Firm R&D Behavior and Evolving Technology in Established Industries

One of the key mechanisms of firms' strategic renewal is R&D, and a key driver of the intensity of R&D is industry context. A number of theories develop propositions linking industry factors to firm R&D behavior, but these theories lack consensus. To date empirical tests have been unable to resolve the competing predictions due to lack of time-varying measures of technology. We create new measures for technology then conduct a test of the competing theories. Our results indicate that the data best match a model of innovative behavior in which firms invest in R&D principally to regain eroded advantage rather than to pursue the new frontier.http://deepblue.lib.umich.edu/bitstream/2027.42/58723/1/1109-Posen.pd

Co-evolutionary dynamics in strategic alliances : the influence of the industry lifecycle

This study examines the application of the co-evolution literature to strategic alliance formation in SME’s in the UK and Australia in two differing industries at different stages of the industry life-cycle. Extending the framework developed by Das and Teng (2002) and that of Wilson and Hynes (2009), it engages with wider industry and environmental characteristics present in these two countries, specifically examining whether different theories of alliance formation are better suited to different stages of an industry life cycle. The issues discussed above are explored and developed through the use of a qualitative case study approach. Findings indicate strong resource-based drivers for alliance formation in both industries, with firms dependent on the co-evolution of their alliances and indeed selected by the results of their alliance participation. However, differences emerged in the strategic use of alliances in these two industries. The influence of the stage of the industry life cycle on this is discussed

Evolving into a Regional Innovation System: How Governance impact on Innovation in Shenzhen and Dongguan, China?

Governance constitutes elementary supportive infrastructure for regional innovation systems. This paper extends the evolutionary lens of governance into initial industrialization phase and examines the impact of their evolution into regional innovation systems on fostering innovation activities. Drawing on the empirical substances in Shenzhen and Dongguan, China, a path-dependent nature of institutional design on supporting innovation has been discovered. The paper shows that the dirigiste globalized production system in Shenzhen in 1980s has gradually evolved to a higher level of interactive regional innovation system than the grassroots globalized production system in Dongguan, where innovation is still passively managed by global players. Finally, policy implication is discussed for the construction of regional innovation systems under different governance modalities in the initial industrialization phase.ego-networks, geographical proximity, innovation performance, knowledge networks, technological relatedness

The evolution of organizational niches : U.S. automobile manufacturers, 1885-1981.

Although the niche figures prominently in contemporary theories of organization, analysts often fail to tie micro processes within the niche to long-term changes in the broader environment. In this paper, we advance arguments about the relationship between an organization's niche and evolution in the structure of its organizational population over time. We focus on the technological niche and processes of positioning and crowding among firms in the niche space, relating them to the level of concentration among all firms in the market. Building on previous empirical studies in organizational ecology, we study the evolution of concentration in the American automobile industry from 1885 to 1981 and estimate models of the hazard of exit of individual producers from the market. The findings show that niche and concentration interact in complex ways, yielding a more unified depiction of organizational evolution than typically described or reported

Complementary Resources and the Exploitation of Technological Innovations

Technological innovation often results when the resources of a small firm are combined with those of a large one. This is because small and large firms characteristically possess complementary resources whose combination can facilitate innovation success. The possession of complementary innovation-producing resources by small and large firms helps explain patterns of interaction among firms in dynamic, technology-based industries. Propositions are developed that outline how typical resources of small and large firms can be used to explain industry-level phenomena surrounding technological change

Vertical Integration and Dis-integration of Computer Firms: A History Friendly Model of the Co-evolution of the Computer and Semiconductor Industries

In this paper we present a history-friendly model of the changing vertical scope of computer firms during the evolution of the computer and semiconductor industries. The model is "history friendly", in that it attempts at replicating some basic, stylized qualitative features of the evolution of vertical integration on the basis of the causal mechanisms and processes which we believe can explain the history. The specific question addressed in the model is set in the context of dynamic and uncertain technological and market environments, characterized by periods of technological revolutions punctuating periods of relative technological stability and smooth technical progress. The model illustrates how the patterns of vertical integration and specialization in the computer industry change as a function of the evolving levels and distribution of firms' capabilities over time and how they depend on the co-evolution of the upstream and downstream sectors. Specific conditions in each of these markets - the size of the external market, the magnitude of the technological discontinuities, the lock-in effects in demand - exert critical effects and feedbacks on market structure and on the vertical scope of firms as time goes by

Market fields structure & dynamics in industrial automation

There is a research tradition in the economics of standards which addresses standards wars, antitrust concerns or positive externalities from standards. Recent research has also dealt with the process characteristics of standardisation, de facto standard-setting consortia and intellectual property concerns in the technology specification or implementation phase. Nonetheless, there are no studies which analyse capabilities, comparative industry dynamics or incentive structures sufficiently in the context of standard-setting. In my study, I address the characteristics of collaborative research and standard-setting as a new mode of deploying assets beyond motivations well-known from R&D consortia or market alliances. On the basis of a case study of a leading user organisation in the market for industrial automation technology, but also a descriptive network analysis of cross-community affiliations, I demonstrate that there must be a paradoxical relationship between cooperation and competition. More precisely, I explain how there can be a dual relationship between value creation and value capture respecting exploration and exploitation. My case study emphasises the dynamics between knowledge stocks (knowledge alignment, narrowing and deepening) produced by collaborative standard setting and innovation; it also sheds light on an evolutional relationship between the exploration of assets and use cases and each firm's exploitation activities in the market. I derive standard-setting capabilities from an empirical analysis of membership structures, policies and incumbent firm characteristics in selected, but leading, user organisations. The results are as follows: the market for industrial automation technology is characterised by collaboration on standards, high technology influences of other industries and network effects on standards. Further, system integrators play a decisive role in value creation in the customer-specific business case. Standard-setting activities appear to be loosely coupled to the products offered on the market. Core leaders in world standards in industrial automation own a variety of assets and they are affiliated to many standard-setting communities rather than exclusively committed to a few standards. Furthermore, their R&D ratios outperform those of peripheral members and experience in standard-setting processes can be assumed. Standard-setting communities specify common core concepts as the basis for the development of each member's proprietary products, complementary technologies and industrial services. From a knowledge-based perspective, the targeted disclosure of certain knowledge can be used to achieve high innovation returns through systemic products which add proprietary features to open standards. Finally, the interplay between exploitation and exploration respecting the deployment of standard-setting capabilities linked to cooperative, pre-competitive processes leads to an evolution in common technology owned and exploited by the standard-setting community as a particular kind of innovation ecosystem. --standard-setting,innovation,industry dynamics and context,industrial automation