1. EXPLORING “KNOWLEDGE NETWORKS” in “NETWORK” and “SYSTEM” STUDIES Umut EKMEKCI Globelics Academy – 02.06.2005

2. PERSONAL BACKGROUND Ph.D Candidate at Istanbul Technical University, Turkey / Department of Management Engineering, Ph.D started in February 2003, Ph.D Research: Comparison of the Knowledge Network structures of Finnish and Turkish National Systems of Innovation

3. Content of Presentation… Research Question Why ? Systems – Networks in – Organization Studies / Modern Organization Theories – Social Network Analysis – Social Construction of Science and Technology Studies – Evolutionary Innovation Theory Knowledge Networks – Innovation Networks

4. Research Question(s)… How to distinguish “Knowledge Networks” from “Innovation Networks”? – How to distinguish “networks” from “systems”? – Is any distinction between these concepts (systems/networks, knowledge networks/innovation networks) really necessary / Why ?

5. Why to distinguish “systems” from “networks”? Different uses in different disciplines Different taxonomies / blurred definitions - principles – Biology, – Chemistry, – Computer Sciences, – Engineering / Urban Planning, – Sociology, – Social Construction of Technology Organization studies, – Evolutionary Theory of Innovation,

6. Combination with Innovation and Knowledge concepts… Innovation Systems Knowledge Systems Technology Systems Production Systems Innovation Networks Business Networks Supplier Networks Knowledge Networks Knowledge Communities Innovation Clusters…

7. Different terminologies in different literatures… Actors Agents Nodes Institutions Values Bridges Power Social Capital…

8. Causes of inconsistency in different bodies of literature Difficulty of defining operational indicators for concepts like “knowledge” or “innovation”, Flexibility in the nature of each concept, Relatively limited number of interdisciplinary studies, Considering the variety in the taxonomy as a practical problem,

9. Problems due to lack of commitment about taxonomy… Placing any new study in relation with former researches / studies, Lack of bridge in interdisciplinary researches between different disciplines, What are the similarities / what are the differences between different terminologies / methodologies? What is shared / produced, through what type of relationships?

10. Systems – Conceptual Definitions Organized or connected groups of objects, Complex unity, Large complex whole comprising interacting parts, Political, economic or social order, Set of correlated beliefs, ideas or statements (Source: Oxford Dictionary)

11. Networks – Conceptual Definitions Chain or system of interconnected immaterial things, Any netlike or complex systems or collection of interrelated things, A groups of people having certain connections (Source: Oxford Dictionary)

12. Common principles… Complexity, Interconnectedness of components, Distinctions… Systems (Macro Level Orders) Systems (set of intangible assets; values, beliefs etc.) Networks (Certain connections between certain actors in certain boundaries)

13. Modern organization theory “Open Systems Approach” – shifting focus from internal dynamics of firm to external interactions in the external environment, Contingency Theory Resource Dependency Theory Population Ecology Theory Transaction Cost Theory

14. Contingency Theory No perfect solution or one absolute truth, Solutions should be defined according to the dynamic conditions of external environment, external environment should be the main determinant of the internal dynamics of firm Critiques: – Passive role against the external environment, – No consideration of collaborative activities – “Environmental determinism” (Astley and Van de Ven 1983, Perrow 1986)

15. Population Ecology Theory Organizational populations struggle with each other and with the conditions of external environment, Adaptation to the environment is essential to survive, Critiques: – Passive role against the external environment, – No consideration of collaborative activities – “Environmental determinism” (Astley and Van de Ven 1983, Perrow 1986)

16. Resource Dependency Theory Reaching to crucial resources is essential to survive, Organizations’ interactions and negotiations, (Pfeffer and Salanick, 1978) – Buffering strategies, – Bridging Strategies, Active role against the external environment: “enacted environments” (Karl Weick, 1969)

17. Transaction Cost Theory Uncertainty of external market conditions; – Bounded rationality – Small numbers (of suppliers) (Williamson) Increasing cost in long-term Cost of transactions or cost of hierarchical control (vertical integration)? Embedded relationships – network forms (Mark Granovetter, 1985)

18. Social Network Analysis Sociometry – sociograms: study of social networks (Jacob Morfeno 1953) Who are the nodes (actors) of specific networks? Who is connected with whom? (map of network) Through which channels / or which other nodes? Which nodes play what kind of roles within the network?

19. Social Network Analysis II Centrality, betweenness centrality (Freeman 1979, Krackhardt 1992), Structural Holes (Burt 1992), Social Capital, Location of Power (Thorellu 1990) Multidimensional Scaling (Levine 1972) Blockmodelling (White, Boorman, Breiger 1976) Smallest Space Analysis (Laumann and Pappi 1976) Small World Networks

20. Evolutionary Theory of Innovation “An Evolutionary Theory of Economic Change”, Richard Nelson & Sidney Winter, 1982 “Chain-linked Model”, Kline & Rosenberg, 1986 Feedback loops between; – Research, – Existing body of scientific and technological knowledge, – Potential market, – Invention, – Various steps in the production stepses

21. Evolutionary Theory of Innovation “Innovation System” (Lundvall 1985) “National Systems of Innovation” (Freeman 1987, Freeman & Perez 1988, Dosi et al., 1988)) Oslo Manual (OECD, 1992) Technological systems (Carlsson & Jacobsson 1997) Sectoral Innovation Systems (Malerba) Regional Innovation Systems (Cooke & Schienstock 1996, Cohendet & Llerena 1997)

22. National Systems of Innovation - I “… the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies” (Freeman, 1987, p: 1)

23. National Systems of Innovation - II Distinction between narrow and broad definitions of NSI (Lundvall, 1992) Components of NSI: institutions (Nelson & Rosenberg, 1993), relationships (Lundvall 2002), formal institutions and organizations (Niosi, 2002), Institutions: norms, routines, habits, rules, laws, standards etc. (Lundvall, 1992)

24. Social Construction of Science & Technology Tradition “Technology Systems”, “Large Technical Systems”, Thomas Huges (Technology historian), 1984 “Social Interest Networks”, Wiebe Bijker, 1987 “Actor-Network Theory”, Bruno Latour, Michell Callon, 1989

25. Systems or Networks? Systems: – Flexible borders / components – Macro level order – Set of common goals – coordinated activities at macro level Networks: – sharper borders / definitions are available (social network analysis) – Varying levels of analysis (ego centric networks – open networks etc.) Systems: Framework for “sub-systems” or “sub-networks ”

26. Innovation Networks or Knowledge Networks? Knowledge and Innovation: Highly related but different concepts Knowledge Creation and Innovation: Overlapping and interlinked processes Requires different indicators or methodologies to identify

27. Phases of Innovation I Innovation: commercialization of new knowledge embodied in processes or products Awareness of Problem – Idea Generation - Design – Planning – Project Management – Production - Testing – Marketing - Distribution Learning and knowledge creation in innovation process – Flow of existing knowledge – Creation of new knowledge

28. Phases of Innovation II Cyclical model Continuous interaction and linkages between different phases and actors of innovation, Each phase is knowledge-based, to a certain extent, and requires different type of knowledge, However, new knowledge creation may not occur necessarily in all phases of innovation

29. Argument I The emphasis in “Knowledge Networks” is on the collaboration in knowledge creation processes, (relatively narrower focus of KNs), The focus of innovation network is broader, including all phases of innovation process, In “Innovation networks”, collaboration may occur in any phase of innovation, However, it does not assure that any knowledge is created collectively in all phases of innovation, It is possible to identify sub-knowledge networks under the framework one innovation network,

30. Argument II Division of responsibilities and fields of expertise Innovation networks may occur as a result of complementary competencies / resources / activities, Therefore; coordination is more crucial than collaboration to innovate trough innovation networks, However, knowledge creation and knowledge flow requires collaborative actions…

31. Argument III Knowledge Networks: flexibility in knowledge creation, though embedded relationships in long-term Innovation Networks: formally established relationships, with specific responsibilities for each partner, to reach to a specific end- purpose

32. Argument IV Methodological Differences Different indicators for – Knowledge flow (knowledge accumulation / learning...) – Knowledge Creation (knowledge accumulation in particular actors of all actors of network…) – Innovation (patents, products, processes…) Knowledge flow/creation indicators are difficult to quantify, Observation of routines or individual communication channels is essential, (Qualitative research techniques; surveys, interviews, observations etc.) Long-term analysis focusing on embedded relationships

33. Knowledge NetworksInnovation Networks Main ConcernLearning / Knowledge Creation / Knowledge Flow Product / Process Innovations, Creation or integration of complementary skills for innovation Type of Relationships Embedded / Informal / Flexible / Long-term relationships Short/mid term – formally established partnerships / projects Collaborative Action Flow of existing knowledge / collaborative knowledge creations Complementary coordination or/and creation of inputs OutcomesKnowledge accumulation / improved skills - competencies New products / processes, Improved products / processes Methods of Analysis Qualitative methods focusing on routines (observations, surveys, interviews etc.) Qualitative + Quantitative Methods

34. Facts about practice… Various knowledge networks may occur within one single innovation network, in different phases, Innovation networks may be established as a result of long-term embedded knowledge network relationships, Knowledge networks and innovation networks may overlap for particular cases, It is difficult to identify in which phases what type of knowledge is produced

35. Thank You…