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The management of innovation and patterns in technological development


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  • Howells, John

    (Department of Organisation and Management, Aarhus School of Business)

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    This paper is a review of efforts to summarise long-term technological development in the management literature in terms of ‘paths’ or trajectories. They are most useful as a way of understanding the general search for economies of scale, but the management value of such ideas is compromised because it is difficult to judge the beginning and end of such patterns of change. The establishment of technological standards is seen as a special case of such patterns in development. The classic cases of the QWERTY keyboard, the VHS versus Betamax videocassette recorder standard and the international choice of colour TV broadcasting standard show that the most difficult management problems occur when there is no clear economic or use-value attached to one standard amongst many (this follows if Liebowitz and Margolis’ revision of the first two cases is accepted): when there is a choice between various ‘neutral’ standards. In such circumstances a blatant attempt to use a particular standard to benefit one technological player against others, when the others have equivalent technological ability, is likely to trigger mutually destructive game-playing, as occurred in the colour TV standards case.

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    Bibliographic Info

    Paper provided by University of Aarhus, Aarhus School of Business, Department of Management in its series Working Papers with number 2003-5.

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    Length: 35 pages
    Date of creation: 01 Nov 2003
    Date of revision:
    Handle: RePEc:hhb:aardom:2003_005

    Contact details of provider:
    Postal: The Aarhus School of Business, Fuglesangs Allé 4, DK-8210 Aarhus V, Denmark
    Phone: +45 89 48 66 88
    Fax: + 45 86 15 01 88
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    Keywords: Innovation; Technological development; Technological standards;

    This paper has been announced in the following NEP Reports:


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    1. Stephen E. Margolis & S.J. Liebowitz, . "Path Dependence, Lock-in and History," Working Paper Series, North Carolina State University, Department of Economics 10, North Carolina State University, Department of Economics.
    2. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, American Economic Association, vol. 75(2), pages 332-37, May.
    3. Nelson, Richard R. & Winter, Sidney G., 1977. "In search of useful theory of innovation," Research Policy, Elsevier, Elsevier, vol. 6(1), pages 36-76, January.
    4. Liebowitz, S J & Margolis, Stephen E, 1990. "The Fable of the Keys," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 33(1), pages 1-25, April.
    5. S. J. Liebowitz & Stephen E. Margolis, 1994. "Network Externality: An Uncommon Tragedy," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 8(2), pages 133-150, Spring.
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