The Role of Coherence in the Coevolution between Institutions and Technologies Daniel Scholten 12 June 2009

The Need for Coevolution Theories on innovation: need a coevolution between institutions and technologies to ensure the performance and success of new technologies –Nelson 1994: to develop a new set of technologies, “a nation requires a set of institutions compatible with and supportive of them. The ones suitable for an earlier set of fundamental technologies may be quite inappropriate for the new” However, same theories are not able to generate how governments can achieve coevolution: what can and should governments do when and how? –No means to compare or match institutions and technologies –Not sufficiently specified how to facilitate alignment

No means…? Studies by Finger, Kunneke, Groenewegen and Menard on coherence seem to overcome the first obstacle in their studies on the effects of liberalization in networks Explore the possibilities and impediments of using ‘coherence’ to overcome the first obstacle to the operationalization of coevolution as a policy objective The role of coherence in the alignment of institutions to technologies –Coevolution is core perspective and coherence the addition –Technical change is point of departure: institutions need to align

Coevolution Elaborated Theories on coevolution: Technologies  Institutions –Technologies (ideas, artifacts) or sets of technologies (systems, networks) –Institutions as governance or more –Starting point: technical life-cycles Radical and incremental change and phases Difference between radical innovation and dominant design –Adding institutions: socio-technical change Reciprocal influences and alternating phases Some questions remain: –How should institutions and technologies be represented to study coevolution? –What is the effect of technologies on institutions (and vice versa)?

Matching Institutions to Technologies Use ‘coherence’ as design principle to define and compare –Coherence literature focuses on infrastructures, especially networks –Technologies: critical technical functions (interoperability, interconnection, capacity management and system management) –Institutions: mode of organization (of the ownership, vertical integration, regulatory framework and market structure) –Key: public/private mode of organization needs to match criticality of technical functions  notion of critical transactions allows comparison and matching –12 modes of organization discussed along 6 levels of criticality

Assessment Possibilities and impediments: –Coherence applies to networks not individual products –Coherence’s definition must be used for coevolution as well –Coherence is static comparative; no process recommendation –More operationalization required on variety and measurement –Needs to cope with network (and MoO) changes in a dynamic setting First three inherent conditions to the use of coherence for alignment

Assessment Last two obstacles need to be dealt with: –Variety: pre-selection based on national characteristics –Measurement: replace 12 MoO by 4 general paradigms based on public or private network ownership and operation (or 6?) –Dynamic setting: techno-institutional roadmap of snapshots Coherence harbors great possibilities if conditions are not an obstacle

Questions ? Thank You!