The Process Of Technological Change At Firm Level

Author : Florian Metzler
Publisher :
ISBN 13 :
Total Pages : 345 pages
Book Rating : 4.:/5 (112 download)

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Download or read book Firms, Industries, and Technological Change written by Florian Metzler and published by . This book was released on 2018 with total page 345 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis presents a new empirical approach as well as a new patent-based dataset for studying disruption and technology transition cases. At the core of this approach lies a novel engineering systems framework of technological change. The framework focuses on the relationship between changes in technological competencies and changes in product designs, and encompasses both firm-level and industry-level dynamics. The new framework and dataset are applied to the study of three cases of technology transition during the 1993- 2012 period. The cases include (1) disruption in the mobile phone industry with a focus on Apple, BlackBerry, and Nokia; (2) disruption in the photography industry with a focus on Fujifilm, Canon, and Kodak; and (3) technology transition in the automotive industry with a focus on Toyota, Volkswagen, and GM. The former two industries comprise widely discussed disruption cases, allowing me to demonstrate advantages of the presented approach and develop novel insights into these cases. The third case, on the automotive industry, generates complementary insights by considering an industry with products comprising more integrated product architectures. The case selection allows for cross-case comparisons to begin endogenizing industry-specific factors. The thesis' main contributions are methodological and theoretical: First, I present a new dataset - and corresponding data assembly methods - of comprehensive corporate patent portfolios. The portfolios take into account each firm's corporate family tree structure as well as acquisitions. As such, the dataset reflects the actual range of firms' codified technological activities more closely than previous efforts and enables a more accurate view on how technological change manifests in firms and industries. To connect the data to theory, I develop a set of novel metrics to operationalize semantic concepts such as technological diversification and concentration of portfolios as well as firms' technological core and growth competencies. These metrics are based on a newly developed variance measure for hierarchically structured networks. I define growth competencies as competencies that undergo rapid year-to-year growth outside of a firm's core competencies. By identifying incumbents' growth competencies from historical data before major transitions, I am able to successfully hindcast future new entrants in the cases presented. Further, I introduce the concepts of technology space and product space as mappings of compositions of technological competencies and of technological competencies required by compositions of products. Second, the thesis makes theoretical contributions to resource-based view (RBV) and disruption literatures. Specifically, it presents a dynamic extension to the RBV, endogenizing technological change as well as firm-industry interconnections with regard to the emergence of technology convergences and the evolution of product designs. My findings suggest that a firm's relative position and movement in technology space needs to be considered separately from its position and movement in product space, i.e. its changing composition of competencies and its changing composition of products. Specifically, whereas firms' movements in product space can appear abrupt and even surprising - such as the sudden entry into new markets - my analysis shows that changes in technology space tend to be slower, more continuous, and more predictable. I find that in disruption cases such as with Apple's sudden "entry" into the mobile phone industry, the new framework reveals that it was in fact the mobile phone industry that gradually "entered" Apple's position in technology space - as the technological requirements of phone industry products became more and more similar to Apple's preexisting, and highly stable, competencies. Moreover, I extend the concept of technology-product connections, as put forth statically by RBV theorists, by adding a time-dependent dimension. I argue that incumbent failure - such as Nokia's and Kodak's - can be explained by incumbents' inability to diagnose and respond to the gradual weakening of their technology-product connections; in other words, by neglecting to either adjust their technological competencies or to adjust their product offerings in response to technological change. In turn, a firm with greater awareness of its own composition of technological competencies relative to its competitors as well as the changing technological requirements of prevalent product designs can deliberately incorporate such insights into strategic decision-making. In the empirical cases, I observe the ability to sense dynamics in technology and product spaces relative to the firm, and the ability to time the firm's actions accordingly, to be more present in some firms than in others. I term the existence of such abilities timing and sensing capabilities and propose them to be a concrete and operationalizable subset of Dynamic Capabilities.