Knowledge about knowledge since Nelson & Winter: a mixed record

Progress in our understanding of the role of knowledge in the economy, based on Nelson and Winter's book published in 1982, has been mixed. It has been greatest when their concepts have been enriched by empirical evidence, often coming from outside evolutionary economics. It has been least when discussions have been mainly theoretical, and constrained within evolutionary economics.knowledge, innovation, technical change

The Process of Innovation

The paper argues that innovation processes can be cognitive, organisational and/or economic. They happen in conditions of uncertainty and (in the capitalist system) of competition. Three broad, overlapping sub-processes of innovation are identified: the production of knowledge; the transformation of knowledge into products, systems, processes and services; and the continuous matching of the latter to market needs and demands. The paper identifies key trends in each of these areas: (1) increasing specialisation in knowledge production; (2) increasing complexity in physical artefacts, and in the knowledge bases underpinning them; and (3) the difficulties of matching technological opportunities with market needs and organisational practices. Despite advances in scientific theory and information and communication technologies (ICTs), innovation processes remain unpredictable and difficult to manage. They also vary widely according to the firm's sector and size. Only two innovation processes remain generic: co-ordinating and integrating specialised knowledge, and learning in conditions of uncertainty. The paper also touches on the key challenges now facing 'innovation managers' within modern industrial corporations, bearing in mind the highly contingent nature of innovation.innovation processes, specialised knowledge production, knowledge transformation, modern industrial corporations

Problem solving and the co-ordination of innovative activities

In the context of increasingly globalized markets, ever more complex supply chains and international manufacturing networks, corporate decision-making processes involve more and more actors, variables and criteria. This is a challenge for corporate head quarters. Many have argued that the role once attributed to the integrated innovative organisation and its R&D laboratories is increasingly associated with the functioning of networks of specialised innovators. The aim of this paper is to argue that the role of large firms may have changed, but it is far from disappeared. It looks at the interplay of increasing knowledge specialisation, the development of products of increasing complexity that perform a widening range of functionalities, and the emergence and diffusion of new design strategies for both products and organisations, namely modularity. The emergence of modularity as a product and organisational design strategy is clearly connected to recent trends in organisational design. Modularity would allow the decoupling of complex artifacts into simpler, self-contained modules. Each module would, at the extreme, become the sole business of a specialised trade. This paper builds upon the idea that there are cognitive limits to this process of modularisation: what kinds of problems firms solve, and how they solve them, set limits to the extent of division of labour among firms. We draw implications of such limits for both management and economic theory.large firms, knowledge specialisation, complex products, modularity,

International Encyclopedia of the Social and Behavioural Sciences: 3 Papers

R&D, economics of science, science funding, EU