Emerging patterns of complex technological innovation

Technological innovation is increasingly concerned with complex products and processes. The trend toward greater complexity is suggested by the fact that in 1970 complex technologies comprised 43% of the 30 most valuable world goods exports, but by 1996 complex technologies represented 84% of those goods. These technologies are innovated by self-organizing networks. Networks are those linked organizations that create, acquire, and integrate the diverse knowledge and skills required to innovate complex technologies. Accessing tacit knowledge (i.e., experienced-based, unwritten know-how) and integrating it with codified knowledge is a particular strength of many networks. Self-organization refers to the capacity networks have for reordering themselves into more complex structures (e.g., replacing individual managers with management teams), and for using more complex processes (e.g., evolving strategies) without centralized, detailed managerial guidance. Case studies of the innovation pathways traced by six complex technologies indicate that innovations can be grouped into three quite distinct patterns. Transformation: the launching of a new trajectory by a new coevolving network and technology. Normal: the coevolution of an established network and technology along an established trajectory. Transition: the coevolutionary movement to a new trajectory by an established network and technology. Policy makers and managers face the greatest challenge during those periods of movement from one innovation trajectory to another. These are periods of turbulence; they are the embodiment of Schumpeter's “gales of creative destruction.” This paper investigates how, in six case studies, core capabilities, complementary assets, organizational learning, path dependencies, and the selection environment varied among the innovation patterns. The paper builds on work reported in a recent book by the authors entitled: The Complexity Challenge: Technological Innovation for the 21st Century, Pinter, London, 1999.

[1]  Ellinor Ehrnberg,et al.  On the definition and measurement of technological discontinuities , 1995 .

[2]  Thomas Durand,et al.  Dual technological trees: Assessing the intensity and strategic significance of technological change , 1992 .

[3]  Joseph C. Montgomery,et al.  The transition to agile manufacturing : staying flexible for competitive advantage , 1996 .

[4]  Rajan R. Kamath,et al.  A Second Look at Japanese Product Development , 1995 .

[5]  D. Teece.  Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy , 1993 .

[6]  R. Narula,et al.  Innovating through strategic alliances: moving towards international partnerships and contractual agreements , 1999 .

[7]  James M. Utterback,et al.  Mastering the Dynamics of Innovation , 1996 .

[8]  Christopher Freeman,et al.  The economics of technical change , 1994 .

[9]  Joseph P. Quinlan,et al.  The U.S. Trade Deficit: A Dangerous Obsession , 2001 .

[10]  D. Leonard-Barton,et al.  Wellsprings of Knowledge: Building and Sustaining the Sources of Innovation , 1995 .

[11]  Kun H. John,et al.  The Korean DMZ: A Fragile Ecosystem , 1998, Science.

[12]  K. Pavitt,et al.  The technological competencies of the world''s largest firms , 1997 .

[13]  Jan Fagerberg,et al.  User-Producer Interaction, Learning and Comparative Advantage , 1993 .

[14]  W. Arthur,et al.  Increasing Returns and Path Dependence in the Economy , 1996 .

[15]  L. Ken Keys,et al.  Management and organisational challenges to technology (paradigm) S-curve change management , 1997 .

[16]  Eric von Hippel,et al.  How learning by doing is done: problem identification in novel process equipment☆ , 1995 .

[17]  Kulwant Singh,et al.  The Impact of Technological Complexity and Interfirm Cooperation on Business Survival , 1997 .

[18]  S. Winter,et al.  An evolutionary theory of economic change , 1983 .

[19]  J. Schumpeter.  Capitalism, Socialism and Democracy , 1943 .

[20]  Daniel Levinthal.  Technological innovation: Three faces of organizational learning: Wisdom, inertia, and discovery , 1997 .

[21]  Anders Lundgren,et al.  Technological Innovation and Network Evolution , 1995 .

[22]  O. Granstrand,et al.  Multi-Technology Corporations: Why They Have “Distributed” Rather Than “Distinctive Core” Competencies , 1997 .

[23]  Edward W. Constant,et al.  The Origins of the Turbojet Revolution , 1982 .

[24]  G. Hutcheson,et al.  Technology and Economics in the Semiconductor Industry , 1996 .

[25]  Mike Gregory,et al.  Tacit knowledge, the life cycle and international manufacturing transfer , 1997 .

[26]  G. Dosi.  Sources, Procedures, and Microeconomic Effects of Innovation , 1988 .

[27]  Jacqueline Senker,et al.  National systems of innovation, organizational learning and industrial biotechnology , 1996 .

[28]  David Lei,et al.  Dynamic Core Competences through Meta-Learning and Strategic Context , 1996 .

[29]  Richard R. Nelson,et al.  On the Sources and Significance of Interindustry Differences in Technological Opportunities , 1995 .

[30]  D. Archibugi,et al.  Technological globalisation or national systems of innovation , 1997 .

[31]  David Lei,et al.  Competence-building, technology fusion and competitive advantage : the key roles of organisational learning and strategic alliances , 1997 .

[32]  Richard W. England,et al.  Evolutionary Concepts in Contemporary Economics , 1994 .

[33]  Giovanni Dosi,et al.  Institutions and Markets in a Dynamic World , 1988 .

[34]  Léa Velho,et al.  Knowledge Frontiers: Public Sector Research and Industrial Innovation in Biotechnology, Engineering Ceramics, and Parallel Computing , 1995 .

[35]  Riitta Smeds,et al.  Radical change through incremental innovations: generic principles and cultural differences in evolution management , 1997 .

[36]  Donald N. Frey.  The New Dynamism: Part 1 , 1994 .

[37]  Michael D. McMaster.  The Intelligence Advantage: Organizing for Complexity , 1995 .

[38]  Mariano Corso,et al.  Continuous improvement and inter-project learning in new product development , 1997 .

[39]  Christopher Freeman,et al.  Building Competences in the Firm: Lessons from Japanese and European Optoelectronics , 1995 .

[40]  Alok Baveja,et al.  Dynamics of Core Competencies in Leading Multinational Companies , 1998 .

[41]  Margaret J. Wheatley,et al.  Self‐organization: The irresistible future of organizing , 1996 .

[42]  Nathan Rosenberg,et al.  Exploring the Black Box: Technology, Economics, and History , 1994 .

[43]  S. Brusoni,et al.  Unpacking the Black Box of Modularity: Technologies, Products and Organizations , 2001 .

[44]  Gordon R. Foxall,et al.  An evolutionary model of technological innovation as a strategic management process , 1992 .

[45]  Andrea Prencipe,et al.  Technological competencies and product's evolutionary dynamics a case study from the aero-engine industry , 1997 .

[46]  R. Rosenbloom,et al.  Engines of innovation : U.S. industrial research at the end of an era , 1996 .

[47]  Fumio Kodama.  Changing global perspective: Japan, the USA and the new industrial order , 1991 .

[48]  Clayton M. Christensen,et al.  The Great Disruption , 2001 .

[49]  Andrew S. Grove,et al.  Only the Paranoid Survive: How to Exploit the Crisis Points that Challenge Every Company and Career , 1996 .

[50]  David J. Teece,et al.  Technological innovation: Firm capabilities and managerial decision making: A theory of innovation biases , 1997 .

[51]  Roberto Mazzoleni,et al.  Learning and path-dependence in the diffusion of innovations: comparative evidence on numerically controlled machine tools , 1997 .

[52]  David Lei,et al.  The new learning strategy: Anytime, anything, anywhere , 1994 .

[53]  C. Lane,et al.  The Social Constitution of Trust: Supplier Relations in Britain and Germany , 1996 .

[54]  Daryl McKee,et al.  An organizational learning approach to product innovation , 1992 .

[55]  L. Lynn,et al.  Linking technology and institutions: the innovation community framework , 1996 .

[56]  C. Debresson,et al.  Networks of innovators:A review and introduction to the issue , 1991 .

[57]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[58]  Andrew C. Inkpen.  Creating Knowledge through Collaboration , 1996 .

[59]  David Coates,et al.  Putting Core Competency Thinking into Practice , 1995 .

[60]  David Probert,et al.  Technology road mapping: the issues of managing technology change , 1999 .

[61]  D. Frey.  The New Dynamism: Part 2 , 1994 .

[62]  D. Leonard,et al.  The Role of Tacit Knowledge in Group Innovation , 1998 .

[63]  S. Winter,et al.  Understanding corporate coherence: Theory and evidence , 1994 .

[64]  Pieter Groenveld.  Roadmapping Integrates Business and Technology , 1997 .

[65]  Robert E. Spekman,et al.  Alliances, External Technology Acquisition, and Discontinuous Technological Change , 1997 .

[66]  Giovanni Dosi,et al.  Technological paradigms, patterns of learning and development: An introductory roadmap , 1995 .

[67]  Robert U. Ayres,et al.  Toward a non-linear dynamics of technological progress , 1994 .

[68]  G. Lynn,et al.  Marketing and Discontinuous Innovation: The Probe and Learn Process , 1996 .

[69]  Patricia W. Meyers.  Non-linear learning in large technological firms: Period four implies chaos , 1990 .

[70]  Dan Lovallo,et al.  Rational Entrepreneurs or Optimistic Martyrs? Some Considerations on Technological Regimes, Corporate Entries, and the Evolutionary Role of Decision Biases , 1997 .

[71]  W. Arthur.  Positive feedbacks in the economy , 1990 .

[72]  Peter A. Koen.  Technology Maps: Choosing the Right Path , 1997 .