Technology Market Transactions

Technology Market Transactions

Auctions, Intermediaries and Innovation

Frank Tietze

Frank Tietze delivers an in-depth discussion of the impact of empirical results upon transaction cost theory, and in so doing, provides the means for better understanding technology transaction processes in general, and auctions in particular. Substantiating transaction cost theory with empirical auction data, the author goes on to explore how governance structures need to be designed for effective distributed innovation processes. He concludes that the auction mechanism is a viable transaction model, and illustrates that the auction design, as currently operated by market intermediaries, requires thorough adjustments. Various options for possible improvements are subsequently prescribed.

Chapter 6: Technology Properties

Frank Tietze

Subjects: economics and finance, economics of innovation, intellectual property, innovation and technology, economics of innovation, intellectual property, technology and ict

Extract

6.1 DEFINING TECHNOLOGY Schmookler (1966: vii) defines technology as ‘the social pool of knowledge of the industrial arts. Any piece of technological knowledge available to someone anywhere is included in this pool by definition’ and inventions are ‘the “bits” that are added to the existing stock of knowledge’.1 Delmas (1999: 638), referring to Loveridge (1990) and Burgelman and Rosenbloom (1989), defines technology as a ‘set of competencies. It is the practical knowledge, know-how, skills, and artifacts that can be used to develop a product / service and / or production / delivery system. Technologies can be embodied in people, materials, cognitive and physical processes, plant, equipment, and tools. Key elements of technology may be implicit, existing only in an embedded form (like trade secrets based on knowhow) and may have a large tacit component’. Drawing on the knowledge or the resourcebased view of the firm, Granstrand (2000a: 548) defines technology in the context of the technology-based theory of the firm as a ‘body of knowledge about techniques and technical relationships, typically regarding ways to transform material matter to achieve more desirable physical effects. The body of knowledge referred to may be more or less specialized’. Following the definition proposed by Tschirky and Koruna (1998: 227), Hentschel (2007: 5), Escher (2005: 17), and Birkenmeier (2003: 17) state that ‘technologies enclose specific and collective knowledge in explicit and implicit forms for product and process-oriented usage based on natural, social and engineering-scientific knowledge’.2 OECD (2007: 780) defines technology rather generically as ‘the state...

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