Handbook on the Economics and Theory of the Firm
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Handbook on the Economics and Theory of the Firm

Edited by Michael Dietrich and Jackie Krafft

This unique Handbook explores both the economics of the firm and the theory of the firm, two areas which are traditionally treated separately in the literature. On the one hand, the former refers to the structure, organization and boundaries of the firm, while the latter is devoted to the analysis of behaviours and strategies in particular market contexts. The novel concept underpinning this authoritative volume is that these two areas closely interact, and that a framework must be articulated in order to illustrate how linkages can be created.
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Chapter 26: Innovative Platforms, Complexity and the Knowledge Intensive Firm

Pier Paolo Patrucco


26 Innovation platforms, complexity and the knowledge-intensive firm Pier Paolo Patrucco 26.1 INTRODUCTION Economic approaches have evolved in parallel with the firm, acquiring an increasing centrality in the dynamics of innovation. As a matter of fact, only in quite recent years technological advances – long considered an exogenous variable, uncontrollable and not influenced by economic actors – has taken a leading role in the economic literature, so that it is now considered a factor crucial to the competitive positioning of business organizations and the key to growth of modern post-industrial societies (Aghion and Howitt, 1997; Acemoglu, 2008). The black box of standard economic theory (a production function that transforms inputs into outputs through strategies not investigated with the tools of economists), has been gradually redefined thanks to the insights of different approaches that have taken place in the history of economics. These led to a new understanding of the firm as a learning organization that adopts intentional strategies for the improvement and expansion of its technological capabilities, and ultimately, to strengthen its innovative potential. While throughout most of the twentieth century the large company that innovates through vertical integration of R&D, taking advantage of economies of scale and scope, has been regarded as the locus par excellence of the production of technological knowledge and innovation, a range of factors have emerged recently – such as the increasing environmental turbulence, the intensification of competition and the increasing complexity of the innovation process. These factors have radically changed the framework and questioned the viability...

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