Modular Simulation of Knowledge Development in Industry: A Multi-Level Framework

Abstract. Innovation is a central element of economic development. Understanding knowledge – its organization and especially its dynamics in a market – becomes therefore the main challenge when explaining economic development in general, and the competitiveness and growth of firms and industries in particular. Past research has generally treated knowledge as a monolithic object rather than a composite dynamic phenomenon. In this paper we present work on a new fine-grain, dynamic, morphogenic model of knowledge that is easy to manage, interpret and extend. This knowledge model is embedded a larger market simulation where selected elements of an economy, including employees, companies, banks and consumers, are modeled at multiple levels of abstraction, from agents to monolithic entities. We present data from early runs of the system, showing predictable results in baseline conditions and product innovation effects using the knowledge representation. The results show the model’s excellent potential to address questions about emergent phenomena related to knowledge evolution, knowledge transfer and knowledge use in market innovation