Market fields structure & dynamics in industrial automation
AbstractThere is a research tradition in the economics of standards which addresses standards wars, antitrust concerns or positive externalities from standards. Recent research has also dealt with the process characteristics of standardisation, de facto standard-setting consortia and intellectual property concerns in the technology specification or implementation phase. Nonetheless, there are no studies which analyse capabilities, comparative industry dynamics or incentive structures sufficiently in the context of standard-setting. In my study, I address the characteristics of collaborative research and standard-setting as a new mode of deploying assets beyond motivations well-known from R&D consortia or market alliances. On the basis of a case study of a leading user organisation in the market for industrial automation technology, but also a descriptive network analysis of cross-community affiliations, I demonstrate that there must be a paradoxical relationship between cooperation and competition. More precisely, I explain how there can be a dual relationship between value creation and value capture respecting exploration and exploitation. My case study emphasises the dynamics between knowledge stocks (knowledge alignment, narrowing and deepening) produced by collaborative standard setting and innovation; it also sheds light on an evolutional relationship between the exploration of assets and use cases and each firm's exploitation activities in the market. I derive standard-setting capabilities from an empirical analysis of membership structures, policies and incumbent firm characteristics in selected, but leading, user organisations. The results are as follows: the market for industrial automation technology is characterised by collaboration on standards, high technology influences of other industries and network effects on standards. Further, system integrators play a decisive role in value creation in the customer-specific business case. Standard-setting activities appear to be loosely coupled to the products offered on the market. Core leaders in world standards in industrial automation own a variety of assets and they are affiliated to many standard-setting communities rather than exclusively committed to a few standards. Furthermore, their R&D ratios outperform those of peripheral members and experience in standard-setting processes can be assumed. Standard-setting communities specify common core concepts as the basis for the development of each member's proprietary products, complementary technologies and industrial services. From a knowledge-based perspective, the targeted disclosure of certain knowledge can be used to achieve high innovation returns through systemic products which add proprietary features to open standards. Finally, the interplay between exploitation and exploration respecting the deployment of standard-setting capabilities linked to cooperative, pre-competitive processes leads to an evolution in common technology owned and exploited by the standard-setting community as a particular kind of innovation ecosystem. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Hohenheim, Center for Research on Innovation and Services (FZID) in its series FZID Discussion Papers with number 02-2009.
Date of creation: 2009
Date of revision:
standard-setting; innovation; industry dynamics and context; industrial automation;
Find related papers by JEL classification:
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
- L69 - Industrial Organization - - Industry Studies: Manufacturing - - - Other
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-19 (All new papers)
- NEP-COM-2009-09-19 (Industrial Competition)
- NEP-CSE-2009-09-19 (Economics of Strategic Management)
- NEP-INO-2009-09-19 (Innovation)
- NEP-NET-2009-09-19 (Network Economics)
- NEP-TID-2009-09-19 (Technology & Industrial Dynamics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Geroski, Paul A, 1999.
"Models of Technology Diffusion,"
CEPR Discussion Papers
2146, C.E.P.R. Discussion Papers.
- Nooteboom, B., 2006.
"Organization, Evolution, Cognition and Dynamic Capabilities,"
2006-41, Tilburg University, Center for Economic Research.
- Bart Nooteboom, 2007. "Organization, Evolution, Cognition and Dynamic Capabilities," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(4), pages 31-55, November.
- Nooteboom, B., 2007. "Organization, Evolution, Cognition and Dynamic Capabilities," Discussion Paper 2007-2, Tilburg University, Center for Economic Research.
- Sanchez, Ron, 1996. "Strategic product creation: Managing new interactions of technology, markets, and organizations," European Management Journal, Elsevier, vol. 14(2), pages 121-138, April.
- Christ, Julian P. & Slowak, André P., 2009.
"Standard-setting and knowledge dynamics in innovation clusters,"
Violette Reihe Arbeitspapiere
27/2009, Promotionsschwerpunkt "Globalisierung und Beschaeftigung".
- Julian P. Christ & André P. Slowak, 2008. "Standard-Setting and Knowledge Dynamics in Innovation Clusters," Diskussionspapiere aus dem Institut fÃ¼r Volkswirtschaftslehre der UniversitÃ¤t Hohenheim 303, Department of Economics, University of Hohenheim, Germany.
- Grid Thoma, 2006.
"Striving for a Large Market: Evidence from a General Purpose Technology in Action,"
KITeS Working Papers
195, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Dec 2006.
- Grid Thoma, 2009. "Striving for a large market: evidence from a general purpose technology in action," Industrial and Corporate Change, Oxford University Press, vol. 18(1), pages 107-138, February.
- Knut Blind, 2006. "Explanatory factors for participation in formal standardisation processes: Empirical evidence at firm level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(2), pages 157-170.
- S. J. Liebowitz & Stephen E. Margolis, 1994. "Network Externality: An Uncommon Tragedy," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 133-150, Spring.
- Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-41, August.
- Bekkers, Rudi & Duysters, Geert & Verspagen, Bart, 2002.
"Intellectual property rights, strategic technology agreements and market structure: The case of GSM,"
Elsevier, vol. 31(7), pages 1141-1161, September.
- Bekkers,Rudi & Duysters,Geert & Verspagen,Bart, 2000. "Intellectual Property Rights, Strategic Technology Agreements and Market Structure, The Case of GSM," Research Memorandum 029, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
- David Dranove & Neil Gandal, 2003. "The Dvd-vs.-Divx Standard War: Empirical Evidence of Network Effects and Preannouncement Effects," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(3), pages 363-386, 09.
- Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
- Thomas Hatzichronoglou, 1997. "Revision of the High-Technology Sector and Product Classification," OECD Science, Technology and Industry Working Papers 1997/2, OECD Publishing.
- S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
- Sanchez, Ron, 2004. "Understanding competence-based management: Identifying and managing five modes of competence," Journal of Business Research, Elsevier, vol. 57(5), pages 518-532, May.
- Teece, David J., 1986.
"Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy,"
Elsevier, vol. 15(6), pages 285-305, December.
- Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
- Iordanis Petsas, 2003. "The dynamic effects of general purpose technologies on Schumpeterian growth," Journal of Evolutionary Economics, Springer, vol. 13(5), pages 577-605, December.
- Michael L. Katz & Carl Shapiro, 1994. "Systems Competition and Network Effects," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 93-115, Spring.
- Hodgson, Geoffrey M. & Knudsen, Thorbjorn, 2006. "Why we need a generalized Darwinism, and why generalized Darwinism is not enough," Journal of Economic Behavior & Organization, Elsevier, vol. 61(1), pages 1-19, September.
- Mario Calderini & Andrea Giannaccari, 2006. "Standardisation in the ICT sector: The (complex) interface between antitrust and intellectual property," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(6), pages 543-567.
- Bronwyn H. Hall, 2004. "Innovation and Diffusion," NBER Working Papers 10212, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If references are entirely missing, you can add them using this form.