of science, and it has been widely cited as a major source of inspiration for the present generation of scientists.
Abstract: A good book may have the power to change the way we see the world, but a great book actually becomes part of our daily consciousness, pervading our thinking to the point that we take it for granted, and we forget how provocative and challenging its ideas once were-and still are. "The Structure of Scientific Revolutions" is that kind of book. When it was first published in 1962, it was a landmark event in the history and philosophy of science. And fifty years later, it still has many lessons to teach. With "The Structure of Scientific Revolutions", Kuhn challenged long-standing linear notions of scientific progress, arguing that transformative ideas don't arise from the day-to-day, gradual process of experimentation and data accumulation, but that revolutions in science, those breakthrough moments that disrupt accepted thinking and offer unanticipated ideas, occur outside of "normal science," as he called it. Though Kuhn was writing when physics ruled the sciences, his ideas on how scientific revolutions bring order to the anomalies that amass over time in research experiments are still instructive in our biotech age. This new edition of Kuhn's essential work in the history of science includes an insightful introductory essay by Ian Hacking that clarifies terms popularized by Kuhn, including paradigm and incommensurability, and applies Kuhn's ideas to the science of today. Usefully keyed to the separate sections of the book, Hacking's essay provides important background information as well as a contemporary context. Newly designed, with an expanded index, this edition will be eagerly welcomed by the next generation of readers seeking to understand the history of our perspectives on science.
36,808 citations
34,393 citations
TL;DR: In this article, the authors propose a model to account for both continuous changes and discontinuities in technological innovation, and define the process of selection of new technological paradigms among a greater set of notionally possible ones.
5,460 citations
2,373 citations