Building Dynamic Capabilities in Rapid Innovation-based Industries
Edited by Stuart Wall, Carsten Zimmermann, Ronald Klingebiel and Dieter Lange
Chapter 5: Strategic Management Theory and the State: Insights from the Dynamic Capabilities View
5. Strategic management theory and the state: insights from the dynamic capabilities view Dan Breznitz1 and Carsten Zimmermann2 ABSTRACT With the changes brought about by the rise of new rapid-innovation-based industries and the international fragmentation of production, we lack a theory with which to conceptualize our understanding of the role of the state in industrial development. We argue, however, that exactly such a framework already exists in the management literature. The best analogy for expressing the role of the state in industrial development is in terms of a strategic manager within an unmanageable conglomerate. The state role can therefore be seen as one of creating dynamic capabilities and stimulating their usage within the ‘corporation’, which is in this case, the national economy. It provides signals to induce agents to utilize resources and capabilities to enable the development of long-term competitive advantage in the global market place. This chapter develops these insights for the specific case of rapid-innovation-based industrial development. It also demonstrates why we believe this framework can lead to a superior understanding of the empirical reality, thus providing a powerful tool for future policy formulation. INTRODUCTION In the recent past a variety of regions and states have successfully grown their rapid-innovation-based industries. In some regions, globalization and the fragmentation of production have been the initiator and momentum to enhance this development. Though there is a variety of literature on the various success stories, we lack a theoretical framework to help structure the idiosyncrasies of the multifaceted approaches that states...
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