IDEAS home Printed from https://ideas.repec.org/a/eee/respol/v40y2011i6p819-831.html
   My bibliography  Save this article

A failure trichotomy in knowledge exploration and exploitation

Author

Listed:
  • Gustafsson, Robin
  • Autio, Erkko

Abstract

In this article, we review current rationales for policy intervention in innovative activities. Focusing particularly on market and system failure rationales, we disentangle related underlying mechanisms for knowledge exploration and exploitation. We provide a novel contribution to the system failure literature by distinguishing between system-level inertia and inhibited emergence. Our conceptualization of inhibited emergence draws on literatures related to neo-institutional sociology, the social construction of technology, and on organizational cognition and learning literatures, and it presents elemental socio-cognitive mechanisms that influence and direct knowledge exploration and exploitation in innovation systems. We compare related, yet theoretically distinct concepts of market failure, system-level inertia, and inhibited emergence, and show how each addresses distinct coordinative mechanisms and field-level dynamics and related socio-cognitive processes.

Suggested Citation

  • Gustafsson, Robin & Autio, Erkko, 2011. "A failure trichotomy in knowledge exploration and exploitation," Research Policy, Elsevier, vol. 40(6), pages 819-831, July.
    • Handle: RePEc:eee:respol:v:40:y:2011:i:6:p:819-831
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0048733311000503
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bresnahan, Timothy F. & Trajtenberg, M., 1995. "General purpose technologies 'Engines of growth'?," Journal of Econometrics, Elsevier, vol. 65(1), pages 83-108, January.
    2. Etzkowitz, Henry & Leydesdorff, Loet, 2000. "The dynamics of innovation: from National Systems and "Mode 2" to a Triple Helix of university-industry-government relations," Research Policy, Elsevier, vol. 29(2), pages 109-123, February.
    3. Mary Tripsas & Giovanni Gavetti, 2000. "Capabilities, cognition, and inertia: evidence from digital imaging," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 1147-1161, October.
    4. Bronwyn H. Hall, 2002. "The Assessment: Technology Policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 18(1), pages 1-9, Spring.
    5. Chesbrough, Henry W, 1999. "The Organizational Impact of Technological Change: A Comparative Theory of National Institutional Factors," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 8(3), pages 447-485, September.
    6. Giovanni Dosi & Luigi Marengo & Corrado Pasquali, 2010. "How Much Should Society Fuel the Greed of Innovators? On the Relations between Appropriability, Opportunities and Rates of Innovation," Chapters, in: Riccardo Viale & Henry Etzkowitz (ed.), The Capitalization of Knowledge, chapter 4, Edward Elgar Publishing.
    7. James G. March, 1991. "Exploration and Exploitation in Organizational Learning," Organization Science, INFORMS, vol. 2(1), pages 71-87, February.
    8. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87, World Scientific Publishing Co. Pte. Ltd..
    9. Beesley, Lisa G. A., 2003. "Science policy in changing times: are governments poised to take full advantage of an institution in transition?," Research Policy, Elsevier, vol. 32(8), pages 1519-1531, September.
    10. Bengt-Åke Lundvall, 1999. "National Business Systems and National Systems of Innovation," International Studies of Management & Organization, Taylor & Francis Journals, vol. 29(2), pages 60-77, June.
    11. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    12. Mansfield, Edwin, 1995. "Academic Research Underlying Industrial Innovations:," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 55-65, February.
    13. Salter, Ammon J. & Martin, Ben R., 2001. "The economic benefits of publicly funded basic research: a critical review," Research Policy, Elsevier, vol. 30(3), pages 509-532, March.
    14. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    15. Carlsson, Bo & Jacobsson, Staffan & Holmen, Magnus & Rickne, Annika, 2002. "Innovation systems: analytical and methodological issues," Research Policy, Elsevier, vol. 31(2), pages 233-245, February.
    16. Dosi, Giovanni, 1993. "Technological paradigms and technological trajectories : A suggested interpretation of the determinants and directions of technical change," Research Policy, Elsevier, vol. 22(2), pages 102-103, April.
    17. Gilsing, Victor & Nooteboom, Bart & Vanhaverbeke, Wim & Duysters, Geert & van den Oord, Ad, 2008. "Network embeddedness and the exploration of novel technologies: Technological distance, betweenness centrality and density," Research Policy, Elsevier, vol. 37(10), pages 1717-1731, December.
    18. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, October.
    19. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    20. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    21. Andreas Pyka & Uwe Cantner, 1999. "Informal Networking and Industrial Life Cycles," Discussion Paper Series 181, Universitaet Augsburg, Institute for Economics.
    22. Cooke, Philip & Gomez Uranga, Mikel & Etxebarria, Goio, 1997. "Regional innovation systems: Institutional and organisational dimensions," Research Policy, Elsevier, vol. 26(4-5), pages 475-491, December.
    23. Partha, Dasgupta & David, Paul A., 1994. "Toward a new economics of science," Research Policy, Elsevier, vol. 23(5), pages 487-521, September.
    24. John Seely Brown & Paul Duguid, 2001. "Knowledge and Organization: A Social-Practice Perspective," Organization Science, INFORMS, vol. 12(2), pages 198-213, April.
    25. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    26. Bresnahan, Timothy F, 1986. "Measuring the Spillovers from Technical Advance: Mainframe Computers inFinancial Services," American Economic Review, American Economic Association, vol. 76(4), pages 742-755, September.
    27. Bruce Kogut, 2000. "The network as knowledge: generative rules and the emergence of structure," Strategic Management Journal, Wiley Blackwell, vol. 21(3), pages 405-425, March.
    28. Mowery,David C. & Nelson,Richard R. (ed.), 1999. "Sources of Industrial Leadership," Cambridge Books, Cambridge University Press, number 9780521645201, October.
    29. Klette, Tor Jakob & Moen, Jarle & Griliches, Zvi, 2000. "Do subsidies to commercial R&D reduce market failures? Microeconometric evaluation studies1," Research Policy, Elsevier, vol. 29(4-5), pages 471-495, April.
    30. Sobel, Russell S & Holcombe, Randall G, 2001. "The Unanimous Voting Rule Is Not the Political Equivalent to Market Exchange," Public Choice, Springer, vol. 106(3-4), pages 233-242, March.
    31. Callon, M., 1980. "The state and technical innovation: a case study of the electrical vehicle in France," Research Policy, Elsevier, vol. 9(4), pages 358-376, October.
    32. Carlsson, Bo & Jacobsson, Staffan, 1994. "Technological systems and economic policy: the diffusion of factory automation in Sweden," Research Policy, Elsevier, vol. 23(3), pages 235-248, May.
    33. Ash Amin & Patrick Cohendet, 2004. "Architectures of knowledge : Firms, capabilities, and communities," Post-Print hal-00279605, HAL.
    34. Utterback, James M & Abernathy, William J, 1975. "A dynamic model of process and product innovation," Omega, Elsevier, vol. 3(6), pages 639-656, December.
    35. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    36. Scott D. N. Cook & John Seely Brown, 1999. "Bridging Epistemologies: The Generative Dance Between Organizational Knowledge and Organizational Knowing," Organization Science, INFORMS, vol. 10(4), pages 381-400, August.
    37. Robert A. Burgelman, 1991. "Intraorganizational Ecology of Strategy Making and Organizational Adaptation: Theory and Field Research," Organization Science, INFORMS, vol. 2(3), pages 239-262, August.
    38. Malerba, Franco & Orsenigo, Luigi, 1996. "The Dynamics and Evolution of Industries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 5(1), pages 51-87.
    39. John Child & Lu Yuan, 1996. "Institutional Constraints on Economic Reform: The Case of Investment Decisions in China," Organization Science, INFORMS, vol. 7(1), pages 60-77, February.
    40. Reinganum, Jennifer F., 1989. "The timing of innovation: Research, development, and diffusion," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 14, pages 849-908, Elsevier.
    41. Levin, Richard C, 1988. "Appropriability, R&D Spending, and Technological Performance," American Economic Review, American Economic Association, vol. 78(2), pages 424-428, May.
    42. Sahal, Devendra, 1981. "Alternative conceptions of technology," Research Policy, Elsevier, vol. 10(1), pages 2-24, January.
    43. Thomas Keil & Erkko Autio & Gerard George, 2008. "Corporate Venture Capital, Disembodied Experimentation and Capability Development," Journal of Management Studies, Wiley Blackwell, vol. 45(8), pages 1475-1505, December.
    44. Carlaw, Kenneth I. & Lipsey, Richard G., 2002. "Externalities, technological complementarities and sustained economic growth," Research Policy, Elsevier, vol. 31(8-9), pages 1305-1315, December.
    45. Walker, William, 2000. "Entrapment in large technology systems: institutional commitment and power relations," Research Policy, Elsevier, vol. 29(7-8), pages 833-846, August.
    46. Geels, Frank W. & Schot, Johan, 2007. "Typology of sociotechnical transition pathways," Research Policy, Elsevier, vol. 36(3), pages 399-417, April.
    47. Lundvall, Bengt-Ake & Johnson, Bjorn & Andersen, Esben Sloth & Dalum, Bent, 2002. "National systems of production, innovation and competence building," Research Policy, Elsevier, vol. 31(2), pages 213-231, February.
    48. Wanda J. Orlikowski, 1992. "The Duality of Technology: Rethinking the Concept of Technology in Organizations," Organization Science, INFORMS, vol. 3(3), pages 398-427, August.
    49. Kevin Morgan, 1997. "The Learning Region: Institutions, Innovation and Regional Renewal," Regional Studies, Taylor & Francis Journals, vol. 31(5), pages 491-503.
    50. Klette, T.J. & Moen, J. & Griliches, Z., 1999. "Do Subsidies to Commercial R&D Reduce Market Failures? Microeconometric Evaluation Studies," Papers 16/99, Norwegian School of Economics and Business Administration-.
    51. Francis M. Bator, 1958. "The Anatomy of Market Failure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 72(3), pages 351-379.
    52. Richard R. Nelson, 1959. "The Simple Economics of Basic Scientific Research," Journal of Political Economy, University of Chicago Press, vol. 67(3), pages 297-297.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Autio, Erkko & Kenney, Martin & Mustar, Philippe & Siegel, Don & Wright, Mike, 2014. "Entrepreneurial innovation: The importance of context," Research Policy, Elsevier, vol. 43(7), pages 1097-1108.
    2. Spaniol, Matthew J. & Rowland, Nicholas J., 2022. "Business ecosystems and the view from the future: The use of corporate foresight by stakeholders of the Ro-Ro shipping ecosystem in the Baltic Sea Region," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    3. Angelo Cavallo & Antonio Ghezzi & Raffaello Balocco, 2019. "Entrepreneurial ecosystem research: present debates and future directions," International Entrepreneurship and Management Journal, Springer, vol. 15(4), pages 1291-1321, December.
    4. David C. Lane & Birgit Kopainsky & Silvia Ulli-Beer & Merla Kubli & Juliana Zapata & Michael Wurzinger & Jörg Musiolik & Bettina Furrer, 2017. "Participative Modelling of Socio-Technical Transitions: Why and How Should We Look Beyond the Case-Specific Energy Transition Challenge?," Systems Research and Behavioral Science, Wiley Blackwell, vol. 34(4), pages 469-488, July.
    5. Enrico Santarelli & Hien Tran, 2013. "The interplay of human and social capital in shaping entrepreneurial performance: the case of Vietnam," Small Business Economics, Springer, vol. 40(2), pages 435-458, February.
    6. Ben R. Martin, 2015. "R&D Policy Instruments: A Critical Review of What We Do & Don't Know," Working Papers wp476, Centre for Business Research, University of Cambridge.
    7. Lenihan, Helena & McGuirk, Helen & Murphy, Kevin R., 2019. "Driving innovation: Public policy and human capital," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    8. Janna Alvedalen & Ron Boschma, 2017. "A critical review of entrepreneurial ecosystems research: towards a future research agenda," European Planning Studies, Taylor & Francis Journals, vol. 25(6), pages 887-903, June.
    9. Natalie Holden, 2015. "An exploration of interactive contextual and dispositional factors which influence a collective process of entrepreneurial activity: a novel case at Bristol Zoo," Working Papers 27, Birkbeck Centre for Innovation Management Research, revised Nov 2015.
    10. Zoltán J. Ács & Erkko Autio & László Szerb, 2015. "National Systems of Entrepreneurship: Measurement issues and policy implications," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 28, pages 523-541, Edward Elgar Publishing.
    11. Bianca Avram Ph. D Student & Prof. Stelian Brad Ph. D, 2015. "How Does Corruption Influence The Entrepreneurial Enviroment In Romania ?," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(25), pages 29-38, NOVEMBER.
    12. Smith, Simon & Ward, Vicky, 2015. "The role of boundary maintenance and blurring in a UK collaborative research project: How researchers and health service managers made sense of new ways of working," Social Science & Medicine, Elsevier, vol. 130(C), pages 225-233.
    13. Monica Cenan (Ciucos) & Alina Badulescu, 2022. "Performance Through Internationalization As A Strategic Option For Smes," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 7(1), pages 86-97, March.
    14. Sepehr Ghazinoory & Meysam Narimani & Shiva Tatina, 2017. "Neoclassical versus evolutionary economics in developing countries: convergence of policy implications," Journal of Evolutionary Economics, Springer, vol. 27(3), pages 555-583, July.
    15. van der Have, Robert P. & Rubalcaba, Luis, 2016. "Social innovation research: An emerging area of innovation studies?," Research Policy, Elsevier, vol. 45(9), pages 1923-1935.
    16. Labarthe, Pierre & Coléno, François & Enjalbert, Jérôme & Fugeray-Scarbel, Aline & Hannachi, Mourad & Lemarié, Stéphane, 2021. "Exploration, exploitation and environmental innovation in agriculture. The case of variety mixture in France and Denmark," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    17. Yana Borissenko & Ron Boschma, 2016. "A critical review of entrepreneurial ecosystems: towards a future research agenda," Papers in Evolutionary Economic Geography (PEEG) 1630, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2016.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    2. Rakas, Marija & Hain, Daniel S., 2019. "The state of innovation system research: What happens beneath the surface?," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    3. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    4. Garud, Raghu & Gehman, Joel, 2012. "Metatheoretical perspectives on sustainability journeys: Evolutionary, relational and durational," Research Policy, Elsevier, vol. 41(6), pages 980-995.
    5. Giovanni Dosi & Richard Nelson, 2013. "The Evolution of Technologies: An Assessment of the State-of-the-Art," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 3-46, June.
    6. Joshua S. Gans & Michael Kearney & Erin L. Scott & Scott Stern, 2021. "Choosing Technology: An Entrepreneurial Strategy Approach," Strategy Science, INFORMS, vol. 6(1), pages 39-53, March.
    7. Mary Tripsas, 2008. "Customer preference discontinuities: a trigger for radical technological change," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(2-3), pages 79-97.
    8. Singh, Shiwangi & Dhir, Sanjay & Das, V. Mukunda & Sharma, Anuj, 2020. "Bibliometric overview of the Technological Forecasting and Social Change journal: Analysis from 1970 to 2018," Technological Forecasting and Social Change, Elsevier, vol. 154(C).
    9. Bleda, Mercedes & del Río, Pablo, 2013. "The market failure and the systemic failure rationales in technological innovation systems," Research Policy, Elsevier, vol. 42(5), pages 1039-1052.
    10. Robert Huggins & Piers Thompson, 2015. "Entrepreneurship, innovation and regional growth: a network theory," Small Business Economics, Springer, vol. 45(1), pages 103-128, June.
    11. Beck, Mathias & Junge, Martin & Kaiser, Ulrich, 2017. "Public Funding and Corporate Innovation," IZA Discussion Papers 11196, Institute of Labor Economics (IZA).
    12. Carayol, Nicolas & Dalle, Jean-Michel, 2007. "Sequential problem choice and the reward system in Open Science," Structural Change and Economic Dynamics, Elsevier, vol. 18(2), pages 167-191, June.
    13. Lee, Young Hoon & Kim, YoungJun, 2016. "Analyzing interaction in R&D networks using the Triple Helix method: Evidence from industrial R&D programs in Korean government," Technological Forecasting and Social Change, Elsevier, vol. 110(C), pages 93-105.
    14. Khraisha, Tamer, 2020. "Complex economic problems and fitness landscapes: Assessment and methodological perspectives," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 390-407.
    15. Martin Kalthaus, 2020. "Knowledge recombination along the technology life cycle," Journal of Evolutionary Economics, Springer, vol. 30(3), pages 643-704, July.
    16. Apa, Roberta & De Noni, Ivan & Orsi, Luigi & Sedita, Silvia Rita, 2018. "Knowledge space oddity: How to increase the intensity and relevance of the technological progress of European regions," Research Policy, Elsevier, vol. 47(9), pages 1700-1712.
    17. Harabi, Najib, 1994. "Technischer Fortschritt in der Schweiz: Empirische Ergebnisse aus industrieökonomischer Sicht [Technischer Fortschritt in der Schweiz:Empirische Ergebnisse aus industrieökonomischer Sicht]," MPRA Paper 6725, University Library of Munich, Germany.
    18. Autio, Erkko & Kanninen, Sami & Gustafsson, Robin, 2008. "First- and second-order additionality and learning outcomes in collaborative R&D programs," Research Policy, Elsevier, vol. 37(1), pages 59-76, February.
    19. Shi, Xianwei & Liang, Xingkun & Luo, Yining, 2023. "Unpacking the intellectual structure of ecosystem research in innovation studies," Research Policy, Elsevier, vol. 52(6).
    20. Lettice, Fiona & Smart, Palie & Baruch, Yehuda & Johnson, Mark, 2012. "Navigating the impact-innovation double hurdle: The case of a climate change research fund," Research Policy, Elsevier, vol. 41(6), pages 1048-1057.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:40:y:2011:i:6:p:819-831. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/respol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.