1. The network society Networks & circulation of knowledge 06-10-2009 Mila Davids

2. Networks & circulation of knowledge Arjan van Rooij Rudi Bekkers

3. Why networks & circulation of knowledge? Relationships with other ‘The network society’ lectures? Contribution to understanding of technological change Overview lectures focusing ‘circulation of knowledge’ Case study

4. Earlier lectures: Why networks & innovation? Classic innovation studies focus mainly on characteristics of individuals or firms to explain innovation –e.g. firm size and innovativeness However, innovation, is inherently social in nature –e.g. firms have relations with other firms and consequently access to additional external resources Hence, networks of social relations between actors –(individuals and organizations) may be important factors in explaining innovation –and innovation may change networks of social relations as well

5. Innovativeness & learning Resource based view of the firm –Edith Penrose (1959) –1980s capabilities: historically determined; firm specific; difficult to imitate

6. Inovativeness & learning The knowledge base view of the firm –Conner & Prahalad, Grant, Kogut & Zander Dynamic capability perspective –Teece, Pisano, Shuen Organizational learning & routines –Nelson & Winter –Nonaka

7. Networks & circulation of knowledge Knowledge (& transfer) –Explicit knowledge / information Tacit knowledge / know-how –General knowledge specific knowledge –Innovation & capability development: Various kind of knowledge Knowledge transfer –Documents, publications, patents, licences –Personal contacts.. Knowledge sources –Universities-> lecture 13/10 & 17/11 –Consumers –Suppliers –competitors..

8. Networks & circulation of knowledge Knowledge flows via -informal / personal relations -education-licensing-alliances -co-operation / co-design..Networks –Specific relations: alliance networks –Sources: consumer network; supplier network-> lecture 1/12.. Focus on specific innovation - firm: Various knowledge sharing networks; knowledge; knowledge flows, sources, carriers -> lecture 6/10, 1/12 & 8/12

9. University – industry relations International knowledge flows Knowledge networks and societal transition Universities Arjan van Rooij (13-10) Ac Ind researchers Rudi Bekkers (17-11) Globalisation & Learning in networks Contribution to societal change

10. CEO Staff Divisions Master Pupil Guild Second Industrial Revolution Third Industrial Revolution Master Pupil Master Pupil ‘Stand alone’ model: - Economies of scale - Optimize assets Networked model: Economies of skill: -access to knowledge -co-development -leverage knowledge -focus on core competences -learn and innovate Why networks and alliance management? The knowledge economy is a network economy Organizational models are transforming from “stand alone” to “networked”

11. Case study: Philips & solid-state technology 1. constraints for networking 2. actual networkbuilding internal knowledge building expectationspath-dependency

13. Patrick Dixon: future trends … http://www.youtube.com/watch?v=99p- pWW7ljI http://www.youtube.com/watch?v=99p- pWW7ljI

14. Case study: Philips & solid-state technology 1. constraints for networking 2. actual networkbuilding internal knowledge building expectationspath-dependency

15. low high External knowledge lowhigh Internal knowledge Importance in innovation process 1940s/1950s Germanium/transistor mid 1950s- High frequency transistor 1950s/1960s Silicon/IC

16. …????… Why did Philips’ attitude towards external knowledge change?

17. Argument: Expectations largely influenced the searching for and acquiring of knowledge They influenced Philips’ attitude & company approached

18. Necessary …. Knowledge base Receptivity External knowledge acquisition Expectations

19. Expectations 1. future technological possibilities, with regard to the artefact, material or process 2. market expectations and 3. ideas about broad technological trends. 4. character of the licence agreement (Van Lente) (Van Lente) related to:

20. External knowledge acquisition Knowledge base Receptivity External knowledge acquisition Expectations Coherence Self-confidence

21. Overview three periods: three periods: 1. End 1940s – begin 1950s Germanium transistor 2. Mid 1950s High frequency transistor 3. End 1950s – begin 1960s Silicon / IC aspects: aspects: -external knowledge and internal knowledge -expectations * receptivity & knowledge base * self-confidence & coherence

23. End 1940s – begin 1950s Germanium transistor 1930s semiconductors 1930s semiconductors Selenium & copper oxide (selenium rectifiers) Selenium & copper oxide (selenium rectifiers) Natlab research after WOII: American companies after WOII: American companies Selenium, germanium & silicon Philis -> germanium (germanium rectifiers) Philis -> germanium (germanium rectifiers)experience 1948: Bell 1948: Bell Transistor effect (point contact transistor) Transistor effect (point contact transistor)publications 1952: Bell 1952: Bell layer transistor: double doping technique layer transistor: double doping technique Bell symposium & licence agreement Natlab versus production department: RCA (alloy junction) Natlab versus production department: RCA (alloy junction)publications

24. External knowledge low high lowhigh Internal knowledge Importance in innovation process 1940s/1950s Germanium/transistor weak strong Receptivity weakstrong Knowledge base Importance in ‘knowledge acquisition’ 1940s/1950s Germanium/transistor low high Self-confidence lowhigh coherence Importance of expectations determined by: 1940s/1950s Germanium/transistor

25. Mid 1950s High frequency transistor Mid 1950s: high frequency transistors Mid 1950s: high frequency transistors Philips: in-house development (POB transistors) Philips: in-house development (POB transistors) own development Instead of Philco’s knowledge (surface base transistor / jet etching process) Instead of Philco’s knowledge (surface base transistor / jet etching process)Reasons: -Technical -Expected profitability -Future semiconductor companies : tube manufacturing capabilities

26. External knowledge low high lowhigh Internal knowledge Importance in innovation process 1940s/1950s Germanium/transistor weak strong Receptivity weakstrong Knowledge base Importance in knowlege acquisition 1940s/1950s Germanium/transistor low high Self-confidence lowhigh coherence Importance of expectations determined by: mid 1950s- High frequency transistor mid 1950s- High frequency transistor mid 1950s- High frequency transistor 1940s/1950s Germanium/transistor

27. End 1950s – begin 1960s Silicon / IC  Philips: own capabilities  End 1950s: Am. companies: silicon  Philips: germanium (silicon diodes)  Passive attitude towards silicon transistors  POB transistor / market expectations  Agreement with Texas Instruments  End 1950s: Am. Companies: ICs  Focus on germanium / poor market prospects  IBM preference (thin film versus planar process)  Underestimation of TI  Acquisition of Wembly lab (General Electric Company): not sufficient  Westinghouse

28. External knowledge low high lowhigh Internal knowledge Importance in innovation process 1940s/1950s Germanium/transistor weak strong Receptivity weakstrong Knowledge base Importance in knowledge acquisition 1940s/1950s Germanium/transistor low high Self-confidence lowhigh coherence Importance of expectations determined by: 1950s/1960s Silicon/IC 1950s/1960s Silicon/IC 1950s/1960s Silicon/IC mid 1950s- High frequency transistor mid 1950s- High frequency transistor mid 1950s- High frequency transistor 1940s/1950s Germanium/transistor

29. Concluding remarks Interaction internal knowledge building and external knowledge acquisition In-house knowledge building important Success -> self-confidence + coherence => external orientation Importance market expectations (IBM) => germanium Expected market dominance former tube companies => TI Expectations TI licence agreement => alertness & active search Path dependence : techniques & networking Institutional context

30. Thank you for your attention