John Howells

A socio-cognitive approach to innovation

Abstract This paper argues that case studies in innovation research at the level of the firm require an explicit model of how people think and act in organisations. The ‘socio-cognitive’ approach which is outlined here combines Weicks social psychological ideas with Teeces characterisation of the firm by its technological knowledge base. It is argued that a cognitive approach accommodates the tacit nature of technological knowledge well, and that artefacts can be considered as cognitive resources. A distinction is made between the social control of production technology (the firm) and of user technology (typically the market). This distinction is used as the basis for conceptualising technological innovation as the creation by individuals within the firm of ‘cognitive ensembles’ composed of cognitive elements drawn from both the technological base of the firm and market conceptions. This focus on the process by which innovation is generated within the firm leads to a brief discussion of previous work on the creative process and the relevance of the socio-cognitive approach to macro-level studies of technological change.

Forget unlearning? How an empirically unwarranted concept from psychology was imported to flourish in management and organisation studies

We provide a critique of the development in organisation studies of the idea of ‘unlearning’ as allegedly imported from the psychology literature by Hedberg and understood to mean the manageable discard of knowledge precedent to and aiding later learning. We re-review the psychology literature and in contrast to Hedberg, find that this definition of unlearning is not empirically warranted. We re-examine a selection of highly cited articles in the organisational literature that claim to have conducted empirical research into the Hedberg model of unlearning. We find none provide evidence of its existence. Typically, under the label ‘unlearning’ evidence is provided of a conventional process of theory-change, the setting aside (not deletion) of an established understanding in favour of new understanding when presented with perceived new facts. In all cases that we examine, clear alternative and less problematic concepts should provide a better conceptual framework for the research, such as learning, theory-change, discard of practice and extinction. It follows that the unlearning literature is not in fact the independent, scholarly and scientific literature that many of its adherents believe it to be. We recommend that for concepts allegedly imported from other disciplines more frequent commissioning of cross-disciplinary reviews may encourage the critical works so obviously lacking in the unlearning literature.

EFTPoS: Impact on Channel Relationships

Considers marketing information and channel relationship issues raised by the commercialization of EFTPoS systems. Discusses the role and experience of the retailer, banker and consumer, and their evolving relationship in the context of electronic payment systems. Drawing on previous analysis of information flow within channels, where a dyadic relationship has been described, considers the triadic relationship created through the use of electronic payment systems at the point of sale, and the impact that consequent access to information will have on the relationship between bankers and retailers.

Management and the hybridization of expertise: EFTPOS in retrospect

This paper will show how the UK banks learnt the strategic value of retaining IT expertise in-house through their experience of the design of EFTPOS networks. The banks began by attempting to ‘buy-in’ IT expertise from other organizations, but they were first compelled to locate expertise in a jointly-controlled organization called EFTPOS UK, then forced to develop the new IT expertise within their existing IT departments. These manipulations of the ‘organizational location’ of expertise gave individual banks the ability to create their own technology strategies, which they promptly exploited in an attempt to gain competitive advantage. It will be argued that a greater capacity to form individual technology strategies and exploit competitive advantage will result from the active management of two other dimensions of expertise: these are termed the internal location and the individual partition of expertise. The first term refers to where in the organization technical expertise is located and the second to how technical expertise is divided between individuals. The process by which the individual partition of expertise changes is called the hybridization of expertise and it is argued that although this is to an extent ‘natural’ it may certainly be managed. The case for a more aggressive and explicit expertise strategy, including the active management of the process of hybridization, is made by reference to the nature of the network design and practices in the management of technical expertise in other industries.

EFTPOS before and after: retailer reaction

EFTPoS (electronic fund transfer at point of sale) seen as a potential development in the 1970s, increasingly became a realistic proposition during the 1980s. In 1985, Eftpos UK Ltd, a joint endeavour by banks and building societies, was established to develop a unified clearing system. In advance of national introduction, three cities, Edinburgh, Leeds and Southampton, were chosen to pilot the Eftpos UK Ltd system. These pilot schemes began in late 1989. This article presents survey findings from the Edinburgh pilot scheme. Retailer response was sought before and after the trial to ascertain changing perceptions. The results throw an interesting light on the evolving attitudes of retailers to the system and indicates areas where future marketing of EFTPoS systems should be modified.

Inventing-Around Edison's Incandescent Lamp Patent: Evidence of Patents’ Role in Stimulating Downstream Development and Competition

While some surveys and court cases refer to the practice of “invention around�? or “design around,�? it is often-overlooked as means by which patents promote economic development through competition. We provide the first detailed empirical study of inventing around patent claims in a study of how the enforcement of Edison’s incandescent lamp patent in 1891-1894 stimulated a surge of patenting. Most of these patents disclosed inventions around that circumvented the Edison patent claims by creating substitute technologies to enable participation in the market. Some of these patents introduced important new technology that became prior art for new fields. This indicates that invention around patents contributes to dynamic efficiency and that it is not necessarily duplicative research. Contrary to widespread understanding, the Edison lamp patent did not suppress technological advance in electric lighting. The market position of General Electric (“GE�?), the Edison patent-owner, weakened through the period of this patent’s enforcement.

Technology and globalization: the european payments system as a case of non-globalization

This paper shows that in the design of European EFTPOS payment networks the dominant influences on network design were national; these included national banking industry structures, regulatory regimes, retail industry structures and cultural attitudes to debt. There was no sign of the technology itself driving globalization—on the country, the network technology is ‘configurable’ and appears subject to shaping by many distrinct national–social contexts. Where there was some movement to ‘globalization’, understand as a process of standarization of the service provided through the technology acros national frontiers, it derived from the explicit social objectives of the European Commission and was not an inevitable result of the ‘technology’ itself. The argument is widened to show that much of the evidence for the overall ‘trend’ to globalization may be reinterpreted as the result of a process of ‘industrialization’ in certain parts of the world. In conclusion, the very existence of the assumed ‘trend’ to g...

The Growth and Agglomeration of the Danish Furniture Industry - The Role of Design, Post-War Markets, IKEA-sourcing and Proximity-Induced Firm Learning

Comparison of time series data for developed European furniture industries shows that only in the 1950s did the Danish furniture industry experience extraordinary growth. The plausible causes of that growth are state-subsidised export marketing of Danish design in the US and post-War exploitation of recovering European markets in the 1950s. Thereafter typically high European growth rates for furniture rather than proximity-induced firm learning explain the development of the Danish furniture agglomeration. Despite evidence of IKEA’s development of Danish furniture suppliers there is no evidence that IKEA-sourcing strategy had a unique influence on the growth of the Danish industry or the particle board furniture sub-segment. The Danish economic specialisation in furniture today appears to be the result of unique events in the 1950s and not thereafter.

Technology suppression strategies as illusion: the practical consequences of a misunderstanding of the function of patents

This paper critically reviews significant (highly cited) papers in the management studies [8] and business historical fields [17], [1] that purport to provide evidence of the existence of innovation and technology suppression strategies. It finds that the belief that such strategies have been documented is mistaken in these important empirical cases and that the mistake appears to derive from a widespread misinterpretation of the function of the patent system that assumes that patents can be understood and modelled as economic monopolies. This idea remains persistent in the economics literature, as has been documented recently by Kitch [12]. This paper ends by discussing a plausible case of the suppression of useful technology, albeit suppression that derives from the threat of antitrust action [4]. It concludes that although it remains possible that corporations will fail to exploit patents that they believe would be both profitable and useful if developed, the strategy is likely to be rare. I. A CONTRAST BETWEEN THE REWARD AND PROSPECT VIEWS OF THE PATENT INSTITUTION A simple description of the function of the patent can be found on one of the accessible web-sites of the many national patent offices and would run as follows: intellectual property law is the means society has for creating conditional property rights in several distinct intellectual fields. The most relevant to technological innovation is the patent, granted to an applicant for an invention, for a limited period of time during which the property rights can be bought, sold, or licensed to others to use. In return the applicant deposits a description of the invention with the patent office where it is available for anyone to view. Once the patent – and any extension has expired, anyone can use the described technology without fear of legal infringement action. This might appear simple enough, but there are different assumptions about the role the patent plays in innovation in the academic literature. Kitch makes a nice argument that the prevailing understanding of the function of the patent system among economists, what he refers to as the ‘reward’ theory, must be supplemented by an understanding of the system’s function as a means of managing technological prospects, prospects that are uncertain in both cost of development and potential return [11]. The significance of these distinct views will be developed here at some length, for it is the reward theory, spilling into the managerial and business historical fields, that is largely responsible for the belief that corporations suppress innovation with the aid of patents. It 1 Simple descriptions of intellectual property law can be found on websites run by most country’s patent offices, for example in the UK; http://www.patent.gov.uk/patent/definition.htm has also been the reward theory that has supported the application of US anti-trust law to restrict corporate patent positions in the belief that the monopoly power that these patents represent must be being abused. It is important to elaborate the prospect function of the patent system to enable us to reinterpret the significance of the historical legacy of the many antitrustpatent interface cases in the literature. The ‘reward’ theory assumes that a patent represents an economic monopoly, granted as a reward for past inventive efforts. The usual economic justification for this grant is that a patent should allow an applicant to capture the full returns on the investment made to obtain the invention, these returns being otherwise appropriable by imitators. So the public function of the patent system is to offer a financial reward through a temporary monopoly that in general ‘tends to make the amount of private investment in invention closer to the value of its social product’ [11]. With this view, it then becomes a concern that this very same patent monopoly may damage the social welfare because the owner extracts monopoly rents from the sale of the invention. One’s judgement of the value of the patent system now tends to depend on whether you believe the value of its posited ‘invention incentive’ function is outweighed by the assumed social losses of an increase in monopolistic pricing practices. The many economists that have followed this line of reasoning have tended to have equivocal judgements of the value of the patent system. There are two problems with this view of the patent system: it disregards the prospect function of the patent system and it assumes that the patent confers an economic monopoly as the typical case. These will be discussed in turn below. II. THE PROSPECT FUNCTION OF THE PATENT INSTITUTION This classic economic argument outlined above assumes that the development and cost of the invention is prior to the grant of the patent. Instead, it is common for important patented inventions to require further development, and when they do the value of the patent’s exclusive development right is eroded. The reward view therefore pays no regard to the uncertainty of costs and returns in further development, or the uncertainty over whether there is anything useful to develop – in other words it does not treat the patent as denoting the 2 The longstanding tendency for economists to doubt the value of the patent system has been noted by a diverse range of authors writing on patents, for example by Taylor and Silberston and Basalla and Schiff [22], [1], [21].