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Complexity and the Economy

Complexity and the Economy

Implications for Economic Policy

Edited by John Finch and Magali Orillard

The authors examine the causes and consequences of complexity among the broadly economic phenomena of firms, industries and socio-economic policy. The book makes a valuable contribution to the increasingly prominent subject of complexity, especially for those whose interests include evolutionary, behavioural, political and social approaches to understanding economics and economic phenomena.

Chapter 11: The Codification of Technological Knowledge, Technological Complexity, and the Division of Innovative Labour: A Case from the Semiconductor Industry in the 1990s

Norio Tokumaru

Subjects: economics and finance, evolutionary economics, institutional economics


Norio Tokumaru 1. INTRODUCTION The aim of this chapter is to determine how the two main trends of recent technological change, codification of technological knowledge and increasing complexity of technological knowledge, interact with each other and then how they affect the organization of innovative activity. In innovation studies, it has been argued that important technological knowledge is in large part tacit and context-dependent, which makes it difficult to transmit that knowledge among different organizations. Therefore it is necessary to organize the innovative activities either in-house or among organizations in a long-term relationship in order to exchange technological information expediently. This reasoning is captured schematically in the ‘chain-linked model’ by Kline and Rosenberg (1986). Recently it has often been argued that, because the technological knowledge is more and more codified and more easily transmitted by ICT, the long-term relationship is becoming obsolete as an organizational form of innovative activity (Arora and Gambardella 1994; Balconi 2002). Aoki (2002) has even argued that this is one of the causes of a decline in Japanese competitiveness. In contrast, US industrial organization, which is typically understood as the ‘Silicon Valley model’, is argued to be well suited to benefit from the development of ICT. High mobility of human resources and monetary resources at least partly explains the resurgence of the US semiconductor industry in the 1990s (Langlois and Steinmueller 1998; 237 Finch 02 chap07 237 10/11/05 15:51:32 238 Complexity, strategies and policies Macher et al. 1999). However the implications...

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