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Informal Networking and Industrial Life Cycles

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Abstract

Modern industrial development processes of new technologies are characterized by an increasing complexity and interdependence of different actors combining different knowledge assets. Today, hardly any innovation can be assigned to a specific technological field. Also, the sciences are becoming increasingly differentiated and specialized, thus enhancing the necessity of horizontal and vertical knowledge transfer between the actors of innovation processes. In this context, where single actors and even single firms are unable to keep pace with technological progress, the access to external knowledge sources via informal know-how exchange networks increasingly gains in importance. In the paper a synergetic modelling framework of the evolution of informal networks is combined with time patterns of the industrial evolution sketched by the theory of industry life cycles. Integrating timeindependent transition rates excludes the possibility of analytical solutions, so numerical simulation experiments have to be performed. The results of these experiments show structural developments at least qualitatively according to the predictions of life cycle theory. Most unexpectedly - from a traditional point of view - large informal networks as a potential source of technological spillovers can be observed in a state of the industry life cycle where R&D endeavours of firms are assumed to be already concentrated on exploiting scale economies and process technologies and where intuitively a strategy of keeping new know-how secret would be expected.

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Bibliographic Info

Paper provided by Universitaet Augsburg, Institute for Economics in its series Discussion Paper Series with number 181.

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Length: pages
Date of creation: Nov 1999
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Handle: RePEc:aug:augsbe:0181

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  1. Granstrand, Ove & Sjolander, Soren, 1990. "Managing innovation in multi-technology corporations," Research Policy, Elsevier, vol. 19(1), pages 35-60, February.
  2. Klepper, Steven, 1997. "Industry Life Cycles," Industrial and Corporate Change, Oxford University Press, vol. 6(1), pages 145-81.
  3. Witt, Ulrich, 1998. "Imagination and leadership - The neglected dimension of an evolutionary theory of the firm," Journal of Economic Behavior & Organization, Elsevier, vol. 35(2), pages 161-177, April.
  4. Steven Klepper & Kenneth L. Simons, 2000. "The Making of an Oligopoly: Firm Survival and Technological Change in the Evolution of the U.S. Tire Industry," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 728-760, August.
  5. Mody, Ashoka, 1993. "Learning through alliances," Journal of Economic Behavior & Organization, Elsevier, vol. 20(2), pages 151-170, February.
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Cited by:
  1. Franco Malerba, 2005. "Innovation and the evolution of industries," KITeS Working Papers 172, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2005.
  2. Isabel Maria Bodas Freitas & Tommy Clausen & Roberto Fontana & Bart Verspagen, 2008. "Formal and informal external linkages and firms' innovative strategies: A cross-country comparison," Working Papers on Innovation Studies 20081113, Centre for Technology, Innovation and Culture, University of Oslo.
  3. Müge Ozman, 2006. "Networks and Innovation : A Survey of Empirical Literature," Working Papers of BETA 2006-07, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
  4. Ki H. Kang & Jina Kang, 2009. "How Do Firms Source External Knowledge for Innovation? Analyzing Effects of Different Knowledge Sourcing Methods," TEMEP Discussion Papers 200907, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Aug 2009.
  5. Gustafsson, Robin & Autio, Erkko, 2011. "A failure trichotomy in knowledge exploration and exploitation," Research Policy, Elsevier, vol. 40(6), pages 819-831, July.
  6. Ki H. Kang & Jina Kang, 2009. "Do External Knowledge Sourcing Methods Matter in Service Innovation? Analysis of South Korean Service Firms," TEMEP Discussion Papers 200908, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Aug 2009.
  7. Kurt Dopfer, 2012. "The origins of meso economics," Journal of Evolutionary Economics, Springer, vol. 22(1), pages 133-160, January.
  8. Schwartz, Michael & Hornych, Christoph, 2010. "Informal networking: An overview of the literature and an agenda for future research," Jena Contributions to Economic Research 2010,1, University of Applied Sciences Jena, Department of Business Administration.

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