Localized Technological Change in Italy
Chapter 5: The Role of External Factors in the Localized Exploitation of Technological Knowledge: Localized Appropriability and Directed Technological Innovation
5. The role of external factors in the localized exploitation of technological knowledge: localized appropriability and directed technological innovation The analysis of knowledge exploitation provides further elements of insight into the understanding of the introduction of technological innovations (March, 1991). In the Schumpeterian approach, technological knowledge can be appropriated and exploited effectively through downstream integration both in the creation of new firms and by incumbents that can take advantage of existing barriers to entry and hence to imitation. This takes place when innovators are large corporations that enjoy the advantages of barriers to entry based upon increasing returns to scale (Schumpeter, 1942). Existing barriers to entry become barriers to imitation for new products. Lead times provide innovating incumbents with the opportunity to reap the advantages of economies of scale before potential competitors are able to imitate the innovation. The corporation is the institution that provides innovators with the opportunity and the incentives to appropriate and exploit technological knowledge (Chandler, 1962, 1977, 1990). David Teece has much enriched the Chandlerian analysis of embodied appropriation. He suggests that firms can try to exploit their technological knowledge by bundling it with complementary assets that are under their exclusive control (Teece, 1986, 1998, 2000). According to this approach, firms try to search for complementary assets depending on the characteristics of their proprietary knowledge. The bundling of knowledge with other assets that are under a firm’s exclusive command becomes an effective strategy to appropriate technological knowledge and hence to exploit it better. 34 M2517 -...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.