Abstract
Innovation occurs thanks to the ability of humankind to produce and exploit practical knowledge. This chapter provides a discussion on the different forms of knowledge, and—following Nelson and Winter’s evolutionary theory of the firm—it shows the centrality of knowledge in studying the nature of organizations. Moreover, it provides a high-level perspective on organizational learning and on its role in determining competitive advantage. Finally, the chapter provides a discussion on creativity and on its relationship with knowledge and innovation.
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Notes
- 1.
However, as Bertrand Russell* (1972–1970) pointed out, the problem is that “no one knows what a belief is, no one knows what a fact is and no one knows what sort of agreement between them would make a belief true”.
- 2.
In Economics, a private good is characterized by the fact that it is rivalrous* (i.e., consumption by an individual prevents the simultaneous possibility of others to consume it) and excludable* (i.e., it is possible to prevent someone from consuming it). An example is a video taken with a smartphone and that is residing in its memory. Conversely, a public good is non-rivalrous (consumption by an individual does not prevent simultaneous consumption by others) and non-excludable (i.e., it is not possible to prevent someone from consuming it) as, for instance, would it be for the same video, were it broadcasted by the local TV station. The two categories do not cover all combinations. On the one side, you can have club goods, which are non-rivalrous and excludable (e.g., the same video, but shown on pay-TV), and common goods, which are rival and non-excludable (e.g., the same video, shown on my smartphone to the passersby on the street, which is limited to the ones that are able to huddle around it).
- 3.
For instance, the tacit knowledge possessed by an individual or the explicit knowledge contained in a personal recipe book would clearly be a private good. The digital version of the same recipe book placed on Facebook would certainly be non-rival from a technical perspective, but its excludability would depend on the choices of who posted it. Should she/he share it on a public profile, this would make it a public good, while posted on a private profile, it would be a club good reserved for friends (provided they don’t send copies around, of course). Finally, should she/he place the recipe book hanging from a chain in front of the doorstep, this would make it a common good (until someone steals it, or takes pictures and makes a pdf version to share).
- 4.
In the case of Life Sciences, the relationship is very tight and it is at times difficult to discriminate between activities, actors and languages. An academic researcher will be likely to have a good understanding of industrial needs, while a researcher in the pharmaceutical industry will routinely read academic papers. Conversely, if one looks at Computer Science, a programmer engaged in writing code will use a substantial amount of practical know-how, but with a loose connection with the knowledge developed in the academic domain.
- 5.
- 6.
Based on this perspective, management’s duty is to respectively recruit and purchase people and equipment, so that the difference between the economic value created and the cost is maximized. In the case of human resources, this does not simply mean recruiting highly effective people, but especially teams that will work well together and made up of individuals whose salaries are not too high with respect to their ability to produce economic value.
- 7.
- 8.
The difference between optimizing and satisficing economic behavior is a cornerstone of the theory of bounded rationality * (1991) of Herbert Simon* (1919–2001).
- 9.
As an example, one can think of the competitive advantage gained by Dell Computers in the ‘90 s, by running a business model based on direct sales and Assemble-To-Order operations, which was significantly different from the prevailing model, based on Make-To-Stock operations and a complex distribution chain. Dell Computers developed this successful business model because its founder, Michael Dell (1965–), started this way in 1984, by selling computers to his friends from his college dorm room and understood that this model could be scaled. There were countless garage-based computer assemblers like Michael Dell in the world, but he was probably unique in understanding the potential value of this model and having the ambition and the determination to realize his vision.
Another example is the competitive advantage enjoyed by Toyota Motors Company, based on the so-called Toyota Production System (TPS) set of techniques. TPS has been progressively developed within Toyota, first by Kiichiro Toyota (1894–1952) and then by Taiichi Ohno (1912–1990), as a way to improve manufacturing operations under the peculiar circumstances of Japanese culture and economic environment.
- 10.
It is noteworthy that established competitors to Dell, such as Hewlett-Packard, did not try to replicate its business model, but competed against Dell by improving their own traditional model. Similarly, Toyota never kept its business practices secret, but publicized them, possibly betting that imitators in the West would not have been able to reach the same level of performance, but would have facilitated diffusion of these practices, making it easier to find adequate suppliers.
- 11.
Creative processes are typically considered only those divergent in the creativity literature; while in design, both divergent and convergent thinking can lead to creative outcomes (Basadur et al. 2000).
- 12.
It comes quite natural, when dealing with this topic, to think about ‘The Rock’, the visionary poem that T.S. Eliot wrote in 1934, and remember that we always neglected the fourth element cited by Eliot, i.e., wisdom.
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Cantamessa, M., Montagna, F. (2023). Technological Knowledge and Organizational Learning. In: Management of Innovation and Product Development. Springer, London. https://doi.org/10.1007/978-1-4471-7531-5_2
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