From capacity building to technological transformation

Julian Pineres R. McS IIA, SPRU, University of Sussex

PhD (c), CENTRIM, University of Brighton

11/25/10

Políticas de CTI e instrumentos de Transferencia Tecnológica hacia las PYMECURSO DE SISTEMAS DE INOVACCIÓN Y POLÍTICAS PÚBLICAS

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OUTLINE

1. Technological opportunities: problems of availability and accessibility

2. Insights behind firms’ technological learning and transformation

3. A view of capacity building and technological transformation

4. Technological trajectories and regimens: one fit all?5. Concluding remarks

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1. Technological opportunities: problems of availability and accessibility

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Learning dynamics in organizations: The importance to understand how organizations learn in a given TS

Universities

Knowledge sources and labour supply

Public bodies for the promotion of

S&T + I

FocalFirms

Research result

Financial flows

Staff

Fina

ncial

flow

s

Consulting and sciencitifc staff

Financial flow

s

Technological suppliersResearch centres and

specialise service business (Technical and managerial)

Inve

stm

ents

on

spec

iali

se K

&R

Fin

anci

al f

low

s

1

4 2

Venture Capital

Large firms - MNs

Financial flows

ReturnsPlus - value

StaffFinancial flows

Research results

Resea

rch

resu

lts

Staff

Consu

lting

and

scien

tific

staff

Con

sult

ing

and

scie

ntif

ic s

taff

Source: Adapted from Orsenigo, 2004

Technological opportunities: knowledge production and diffusion in a given TS

Knowledge from who Knowledge diffusion mechanism Type of knowledge essentially produced

Governance mechanism

University based- knowledge Labour mobilityPublished papersLicensesSpecialised formal trainingDirect Interventions (consultancy?)Joint / contract R&DSpin -off

Non – market research based knowledge

Networks

Technological and Research centre based - knowledge

LicensesSpecialised non -formal trainingDirect Interventions (consultancy)Joint / contract R&DSpin -off

Non – market research based knowledge

Commercial applied knowledge

Market (through third parties)Networks

Consultancy groups based-knowledge

Specialised formal trainingContract assistant for technical and managerial implementationsBlue print and operating instructions

Commercial applied knowledge

Market

Technological suppliers based- knowledge

Embodied technology and designBlue print and operating instructions

Commercial applied knowledge

Market

Large firm based-knowledge Labour mobilityLicenses

Non market applied Knowledge

HierarchiesNetworks

Supplier costumer relation based - knowledge

Commercial interactionEmbodied technology and designBlue print and operating instructions

Non market applied knowledge

Hierarchies

Sources: the author

Industry and Innovation: market and technology

Ix Industry-specific knowledge: Routines and

managerial specific knowledge) T x

Mx

Learning schemes -Imitation-Spin off from large firms-Spin off from Universities-Labour mobilization dynamics

T x1

Mx 1

Learning schemes (Tx1 - Mx1)-Training-Technological acquisition-Labour mobilization dynamics-Technical implementation-E&D – R&D

Technical specific knowledge

Market specific knowledge

7

A learning and capabilities perspective on Innovation studies

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Studies on innovation have emphasized that:

Learning and innovation differ substantially across industries and size of firms.

The process is as important as the outcome to promote innovation

External knowledge sourcing in general and collaboration in particular is essential to upgrade technological capabilities.

One of the fundamental difference among firms within industries with regards to innovativeness is the firm innovation behaviour

Searching attitude Perception of the technological alternatives and logical future developments Sources of information, knowledge and resources for technological change Expectations about returns of R&D Appropriability conditions

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Reasons to understand technological accessibility

It is important to understand the learning dynamics when outside and inside knowledge interact

It is important to understand the mechanisms that firms use to promote technological change.

It is important to understand which capacities the organizations needs and have in a given technological context

Which mechanisms are better used for each stage of capacity building

Why?

Its important to allocate resources accurately

Its is important to increase the probabilities in which the effectiveness of technological transformation happen in organizations

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2. Insights behind firms’ technological learning and transformation

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Defining the complexity of learning in organizations: key issues and main arguments

Degree of knowledge explicitness– Codified and tacit knowledge (e.g. Nonaka, 1991; Zander and Kogut, 1995) – Knowledge ambiguity (e.g. Szulanski, 1996; Simonin, 1999)

Knowledge orientation process– Single and double loop learning (Argyris, C, 1974; 1976) – Exploitation and exploration (March, 1991)

Knowledge integration from external sources: inter-organizational learning– Governance and Trust (Mayer et al, 1995; Nooteboom et al, 1997; Roussau et al, 1998) – knowledge acquisition and knowledge accessing (e.g. Grant, 1996)– Methods for learning external knowledge, passive, active, interactive (Lane and

Lutbakin, 1998) – Learning from a partner, Learning about the partner, Learning with the partner, (inkpen

and Tsang, 2007; Inkpen and Currall, 2004)

10/12/10 The interrelated dynamics of intra-and inter-organizational learning processes in the context of co-funded R&D alliances

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Defining the complexity of learning in organizations: key issues and main arguments

Level of learning and knowledge integration process: from the individual to the organization– Information distribution, interpretation and organizational memory (Hubert, 1991) – Preparation, acquisition, assimilation and improvement (Kim, 1997) – 41 framework: a.intuiting, interpreting, b. interpreting, integrating, c. integrating, institutionalizing

(Crossan et al, 1999)

Deliberative and non-deliberative learning– Learning by doing (e.g. Epple, Argote and Devadas, 1991)– Intent to learn (Chen et al, 2003; Tsang, 2002 )– learning strategy (Mintsberg, 1990; Inkpen and Tsang, 2007)– Wiliness and ability to learn (Lin et al, 2009)

Learning and degree of change: driver or enabler?– Capabilities transformation: retirement, refreshment, replication, redeployment, recombination and

renewal (Helfat and Peteraf , 2003) – Technical fitness (Teece, 2007) – Modification of routines (e.g.Feldman and Pentland, 2003; Feldman, 2000)

10/12/10 The interrelated dynamics of intra-and inter-organizational learning processes in the context of co-funded R&D alliances

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3. A view of capacity building and technological transformation

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Modes of knowledge sourcing

Knowledge orientation process

Type of component Knowledge

Features of knowledge based production: the framework foundations

Learning dynamics in organizations: The importance to understand how organizations learn

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It refers to the efforts that organizations make to enable a learning process. It might be considered as learning process interface.

They are collective activities through which the organization systematically generates and modifies its operating routines in pursuit of improved effectiveness. (Zollo and Winter (2002).

A similar concept was defined by Nelson and Winter (1982), they identified the learning schemes as ‘search routines’.

Generic examples:

Learning schemes (construct of learning)

Specialized training

Engineered andscientific expertise

Equipment and license acquisition:

Technical and Managerial implementation process

R&D and E&D

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‘Learning schemes’ can also be defined as the underlying mechanisms for capacity building (Narayanan et al, 2009).

Learning dynamics in organizations: The importance to understand how organizations learn

R&D and E&D

Specialized training

Engineered and scientific expertise

Equipment and license acquisitionsTechnical and Managerial implementation process

Lear

ning

sch

emes

1

Interactive

Influence Modes of knowledge sourcing

2

Passive

Active

Governance Complementarities

3

Reflection

Assimilation

Integration

Learning-knowledge process 4

scop

e

KnowledgeResourcesCapabilitiesRoutines

Outcome

Effici

ency

Effica

cy

Inno

vativ

enes

s

Strategy StructureIndividual agency

Source: the author

Explicatory factors

5

Effectiveness

16

From learning to capacity building

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Modes of knowledge sourcing

Passive Active Interactive

Knowledge orientatio

n proce

ss

Explorati

ve Inventive capacity (IC) Absorptive capacity (AC)

Exploitati

ve Formative capacity (FC) Transformative capacity (TC) Connective capacity (CC)

Source: the author adapted from Lichtenthaler and Lichtenthaler, 2009 and Lane and Lubatkin, 1998

Organizations over their lifetime develop different levels of capacities according to the effective use of a variety of “learning schemes”

Capacity it might be defined as the firm’s ability to effectively combine its internal knowledge with the external one to enhance and/or modify their operation routines. The external knowledge enter to the organization accordingly to its attitude to it.

Dimensions of the technological transformation: effectiveness and consistency

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Learning scheme Expected Scope Expected Outcome Capacity level

•Engineering expertise•Internal practice Training

Enhancing the knowledge in practice of doing something (learning by doing)

Efficiency Formative Capacity

•External training•Hired engineered or professional expertise•Consultancy for planning the tech. orientation•Technical and managerial Implementation•Product design modifications•Equipment acquisition

Enhancing of capabilities. There are changes whether on the existing knowledge or resources

Efficacy(productivity – cost efficiency – value added)

Transformative capacity

•Collaborative Technical and managerial implementation• Collaborative product design modifications•The collaborative use of equipment and laboratories

Connective capacity

•internal scientific expertise• Highly specialized equipment • licenses acquisition •Hired scientific expertise•Contract research with Universities or research centres•E&D / R&D

Movement towards other capabilities and routines

Innovativeness Inventive capacity

•Collaborative E&D / R&D•Collaborative acquisition of highly specialized equipment• Collaborative acquisition of licences

Movement towards other capabilities and routines

Innovativeness Absorptive capacity

Source: the author

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Towards enhancing the core competence: Formative capacitiesTowards Market Opportunity driven: Transformative and connective capacityTowards strategic focus: inventive capacityTowards innovative oriented: absorptive capacity

Direction of the technological transformation

Strategic focus

Innovative oriented

Core competence

Market opportunity driven

Market diversity

Tech

nolo

gica

l he

tero

gene

ity

Rela

ted

Div

erge

nce

Related Divergence *Dashed lines represent possible trajectories

???

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From learning to capacity building and technological transformation

11/25/10Source: the author

Learning schemes

Years

•Engineering expertise•Internal practice Training

•External training•Hired engineered or professional expertise•Consultancy for planning the tech. orientation•Technical and managerial Implementation•Equipment acquisitionIn

crea

se in

the

tech

nolo

gica

l lea

rnin

g eff

orts

Core competence

Market opportunity driven

Absorptive capacity

•internal scientific expertise• Highly specialized equipment • licenses acquisition •Hired scientific expertise•Contract research with Universities or research centres•E&D / R&D

Strategic focus

•Collaborative E&D / R&D•Collaborative acquisition of highly specialized equipment• Collaborative acquisition of licences

Innovative oriented

Realize capacity

Potential capacity

Realize capacity

Realize capacity

Realize capacity

Potential capacity

Potential capacity

Connective capacity•Collaborative Technical and managerial implementation•Collaborative product design modifications•The collaborative use of equipment and laboratories

Formative Capacity

Transformative capacity

Inventive capacity

T0To + i

T1

T1’

T1 + i

T2 T2 + i

T3 T3 + in

Explicatory features (multilevel framework)Individual related feature1. AgencyOrganization related feature2. Structure3. StrategyLearning scheme related feature4. Governance5. Complementarities

Dimensions of technological transformation1. Direction. Technological heterogeneity and market diversity2. Consistency of the technological learning trajectory3. The pace and rate of the transition process4. Effectiveness of the technological learning trajectory (knowledge assimilation

and transformation)

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3. Technological trajectories and regimens: one fit all?

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SYSTEMIC RATIONALITIES FROM A NON-SYSTEMIC APPROACH

MAKE SENSE OF THE STAGE OF THE SCIENCE AND TECHNOLOGICAL DEVELOPMENT OF AN SPECIFIC TECHNOLOGICAL AREA….. Technological opportunities Research institutes and Universities capacities

MAKE SENSE OF THE EXTENT OF THE DEGREE OF TURBULANCE OF THE INDUSTRY…. Different technological regimes pursue different paths to innovation Technological trajectory Firms’ capacities

MAKE SENSE OF THE INSTITUTIONAL CONDITIONS…. Mitigating failures of the innovation system

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SYSTEMIC RATIONALITIES FROM A NON-SYSTEMIC APPROACH

COMPLEMENTARY CAPACITIES AND ROLE OF

The Universities….

The Research Centres…..

The public bodies…..

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An understanding of the subject is as important as the understanding of the object for change……

Technological landscape: appropriability conditions opportunities, agents capacities and their interactions

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Which are the conditions of the technological system when it is at its initial stage of development?

•Low level of technological opportunities

•Uncertain direction of the technological trajectory

•Overlapping functions (TS functions)

•Low levels of learning capacities

•High degree of turbulence (entrances and deaths)

•Low concentration / dispersion

•Price driven competence

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Concluding remarks: some reflections to discuss

Within the Colombian context many technological systems (TS) are in a initial stages of development. Therefore those TS lagged behind from the technological frontier. S&T and Innovation systems should be technological oriented? (industry?)

Under the previous circumstances actors are at different levels of capacities. This level of diversity implies some kind of flexibility from the policy perspective and understanding of different type of management practices.

Which kind of incentives should be undertaken under this conditions? which are the expected outcomes and scopes? Incentives for capacity building? (to whom? firms, universities, research centres?). E.g Collaborative programs may successfully leverage some firms technological transformation? (behaviour) in some industries but not that of others.

This perspective also suggests that firms within a giving industry are at different development stages having also different levels of capacities. Which capacities should be addressed from a public body? Who should support the initial stages of capacity building (e.g. Formative and transformative capacities).

From a policy perspective this approach suggests that innovation support programs should differentiate also the expected outcome and scope from agent to agent while there are certain level of standard capacities?. The contribution of a giving actor is different within the system, however from an strategic point of view a public body should take into account a systemic perspective.