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The Dynamic 'Diamond': A Technological Innovation Perspective

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  • James Utterback
  • Allan Afuah

Abstract

A firm's local environment can constitute a source of national or regional cornpetitive advantage. An important question, therefore, is how these environments come about and how they can be lost. In this paper, we argue that a local environment is a function of the process of technological evolution. It is a function of how certain initial and prevailing conditions, the type of innovation, and chance events, influence the processes of uncertainty resolution, capabilities building, and survivor selection that are characteristic of technological evolution. We also argue that a region can lose its advantage when a dominant design emerges or when a technological discontinuity obsoletes the localized technological capabilities of not only manufacturers, but also of their suppliers, customers and related industries. The environment is dynamic as firms and nations, in response to their performances, also influence it by changing their strategies or policies.

Suggested Citation

  • James Utterback & Allan Afuah, 1998. "The Dynamic 'Diamond': A Technological Innovation Perspective," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 6(2-3), pages 183-200.
    • Handle: RePEc:taf:ecinnt:v:6:y:1998:i:2-3:p:183-200
    DOI: 10.1080/10438599800000019
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    References listed on IDEAS

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    1. Eric von Hippel, 1986. "Lead Users: A Source of Novel Product Concepts," Management Science, INFORMS, vol. 32(7), pages 791-805, July.
    2. Afuah, Allan N. & Bahram, Nik, 1995. "The hypercube of innovation," Research Policy, Elsevier, vol. 24(1), pages 51-76, January.
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    Cited by:

    1. Alex Bara & Pierre LeRoux, 2018. "Technology, Financial Innovations and Bank Behavior in a Low Income Country," Journal of Economics and Behavioral Studies, AMH International, vol. 10(4), pages 221-234.
    2. Sahaym, Arvin & Treviño, Len J. & Steensma, H. Kevin, 2012. "The influence of managerial discretion, innovation and uncertainty on export intensity: A real options perspective," International Business Review, Elsevier, vol. 21(6), pages 1131-1147.
    3. Nelson Roberto Furquim, 2017. "The Impact of Innovative Products in the Metallic Zinc Market Growth in Brazil," Brazilian Business Review, Fucape Business School, vol. 14(4), pages 403-416, July.
    4. Edward J. Malecki, 2002. "Hard and Soft Networks for Urban Competitiveness," Urban Studies, Urban Studies Journal Limited, vol. 39(5-6), pages 929-945, May.

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