Systemic Linkages Between Knowledge and the Market
New Horizons in the Economics of Innovation series
Edited by Blandine Laperche, Dimitri Uzunidis and G. N. von Tunzelmann
Chapter 7: Dual Technological Knowledge and the Firm’s Trade-Off between Civilian and Military Activities
7. Dual technological knowledge and the ﬁrm’s trade-oﬀ between civilian and military activities Michel Callois 1. INTRODUCTION Since the seminal work of Lundvall (1992), knowledge has been considered as an asset that ﬁrms must be able to manage in order to gain competitive advantage. As an asset, knowledge is a central feature of a ﬁrm’s production in several ways: research and development, cooperation in innovation through networks, social relationship between members inside the organization, etc. Knowledge presents some characteristics of a public good. In other words, it cannot be easily transferred between two entities, nor can it be ‘fully’ appropriated by the ﬁrms that have produced it. In fact, this approach reveals the determinant that modiﬁes its production, its signiﬁcance and its mobility. In this perspective, knowledge can be observed as a system where forces like ﬁrms’ behaviours, institutions, and inter- and intra-industry relationships tend to shape its economic meaning. The starting point of this chapter is to analyse the case of the defence industry as a speciﬁc institutional environment. During the Cold War, the defence industry was based on a predominant single user environment, whose primary goal was to prevent threats in the short and long run. Thus, government-based demand shaped the technological opportunities of ﬁrms in order to achieve this critical goal. During the post Cold War era, this ‘programme-based’ role switched to a ‘client-based’ role. This had a deep impact on the behaviour of defence competitors: the reconﬁguration of the aerospace industry in...
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