TECHNOLOGY ANALYSIS & STRATEGIC MANAGEMENT

EDITOR

Harry Rothman, Noltingham Uniwl"siry Institute fOT Enurprise and InnOf,)(Jlion. Norn'ngham, UK

ASSOClATE EDITORS EUROPB: Kcith DicksoR, Brllntt Uniwniry, Uxbridge. UK

JAPAN: Fumio Kodama, Um'wnity ofTokyo, Tokyo

NORTH AMERlCA: AlBO L. Porter, Georgia Imn'lurt of1tchn%gy,AdanraJ GA, USA

SOUTH EAST AStA AND AUSTRALA$LA:

Jullan Lowe, Uniwrsiry ofBaUarart,AuJtra/ia

BOOK REVIBWS EDITOR

Darren Dalcber, MiddJaa Uniwrsity, UK

INTERNATIONAL EDITORIAL BOARD

John Alle,John Hopkins Uniwrsit$ tfbshingron. De. USA; Daoiele Archibugi, CNR, Rom" lralyj Rimi Barre, COnJtrtJaloi" National iks Am er Milien, Paris. Franc,,' John Bessant, Cranfitld Uniwrsity, UKj Martio Hinks, Imo'rutt for Entlrprise aud [nnO'fXl!ion. Nortingham Uniwnity Business SC~oo/J UK; Klau, Brokhotr, DllO Blisheim Graduale School of Management, Wuslnschafdiche Hochschule /ur Unr.rn.hmensfurrung, UlU,ndar, Germany,. Marraret Brucc, UMIST, UK; Michel Calloo, Eco/e des Minu, Paris, Franc.; Daryl Chubin, Narional Scilne. Foundarion, Wizshingron, DC, USA; Christian Clausen, uchnical Uniwnity ofDenma,*, Lyngby, Demnark; Joseph Coates, Wbshingron, De, USA; Rod Coombs, UM/sr, UK; Mark Dodgson, Uniwrsiry of Quunsland,Ausrralia; Henry Et:z.kowitz, SUNY, Pr.m:has., NY, USA; Jamcs Ftcck,Uniwrsiry ofEdinburgh, UK; Audley Genus, Newcasde Uniwrsiry, UK; Peter Gluon, CardiJf Uniwrsily, UK; Miehel Godet, ConUMJaroin Nalional du Aru el Meri,rs, Paris, Franu; Ken Green, UM/ST, Manchesler, UK; HariolC Grupp, Fraunhof.r ISI, Karlsruhe, Germany; WUliam Halali G.org. WUshingron Uniwnity, W&shin,rron, De. USA; Takeshl Hiromatsu, Research C,mer for Adwnced Sei.nc, and uchnology, 1ökyo, Japan; StatTan jaeoblon, Chalm,rs Uniwrsiry ofTe<hnology, GOleborg, SWltUn; Andrew Jamison, Aa/borg Uniwrsity, Denmark; Roo Johnstoo, Australian C.ntre for /nnovarion and Inr.rnan'onal Competiriwnen, Uniwrsiry ofSydney, NSU7,Ausrralia,' Judhh Jordan, Uniwniry of th. Wisr ofEngiand. Brurol. UK; Date Llttler, UM/Sr; Manch.sur, UK; Tony Marjoram, UNESCO, Paris, Frall"; Ben Martin, SPRU, Uniwniry of Sussu, UK; Deependra Moitrs, /nfosys Technologlu, BangaJort,lndia; Shunsuke Mori, Sci,nce Uniwrsiry ofTokyo, Chiba,Japan; Fujio Niwa, National Inniruu of Sei,nce andüchnology Policy, Tokyo,Japan; Carl PistOriuIJ Uniwnity of furon'a, Prerona, South Africa; Michael Porter, Hart/ard Business School, Cambridge,.MA, USA; Michael Radnor, Nonhwerurn Uniwrsity, USA;Johan Schot, EindhOtJln Uniwrriry ofTtchnoWgy, Eindhown, Tht! Nerherlands,' JaequeUne Senker, SPRU, Uniwrsity of Swsex, Brighron, UK; Rikard Stanldewicz, Ruearch Policy Insn'rure, Uniwrsity of Lund, SWt!d,n; Fred Steward, Brun,1 Uniwn'ty, UK; ViYien Walsh, UM/ST, Manchesur, UK,' David Wield, The Open Uniwrsiry, Milton Keyn,s, UK; Robin WiUiams, UnitJt~iLY of Edinburgh, UK; Leeh W. Zacher, Academy of Entreprentunhip and Management, W&naw, Poland; Max von Zedtwitz, Tsinghua Uniwniry, China

uchnology Analysis & Straugic Managem,nt is an international refereed research journallinking the analysis of seienee and technology with the strategie needs of policy makers and management. The journal present! research on the analysis and assessment of technologies, their potentiaiities and impacts, and the development of methodological cools for the identification and analysis of key scientific and technologieal developmencs. The scope of ehe journal extends from technologieal issues and quesrions at the corporate and organizationaJ level, through the intermediate levels of the firm and stace/national capabilities aod supranational capabilitiesJ as far as issues of ceehnologieal geopolities. Second. Technology Analysis & Straugic Managtmt!nt aims to promote strategic thinking about how seienee and technology can be exploiced industrially.

Editorial eorrespondcnce should be addressed co Professor Harry Rothman, UNIEDab. WiI1iam Lee Buildings, Nortingham Science & Technology Park, Universi[y Boulevard, Nottingharn, NO? 2RQ, UK (Tel: +44(0)115 8467501; Fax: +44(0)115 846 7508); E-mail: tasm@nottingham,ac.uk. Notes for conuibutors are reproduced on the inside back cover of this issue.

Books ror review should be forwarded to the Reviews Edicor, Darren Dalcher, School of Computing Scießee, Middlesex University, Trent-Park, Bramley Raad, Londen NI4 4YZj E-mail: D.Dalcher@mdx.ac.uk

Technology Analysis &: Strategie Managem.ent ISSN 0953-7325 is published quartc:rly (total 4 issues) by Routledge, Taylor & Francis Group ud, 4 Park Square, Milton Park, Abingdon, Oxfordshire OX14 4RN. Annual Subseriprlon price is US $926.

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TECHNOLOGY ANALYSIS & STRATEGIe MANAGEMENT

VOLUME 17 NUMBER I MARCH 2005

SPECIAL ISSUE The Management oC Innovation Revisited: Strategy, Control and Culture Edited by Markus Pohlmann, Christiane Gebhardt & Henry Etzkowitz

PAPERS Markus Pohlmann. Christiane Gebhardt & Henry Etzkowitz. The Development of Innovation Systems and the Art of Innovation Management-Strategy, Control and the Culture of Innovation

Markus Pohlmann. The Evolution of Innovation: Cultural Backgrounds and

the Use of Innovation Models

Christiane Gebhardt. The Impact of Managerial Rationality on the Organizational Paradigm. Role Models in the Management of Innovation

Nick Kratzer. Employment Organization and Innovation-Flexibility and Security in 'Virtualized' Companies

Guido Palazzo. Postnational Constellations of Innovativeness: A Cosmopolitan Approach

Henry Etzkowitz. The Renewal of Venture Capital: Toward a Counter-cyc\ical Model

Mohammed Saad & Girma Zawdie. From Technology TransCer to the Emergence of a Tripie Helix Culture: The Experience of Algeria in Innovation and Technological Capability Development

Magnus Klofsten. New Venture Ideas: An Analysis of their Origin and Early Development

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21

35

55

73

89

105

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TECHNOLOGY ANALYSIS & STRATEGIC MANAGEMENT

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Teehnology Analysis & Strategie Management 1 Routledge1~'~"'~'I<:.rou,l , Vol. 17, No. 1, 1-7, Mareh 2005

The Development of Innovation Systems and the Art of Innovation Management-Strategy, Control and the Culture of Innovation

MARKUS POHLMANN*, CHRISTIANE GEBHARDT** & HENRY ETZKOWITZt

• University 01 Heide/berg, Germany, ••Management Zenlrum SI. Gallen, Switzerland, 'Slate Universiry 01

New York. USA

ABSTRACT The success ofstrategies ofchanging or establishing innovation systems is indicated by scientific and techno[ogica[ innovations, the number ofnew products and patents, the prosperity of regions and firms and the creation of new jobs, However, there is also a [ess visible outcome of the innovation process in regard to knowledge creation, redesign of cu[tura[ software of what is understood as innovation anti in new management concepts to maintain and generate organizational innovativeness, The papers in this issue contribute to the identification of b[ockages to innovation and means of overcoming them related to the [atter issue, The first blockage to innovation is the human capital dilemma of insufficient trained persons in innovation management; a second is the paucity of effective organizationa[ mechanisms to realize the full potential of innovations that have been achieved in one environment to transfer them to where they are needed in another. The capacity 10 integrate innovation mechanisms and carry out techno[ogical and organizationa[ transfer is the issue here, With a focus on the less invisible indicators of innovation a new understanding of the management of innovation is possible.

Introduction

Organizational innovation, a culture of entrepreneurship and the ability to reconceptualize ideas in the light of local circumstances, is required. There is no longer a credible grand schema to aspire to replicate, whether laissez faire capitalism or socialism. Traditional development models that presumed either that govemment could direct the other spheres or that institutional spheres could operate in isolation have been superseded, , •. There are various strategies to draw upon to enhance development such as venture capital (USA), basic education (Korea), networked research (Europe), and networked incubators (Brazil).

Correspondence Address.· Professor Markus Pohlmann. Department of Sociology, University of Heidelberg, Sandgasse 9. 69047 Heidelberg. Germany, Email: markus.pohlmann@l-online.de

0953-7325 Print/l465-3990 Online/05/010001-07 © 2005 Taylor & Francis Group LId 001: 10,1080/09537320500044206

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2 M. Pohlmann et al.

Several developments have coincided to infiuence the innovation process including:

(I) The emergence, spread and convergence of technological and communications para­digms such as the computer, mobile telephony and the Internet;

(2) The interconnection between the laboratory and users of research; and (3) The transition from vertical to lateral modes of coordination, represented by the emer­

gence of networks, on the one hand, and the sluioking of bureaucratic layers, on the other.

Organizational and technological change have inspired each other in ways that we are only beginning to comprehend. Dur remit in this special issue is to provide a methodology and a set of guidelines to lighten the black box of innovation, make transparent its frames and mies in order to hamess it to meet pressing societal needs.

The EndIess Transition

We are moving from the era of the Endless Frontier to the era of the Endless Transition, from an assumption that science translates into use as an autonomous process to the realization that the linear model worles, but not by itself. Innovation in innovation is a guided evolutionary process based on experimentation, judgement and selection of what works and does not work. Three processes of change are underway in innovation, technology and institutions. The first transition is in the relationship among basic research, applied research and product development. The three heretofore relatively distinct phases are moving together. There will no longer be such strict boundaries among them. Instead, they will blend into each other and move back and forth, without strict separation.

The second transition is between different technological areas. They had been thought of as being connected to different disciplines and different industries but they are now are cross-fertilizing each other. Previously there were strong boundaries between individual disciplines. More recently interdisciplinary collaboration has expanded and new disci­plines have been created at the intersections between old ones. Biochemistry is an early example. Moreover, new interdisciplinary synthetic disciplines have been created such as bio-informatics.

The third transition is toward the networking relationship of university, industry and govemment relations. There is a new balance between structural integration and functional differentiation in which university, industry and govemment are relatively autonomous but overlapping, with each taking the role of the other. The university takes the role of industry by helping form new firms in incubator facilities. Government takes the role of industry in providing venture capital to help start new firrns. Industry takes the role of the university in developing training and research, often at the same high level as universities. The phenom­enon is addressed in the tripie helix model,l which helps to understand that there is an endless transition of innovation, rather than a journey to an assumed ideal model.

The Culture oe Innovation

So taking a c10ser look at innovation strategies and their results it becomes dear that inno­vation itself remains unpredictable, non calculable, indistinct and fuzzy. One major reason

Strategy, Contro/ and the CU/lUre of Innovation 3

for the blackness of the innovation box sterns from the diversity of players with different intentions contributing during the innovation process. It goes without saying that the diverse interests, which are often juxtaposed and not free of confiict must necessarily result in unintended consequences coming alongside the predicted outcomes or even pre­venting them. Despite all programs of innovation strategic investors tell us franldy that there are no general rules on how to induce and organize sustainable innovativeness. 2

Yet, although the results of the innovation process are sometimes arbitrary the process itself is rather stable and seems to follow traditionallines.

Processing innovation implies rules of co-operation and social behaviour of a specific cultural setting. Underlying the process is a mechanism of interchange or in other words a model of social rules. Social rules of interplay however, can be observed and ana­lysed and understood as development and reproduction of co-operation structures, Le. the reproduction of a social system. As a consequence, innovation systems must be looked at as development of social systems, which are more or less successful in the achievement of their strategy.

Looking at innovation in this way bears a great analytical advantage. We detect all traditional traces of programming and strategy like the everlasting focus on technology rather than on organizational innovation, the cultural intertwining of thematic, labour and spatial concepts as weil as the distinct cultural patterns of altemating top-down and bottom-up elements in the process of strategy formation and implementation. Apply­ing this perspective we find that social systems successfully transport blind spots that cause recurrent failures in S&T policies and R&D programs-blind spots that otherwise go unnoticed. This is a good approach to show why, despite their lack of success 'blueprints for innovation' live on and even will get more refined and complex to take care of all eventualities. Looking at the innovation system as a social system rnight bring back simplicity to innovation studies and leeway for new fields to discover in inno­vation strategies.

Following this, the development of innovation systems depends on a complex set of rules and frames. It is an evolutionary process with an unpredictable future. No single actor can be in control of these rules and frames. As a matter of fact, innovation is not a question of an organization and cannot be organized permanently. Innovation manage­ment is more about managerial belief systems,3 which are acknowledged by other actors. If people believe in the chosen rules and tools of the management, these rules and tools become real in their effects.

In strategic alliances aiming at innovation as weil as in networking structures individ­uals in organizations will try to carry out their own innovation strategy following their own mies and irnply specific tools they believe in. As a consequence, belief systems differ to a great extent. For instance, the belief systems of venture capitalists and their rationality will be rather different from the rationality of the inve.ntor firms. 4 When brought together they .. will produce sub-optimal results for both worlds. This confiict is an unintended conse- ' quence of the operation system and of the interplay structure. In our case the inventors have not received the investment capital when they needed it most-a general problem of shareholder backed investment.

Venture capitalists fail because of their narrow focus on 'hot spots' and the slow return on investment, they moved in for. In this context, it has to be discussed whether the state can be a strategic investor or not. In any case it will complicate the proceedings and slow the process or speed it and make it possible, depending upon the circumstances and how

I I "I "i f ..:.

5 4 M. Pohlmann et al.

the intervention is organized. In Algeria, for instance, state intervention did not really help to start a successful university-company interaction, a so called tripie helix relation· ship.s We have to realize, that the state is just another actor adding a different perspective to the innovation system, i.e. an additional source of uncertainty for the other actors involved. Triple-helix interaction, it appears, is often loaded with uncertainty and intransparency. Participating actors must possess the capability to cope with these factors.

It remains to be seen whether innovation systems can capitalize more on post-national consteIlation and cosmopolitan subjects.6 We need to keep in mind that extending the innovation system results in unintended interaction, which however will ask for adequate capabilities to cope with complexity. Palazz07 analyses cases of spontaneous co-operation that worked out weil according to the strategy-such as the globalization movement or the global reaction to SARS. Both of them are organizational rather than technological inno­vations. Tbe preliminaries of global acting of innovative firms are human resources capable of global interaction and coherent action. Therefore firms need to instali employ­ment systems to recruit and manage personnel capable of dealing with the developments of a global innovation system. Tbe contribution of Kratzer in this volume is an otherwise often neglected aspect in innovation studies.8

Still, there is no guarantee that business ideas can be transformed by social systems into successful innovations. Very often, the social context of the system leads to amisfit: start ups invent new products but lack the management knowledge to market innovative pro­ducts. Marketing and consulting firms, however, invent IT-based tools and services but do have problems to market technology-based products at the end of the innovation process. Generally, tbey come in too late to be successful if they come in at aIl. This misfit contributes to the failure of a lot of exceIlent business ideas.9

Hence, if we want to know something about the operation system, we need to analyse the interplay of the actors of the system. We need to keep in mind that these players are defined by the system itself. Tbe management of innovation is neither merely about tbe invention of technical artefacts nor merely about the single perspectives of industrial enterprises and other players in the social system. It is rather about tbe mechanism of sodal innovation systems and the organization of the interplay of actors contributing during the process to meet the strategic goals.

It is culture that defines tbe elements and parts and has an impact on the processes. To analyse cultural patterns of innovation systems at work we will need analytical guidelines. These guiding questions are as folIows:

I. How does the reasoning and sense making of innovations take place? 2. What is the process from the individual idea to the system? How do innovation systems

develop? 3. Who is contributing to the development at what stage of the process? Can the result of

the innovation process be predicted?

Reasoning and Sense-Making of Innovations

Discussing innovation, we imply sense-making systems. The sense making is a precondi­tion of the making of new products, services or process innovations. Taking innovation

Strategy, Control and the Culture of Innovation

systems as sodal systems, we enter the field of the 'social making' of innovations. It is determined by culture in the way that

• affective frames of identity and difference, • cognitive frames of knowledge, • normative sets of values, norms and beliefs,

define the socially accepted space for action. Culture is defined by a heritage of who we are, what we know and what we believe

we should do. Thus structure and development of innovation systems depend on the 'cultural software' of a thematic and spatial concept and the political framework. Saad and zawdie lO state in their contribution, that the transfer of technology between educational and research institutions and Algerian enterprises is held back which they argue is partly due to the centralism of Algerian polity and policy making. Interestingly, the very thought of expecting governmental institutions to enable enterprises to manage the use of new tecbnologies gives way to the Algerian cultural tradition: The affective frame indicates a strong emphasis on the role of the state within the innovation system.

Innovation systems in the Anglo-American tradition countries will be different in this point as Etzkowitz's model of 'counter cyclical venture capitaI' shows clearly.11 The cognitive frame, Le. that the state is accepted to be an expert and is believed to stand a fair chance to succeed demonstrates another part of the cultural software. Last but not least, the normative frame, that the state should interfere and take an active role in the process completes the picture of the cultural software in defining the interplay of state and business in the Algerian innovation system.

These frames are collectively reproduced, not individually. According Weick's theory on organizational sense making we consider innovation as dependent on collective structures. 12 By collective structures, we talk about the social context, which enables actors to a specific form of rationality and at the same time constrains their actions by the interdependency involved.

Tbe cultural software defining the innovation system varies on different levels. On the surface of communication there is a 'coining' of reflexive and explicit concepts. This is the level, where new innovation models appear and are dealt with. It is the highly visible and thematic level, where international waves and fashions manifest (like 'The Balanced Score Card' or 'Business Reengineering' or 'CIM' and other approaches).

However, in the background we do have more implicit subframes ofknowledge creation that are collective expressions of integration mode of new innovation models into aiready existing frames and cognitive maps. On this level, the frames are only partly thematic, <

visible and reflexive. On a third level, the underground level of communication, natural unquestioned

attitudes and values come into play. It is the tacit, invisible level of the stabilization of innovation models; the level of trust. Palazzo I3 shows how organization of transnational movements are anchored on the first level, where highly innovative forms can be devel­oped. Their success depends on a low level of organization, leaving the backgrounds and undergrounds of culture untouched.

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6 M. Pohlmann et al.

From the Idea to the System-How do Innovation Systems Develop?

The business idea or the invention is a moving target. It changes several times, before it becomes an innovation, which not only is due to adaptation and adjustment to the external environment but also a question of frames, habits and the cognitive maps of the players in the innovation system. A 'cognitive map' is a generalized, reversible pattern of how to make order out of new experiences. Thus, cognitive maps determine the borders of the sense-making system. On the other side they also define the opportunity structure for new ideas. They are reproduced collectively inside the innovation system.

Interestingly, we cannot decide what cognitive maps we use as parts of them are sub­conscious. They take the notion of 'sunken' frames that are used automatically, especially when dealing with new situations. They become constituted in the socialization process and reflect our experiences with social and physical environments. As soon as they are implicitly (or explicitly) acknowledged by others they become a stable pattern of orien­tation. Collective maps are collective knowledge as weil as individual enacted. Gebhardt14

shows that managers although they see different innovative challenges ahead tend to choose similar ways of fostering innovation in their firm because their frames of managing innovation are collectively reproduced. There are accepted ways to organize and market innovation, which are difficult to change.

Klofsten's case study15 shows that all newly founded firms in Sweden start out with having ideas about products or services to seil. None of the managers considered new mar­keting channels or new organizational forms a starting point for a firm. As a rule business start ups read innovation as new products or services and all of them struggle hard to bring their products and services to the market.

Klofsten l6 identified stable pattern of orientation, organized in cognitive maps, which gave direction to the first steps of evolution of the innovation system. Although relatively ineffective, the process of developing the innovation system remained unquestioned. Nevertheless, the actors were weil aware of a blockage to innovation and developed a local organization to discuss common problems, led by an interface manager between academia and industry.

Can the Innovation Process be ControIIed?

It is a fact that no single manager can control all elements of an innovation system. Neither can a single business incubator or venture capitalist define aII properties, an innovation system will have. Nobody holds the monopoly of what makes sense and what does not. Naturally, all actors participating in the innovation system, are trying to plan and control the system according to their own agenda. The firm gathers the human resources and the capital to achieve new technologies, but will soon realize that seed money and manpower are unsteady and foIIow rules of the employment and the stock market-which are beyond control of a single firm. Etzkowitz 17 shows that because of risk overload of their portfolios venture capital firms more and more tend to enter at a later stage of the innovation process, losing their former role as strategic investors Federal and state governments-the remain­ing true strategic investors-still pick losers and winners although assessment and control systems coming with the funding are getting more and more elaborated.

Although all these institutions trust in their return on investments the control of a system is merely a fiction to keep the system going. Interestingly, the control in a system of mutual interdependence increases the uncontroIIability, i.e. the indefiniteness of the system.

Strategy, Control and the Culture 0/ Innovation 7

The art of innovation management is therefore the art of coping with indefinite system properties-{)f producing certainty and rituals in coping with uncertainties. 18

Resuming, the innovation system is constituted by elements, which are defined and controIIed by the innovation system itself. Interdependency and interchanges between universities, govemments and industries are constituting the elements of the sense making of the system, the belief systems involved and the limits and opportunity structures that are commonly established. Roles corporate actors play inside the innovation system derive from their interplay structure and their interdependencies. Observing innovation systems as operation systems is a sea change turning conventional wisdom upside down: The interplay structures are not a function of the roles, the actors play, but roles are a function of the interplay structures.

Strategies of changing or establishing innovation systems must be aware that focussing on the right actors only will not lead to success, if the interplay structures are not involved. In many regions with weak interplay structures, the strategies of attracting high-tech firms with subsidies and state benefits has not changed anything, even if they were successful in bringing new firms into the region. The art of innovation management is the art of chan­ging the rules of a system. It is an art that no single artist can perform. It is an art of communication, co-operation and 'playing the system'. It does not need harmony and consensus, but reflexivity and frames for the 'self-organization' of networks. It is a collec­tive art of changing the rules by playing the system.

Notes and References

1. See M. Sand and G. Zawdie, From technology transfer to the emergence cf a tripie helix culture: the experience cf Algeria in innovation and technological capability development, Technology Analysis & Strategie Management. 17(1),2005, pp. 89-103.

2. See M. Pohlmann. The evolution cf innovation: cultural backgrounds and the use of innovation models, Teehnology Analysis & Strategie Management, 17(1),2005, pp. 9-19.

3. See C. Gebhardt, Thc impact of managerial rationality in the organizational paradigm. Role models in the management of innovation, Teehnology Analysis & Strategie Management, 17( 1), 2005, pp. 21-34.

4. See H. Etzkowilz, The renewal of venture capital: toward a counter-cyclical model, Teehnology Analysis & Strategie Management, 17(1),2005, pp. 73-87.

5. See Saad and Zawdie. op. eil., Ref. l. 6. See G. Palazzo, Postnational constellations cf innovativeness: a cosmopolitan approach. Teehnology

Analysis & Strategie Management, 17(1),2005, pp. 55-72. 7. lbid. 8. N. Kratzer, Employment organization and innovation-flex.ibility and security in 'virtualized' compa­

nies, Teehnology Analysis & Strategie Management, 17(1).2005, pp. 35-53. 9. For the Swedish case study, see M. Klafsten. New venture ideas: an analysis af their origin and earIy

development, Teehnology Analysis & Strategie Management, 17(1),2005, pp. 105-119. 10. Saad and zawdie, op. eit., Ref. I. 1I. Etzkowitz,op. eil., Ref. 4. 12. K.E. Weick, Der Prozeß des Organisierens (Frankfurt, Suhrkamp, 1985) 13. Palazzo, op. eil., Ref. 6. 14. Gebhardt, op. cil., Ref. 3. 15. Klofsten, op. eit., Ref. 9. 16. Klofsten, ibid. 17. Etzkowitz, op. eit., Ref. 4. 18. See the discussian of Gebhardt, op. eit., Ref. ].

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Teehnology Analysis & Strategie Management 1 Routledge~T~lot"F~GIoup1

t Vol. 17, No. 1, 9-19, Mareh 2005

The Evolution of Innovation: Cultural Backgrounds and the Use of Innovation Models

MARKUS POHLMANN

University ofHeidelberg, Germany

ABSTRACT Innovation is said to be one of the most important lactars in economic competition. Regions and firms are striving for the establishment of innovative structures. However, the question of how to organize permanent or sustainable innovativeness is not easily answered. Suggesting slx rules of innovation, the first rule is, that there is no general rule of how to organize sustainable innovativeness. Anyway, we da know much about innovation killers and ahout how organizations deal with innovations and we da know that innovations da not happen merely by chance. There are regional paths of innovations, innovation paradigms and long waves of innovation models. For Europe, especially for Germany, the adaptation of 'innovation models' has been very important for the evolution of new institurional and organizarional forms, but we can identify striking cultural differences. In Asia, the adaption of the same innovation models did lead to different forms of innovation management with considerably different outcomes. The article concludes that transferring implicates transforming in a culturally path-dependent way.

Introduction

Innovation is said to be one of the most important factors in economic competition. There­fore, regions and firms are striving for the establishment of innovative structures.. However, the question of how to organize permanent or sustainable innovativeness is not easily answered. Heading towards seminal answers to tbis question, actors are looking for success stories that unveil the tme reasons of innovativeness. Japan and the USA, as pacemakers, have been discussed as weil as Silicon Valley or the Greater Boston Area as regional role models for innovation. However, the transfer of these success stories to a different national context usually fails. Conversely, lacking their • institutional embedding, these role models tumed out to be innovation traps rather than boosting innovative developments.

Correspondence Address: Professor Markus Pohlmann, Department of Sociology, Ruprecht-Karls-University of Heidelberg, Sandga"e 9, 69117 Heidelberg, Gem1any. Email: markus.pohlmann@l-online.de

0953-7325 Print/1465-3990 Online/05/010009-11 © 2005 Taylor & Frands Group LId DOI: 10.1080/09537320500044396

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The Six Rules of Innovation

While recent findings in the sociology of technology provide a rich empirical pool regarding the dynamics of technological development and its embedding in society, 1 we do not know much about the rules regarding the definition and use of rules made by social systems. These rules fonn the frames and borders that influence the technological invention. Drawing from the immensity of literature in innovation studies and linking it to studies in management we state six general rules concerning the question of innovativeness of social systems.

First Rule: There is no General Rule, How to Organize Sustainable Innovativeness

In our perspective, the question of innovation is not the pursuit of the appropriate prescrip­tion. We do not assurne that there is (or ever can be) 'one best way' or approach towards innovation? In fact, there is no known factor that has not been said to foster innovation. Interestingly, there is no known factor either that has not been considered as an innovation inhibitor. Research on innovation is impressive and it shows clearly that there is no general rule of what mix of factors may lead to innovation.

First of all, innovation is a product of the evolution of social systems. The evolution is not directed and cannot be steered from one actor or one agency inside or outside the social system. Thus, innovation is not a question of a rational intervention by dominant actors. Because it is not likely to be achieved directly,3 the research focus has to be on the social contexts of innovations.4

There is no innovation without a preceding social validation. The road towards inno­vation leads through the jungle of social attributions. Innovation is a distinction drawn in communications. Notably, this distinction is drawn in retrospect. To distinguish what is new (i.e. unknown), we must rely on adefinition of what is old (i.e. known). Using the word 'innovation' we imply a preceding social evaluation filtering whether it will fit regarding the expectations of the environment. Innovations are defined by sense making systems such as organizations, regions, nations, providing the background for the distinc­tion of known or unknown, of relevant or irrelevant, of understandable or not. There is always an 'effet societal'5 on innovation. Concerned with the models of technological development, most of the authors stress more and more on the social forces in the shaping of technological innovations.6

Second Rule: Although We do not Know About Innovation Factors, We do Know Something About 'Innovation Killers'

Because innovation can be regarded as a 'transrnutation' that can happen in every environ­ment, we will always have problems in stating general rules about innovativeness. Yet, according to the research on innovation, it seems to be easier to identify context factors that inhibit or block the establishment of innovative structures.

(I) We know that innovations need time, effor! andJor money. We also keep in mind that time, effor! and money are in no way guarantees for the evolution of innovation. A lack of these factors however, seems to be an undeniable barrier to innovation?

The Evolution o[ Innovation II

(2) We know that innovation is not a question of isolated work in a socially disembedded work atmosphere, but of co-operation and organization in a socially well-embedded environment.8 Very often, it is the new combination of the known, which is at the core of innovation. That is the Schumpeterian argument.9

(3) There is ample evidence that planned and Tayloristic organizations, determined work or a tight coupling of networks are not very likely to achieve an innovative develop­ment resulting in new procedures and products. These, at least, have been the early findings of the organization theory.1O

(4) The more incentives are set for innovative behaviour, the more de-motivating will be their effects. As Sprenger has shown, too many incentives lead to an incentive­reaching, bureaucratic behaviour and are more likely to destroy than to create an innovative milieu. 11

(5) The social reproduction of the elites that manage innovations can lead to a conserva­tive milieu. As Pareto has shown, elite reproduction can be an innovation killer. 12

Third Rule: Organizations Deal with Innovations in a Paradoxical Way

Talking about organizations as a social context of innovation, the organization sociology has brought forward a conceptual frame regarding the social creation and evaluation of innovation in organizations. One of its sound results was that organizations deal with innovations in a paradoxical way.13

Facing innovations, social systems need to be very selective, in order to keep the system runDing and assign resources adequately. Social systems are confronted with pennanent changes. Because they cannot innovate all at once, the question of innovation is one of the right place and the right time. Innovations are not only chances for change, but also threats to the functioning of a socia! system. The paradox of innovation is that every social system tries to avoid innovation while it is in fact in need of it. 14

Innovations that are too strange for the sense-making system of organizations do have less chance of being validated and realized as innovations. 15 This is the second innovation paradox-need to be unveiled. Organizations and other social systems prefer innovations that are 'confonn-non-confonn'. They have to be understandable and usable according to old rules but rule breaking at the same time.

There are many rationalized fictions in use, which keep the social system running. 16

Every change not only disturbs the stability gained through rationalized fictions, but also is a disturbance for the social setting of power- and trust-relations of the employees. That is why resistance to change is always as high in organizations as the reluctance to acknowledge path-breaking innovations. 17

Fourth RuJe: Innovations do not Happen by Chance. The Emergence of Innovations is Dependent on Regional and Organizational Paths or Innovation

As the concept of 'cultural software' implies, the emergence of innovations happens not merely by chance, but is dependent on regional and organizational paths of innovation. If we do not take innovations as incremental but revolutionary changes and keep the geogra­phy for basic innovations in mind, we need to admit that not every world region might have the same chance to develop innovative structures. 18 We realize that there is a conti­nental drift in innovation density throughout the centuries. 19 Drawing from research in this

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field, we assurne two crucial facts regarding the path of innovation: innovations are depen­dent on preconditions that are not easy to arrive at. Some of these preconditions are insti­tutionalized (such as regulation modes and qualification structures, industrial setting and technologieal trajectories). Some of them need time to develop (e.g. qualifications) and others are not easy to be produced, copied or bought (such as intangible capital, tacit knowledge). Innovations are resource-dependent and based on the development of social systems. 20 This explains why we do have regional and organizational paths of inno­vations. On account of these preconditions, organization and regions cannot easily embark on a path of innovation. Further, it is difficult to change or swap a path of innovation. According to the work of BraudeI on the history of the world economy it would take up to 150 years for regions to profit from emerging innovative or low-cost structures in that way so as to move into the centre of the world economy.2\

Some regions faiJ constantly in embarking on a path of innovation. According to our own studies, the 'cultural software' is decisive for the development of particular paths of innovation. Comparing 'cultural softwares' in our earlier work, we can state on a broad scale that, for instance, in South Korea innovation was mainly about 'realizing growth'. Comparing it to Mainland China and Taiwan, we found that innovation there was more a matter of 'making money in business networks,.22 Analysing the innovation culture in Germany, we found that innovation was still mostly about 'making three­dimensional artefacIs' .23 Elaborating on the innovation culture of the USA, innovation seemed to be about 'making money in markets'.

Comparing the USA and Germany, the cliehe concerning the USA also stresses a short­term orientation that is certainly prevalent in the USA especially in large corporations and the long duration of the assisted linear model. One of the more recent developments was that every business unit or value step got measured by a shareholder value approach of an investor-driven production mode adopting the rhythm of quarterly results for the stock exchange.24 Increasing merger and acquisition activities started off in the USA and US­based firms were first in outsourcing labour intense production parts to low-wage countries. As an important side effect, decision making in firms becarne more and more the domain of managers with a strong background in finance and sales, which seemed unthinkable in a German context where a technical and legal background was considered appropriale for getting promoted to top management positions.

After the short euphoria regarding Japanese production models the most striking feature concerning the American (US) way of innovation is tbe absence of a succeeding role model. The import of ideas stemming from other national innovation modes came to a halt and cannot be expected to revive in times of heavy investment into science and tech­nology by means of the defence budget. During the last few years the USA has become more and more occupied with itself, perpetuating ilS own mode of innovation. As a con­sequence, it has had to face self-induced 'bubble innovations' and the risk of running into an 'self-reliance trap of innovation' where a too high degree of self-reliance becomes a barrier for innovative behaviour.

In the German innovation mode different concepts stemming from different national contexts became dominant features of the innovation mode. Asian-born concepts were Kanban and total quality management in the mature automotive industry, as well as process optimization. All of these concepts were related to the production mode and became part of the managerial tool kit that trickled in from the USA. In Germany, the crisis of tbe new economy and the fading of 'lean production' has led to a rising distrust

The Evolution of Innovation 13

of new role models. The 'model-shopping' became more deliberative and eclectic. The rising contingency of so-called US-American best ways led into a 'complexity-trap of innovation' that might eventually spin off a debate on a European way.

There are still two different frarnes of interpretation at work concerning innovation, namc;ly that of a rather short-term oriented, financial-institution controlled and market­driven understanding of innovation in the USA contrasting with an rather producer­driven, state-controlled and long-term oriented understanding in Germany.

These different patterns are pointed outto illustrate at a first glance, how 'cultural soft­ware' has a formative influence on the respective way of understanding innovation in different regions and organizations. The concept of 'cultural software' also sheds light on the nature of innovation blockages and mighttell us a great deal aboutthe 'social chem­istry' that they are made of. Not only does this approach towards innovation imply the specification of 'taken-for-granted' assumptions, 'natural attitudes' and 'self-fulfilling prophecies' that are resistant to falsification, it also sheds light on 'structural lock-ins' that characterize the transformation of 'cultural software' into institutional forms or 'cultural hardware'.

Fifth Rule: Innovations are Anchored in Paradigrns of Interpretations. They Change Subsequent to Changes within Societies

Innovation is anchored in paradigms of interpretations. These paradigms are not merely individual perspectives but social facts in a Durkheimian sense. They change subsequent to changes within societies. Concentrating on innovation models of organizations and nel­works, the last century saw25 at least three waves that cbanged the models of organization and innovation at work (in the USA, UK, Germany and Spain). These waves are well known. The first wave was that of 'Scientific Management', the second that of 'Human Relations' and the third wave that of what Guillen called, 'Structural Analysis' or the 'Contingency Approach' .26 The third wave was about the organization of an optimal fit between the environment, the technology and the organizational structure. Each inno­vation was judged by the influence it bad on that fit. This was the central question in con­tingency theory.27 This paradigm had its flowering in the 1960s and 1970s. All these paradigms have not vanished, but are still in existence and become combined in many different ways. Two broadly discussed concepts that combine all three paradigms have been thaI of 'lean management' and 'total quality management'. However, since the late 1970s there is strong evidence that a new paradigm has been evolving, which is shaping the social construction of innovation models. In the following we will address this phenomenon by using the term 'fourth paradigrn' .

The contours of this new paradigm are currently becoming more and more prominent. We keep in mind that the paradigm defines what is perceived as innovation. The current organizational model of management establishes the frame, Le. the conceptual scheme' underlying the innovation model. It is that of global networking. The global network per­spective is evolving as a systematic new order working as a mode of interpretation that deterrnines what is considered rational, relevant and new. It integrates a bundle of assump­tions and principles, which sharply differ from the former perspective of the contingency approach.28

In the context of the fourth paradigm the perceived problem is no longer thaI of an optimal fit between environment and organization, but of a recombination of different

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modes of regulation. At the centre of the paradigm stands the organizational integration in a more and more globally perceived environment. The recombination of market-shaped, network-oriented or organizational economic governance structures is the central problem ofthis paradigm. The basic principle is not merely a restructuring of organization, but the 'disorganization' of organization.29What we do observe these days is the introduc­tion of a theory of relativity concerning different forms of institutions and regulations, where not the organizational Structure, but the organization itself becomes contingent. To use hierarchies as a mode of regulation is no longer the predominant perspective inside organizations. Not only do markets, hierarchies and networks exist in the environ­ment, but also they are to be found within the single organization. Economic success is understood as depending on an appropriate match of global and internal structure. Whether or not they can cope with the challenge of that match in a global environment is how innovation models are measured today. Following this, the attention is no longer only on organizational restructuring but on markets, networks and organizational relations in a comparative perspective. These are the cornerstones of the analysis.

Interestingly, the general fonn of solution is that there exists no general solution at all. Compared to the structural analysis paradigm, the difference is striking. The new paradigm does not aim at identifying one best way but relies on the assumption that there are many equivalent good ways despite the unity of the global environment. What is believed to be a good and equivalent way also depends on cultural factors. Generally, the environment is no longer regarded as an ontological entity, but as enacted by the organization or differing regulation forms. The organization seems to be loosely coupled to the environment.

On the background of the fourth wave, we can clearly identify two innovation models that claim to solve the problems of recombination and to lead to innovative structures of organizations and regions.

The fourth wave is rooted in a perception of modern societies that stresses the changes in the mode of societal association and modemization. Some authors such as Lash and Urry coined this perception as 'The end of organized capitalism'.30 Behind these far-fetched catchphrases, we see some features of these changes that helped the fourth wave to take off. Concerning the modernization of organization, we concentrate on the two essential features:

(I) The classic way of modemizing organizations became 'reflexive'. Modemization is no longer an instrument against magic and mystic traditions, but is applied to already modern structures.

(2) Reflexive modernization concentrates much more on loosening than on tightening organizational forms. The classic modern rational form of organization has been the consequence of thinking in instrumental metaphors and machine models. Strong hierarchies, stiff organizational forms, a high division of labour and organizational change by rational planning of experts has been the result.

Thus, the disorganization of organizations became one of the central innovation models of the fourth paradigm31 The 'disorganization' was fostered from below-from the changes in social structure-as weil as from above, from the globalization of the economy. These challenges of 'disorganization' from above and below have been answered by a modern form of project organization.32 Projects are a central part of the innovation model of 'disorganization'. They are supposed to be an answer for the crisis of hierarchies,

The Evolution 01 Innovation 15

because they introduce a decentralized network form to the classic organization.J3 Project organization is not only an organization of mainly self-controlled and self-operating small units, but makes also a sharp difference in relating the system to its environment. Projects are breaking boundaries and building bridges in a very different manner compared to the typical hierarchical organization. Furthermore, projects have an affinity to the life fonns of new middle classes. They also serve the new organizational requirements with regards to professional and entrepreneurial thinking. Project-driven structures are to be found in various industries. The public sector equally started to organize innovation in the form of projects introduced by the finalization of programs in science and technology and the formation of joint project teams as a substructure of these programs.

Project organization is thus a prototype for a decentralized network organization that answers both, the new challenges of flexibility and integration. It is a dissolution of clas­sical fonns as weil as aresolution of contradictory requirements of the modemization process. It is at the core of the innovation model of 'disorganization'.

The second innovation model of central importance is the regional innovation system. The hypothesis of this model is that the 'social space' of a region34 can form an innovative milieu, which spurs the emergence of innovative structures. The innovation model of 'regional innovation systems' claims that the density of integration of various institutions in a region and the strength of identification within that region are the prerequisites for fonning an innovative region. In the reasoning of the fourth paradigm, the global economy itself enforces regional differences. Regional differences again form the internal structure of the global economy. According to the work performed on 'comparative insti­tutional advantages' ,35 the characteristics of global capitalism are not only defined by the fast distribution of new technologies, but also by the reactions to it: an enforced regional segregation of the economic system.36 Globalization and regionalization are two sides of the same coin making it necessary to direct our research towards regional innovation systems in order to learn about innovation models. Notably, we do not take it for granted that the region is an innovative milieu, but employ so called innovative regions as an analytical concept. Therefore we analyse whether the social space of a region indeed fosters the establishment of innovative structures.

Sixth Rule: There are Long Waves of Innovation Models. Cultural Hegemonies in Defining the Interpretative Standards of Innovation are Moving in Mid·Term Periods

As the research on long waves in the Schumpeterian or Kontradieff tradition have shown, the emergence of basic innovations is also a question of cycles,37 as is the emergence of innovation models. The global paradigms of innovation are changing in mid-term periods. Thus, long waves of innovation models can be identified.38 Together with these mid-tenn , changes cultural hegemonies in defining interpretative standards are also changing. Th{' cultural hegemony of the USA as a role model for innovative finns as weil as innovative regions was therefore predicted as vanishing in the 21 st century.39 The absence of new role models and the high degree of self occupation appear to be a symptom of decline, but it is an open question as to if and when the USA is loosing its cultural hegemony and its role as a seedbed for new innovation models.

Resuming our own work,·o we find that the USA is still employing the role models used in the 1960s, which stressed the unleashed entrepreneurship of individuals or single

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16 M. Pohlmann

organizations, while in the German conlext, innovation is something lhal can and even must be designed. 11 appears Ihat lhe adoption of features from lhe US-American conlext, their adaptation and recombination as weH as the appropriate implementation, belongs to a German belief syslem Ihal is somewhat shattered, Yel, it seems lhal lhere is no equally strong replacement for Ihe cultural hegemony of lhe USA.

The importance of the USA in providing lhese innovation models cannot be under­estimated. Since the beginning of the lasl century lhe USA has become one of the main driving forces in lhe world economy as weil as a leading pacemaker for economic inno­vation, Mosl of the predominant ideas relaled 10 innovation in 'good old Europe' have since then been coined in the USA. Even lhe extensive debate on Japanese innovation melhods trickJed in from USA. Generally, the USA has acquired a strong reputation as one of lhe modem 'seedbed' societies41 for innovation models.

For Europe, especially for Germany, lhe adaplation of 'innovation models' has been very important for lhe evolution of new instilutional and organizational forms. Since lhe late industrialization of the USA, organizational and institutional forms of US­American industry have become shining examples for German initiators of innovation, but out of the seedbed were growing many different planls and f10wers because innovation models are closely linked to lhe production mode of lhe national innovation system. Bolh are constrained as weil as enabled by the respective institutional and political framework and last, bul not leasl, by the respective cultural adaptation, Adaptation produces a quality of ils own, In facI, il has not led 10 a convergence of modem structures as Parson' s Iheory suggested.42 Innovation models and innovation structures take different shapes in different cultures, Transferringimplicales transforming,

Notes and References

1. See A. Rip and J. W. Schot, Anticipating on cOßtextualization-loci for influencing the dynamics of technologieal development, in: D. Saucr and C. Lang (Eds) Paradoxien der Innovation. Perspektiven sozia/wissenschaftlicher Innovarionsjorschung (Frankfurt-am-Main, Campus, 1999), pp. 129-146.

2. See for 'oße best way' as a very weil sold illusion, for example, P. Senge. The Fifth Discipline (New York, Doubleday, 1990); R. Benh, Aufbruch zur Überlegenheit (Düsseldorf, Eccon, 1994); P. Drucker, The discipline of innovation, Harvard Business Review, 76(6), 1998. pp. 149-157; G. C. O'Connor and M. Riee, Opportunity recognition and breakthrough innovations in targe established finns, eali/omia Management Review, 43(2), 200 I. pp. 95-116; A. Gawner and M. A. Cusumano, Plat­form Leadership: How Intel, Microsoft, and Cisco Drive Industry Innovation (Boston, MA, HBS Press, 2002); in critical perspective 1. MickJethwait and A. Wooldridge, Die Gesundbeter. Was die Rezepte der Untemehmensberater wirklich nützen (Hamburg, Hoffmann und Campe, 1998).

3. 1. Elster, Subversion der Rationalität (Frankfurt-am~Main, Campus, 1987), p. 153. Innovation can be merely considered as a side product like spontaneity or trust (see, ibid., p. 141 ff.). The more we are trying to reach it directly, the more likely we will faH. However, there is a slight chance when we forget about the ends and try tu reach for the means (ibid., p. 153).

4. See B.-A. Lundvall (Ed.), National Systems 01 Innovation: Towards a Theory 01 Innovation and Inter­active Leaming (landon, Pinter, 1995); P. Cocke and K. Morgan, The Associational Economy: Firms, Regions, and Innovation (Oxford, Oxford University Press, 1998).

5. M. Maurice, Methodologische Aspekte internationaler Vergleiche: Zum Ansatz des gesellschaftlichen Effekts, in: M. Heidenreich and G. Schmidt (Eds) Intemational vergleichende Organisationslorschung. Fragestellungen, Methoden und Ergebnisse (Opladen. Westdeutscher Verlag, 1991), pp. 82-90.

6. P. Weingan (Ed.), Technik als sozialer Prozeß (Frankfun-am-Main, Suhrkamp, 1989); M. Dierkes and U. Hoffmann (Eds) New Technology at the Outset: Sodal Forces in the Shaping olTechnologicallnno­vation (Frankfurt-am-Maiß, Campus, 1992); E. Grande and J. Häusler, Industrielorschung "nd Forschungspolitik. Staatliche Steuerungspotentiale in der Inlormationstechnik (Frankfurt-am-Main,

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The Evolution 01 Innovation 17

Campus, 1994); H. Kubicek and P. Seeger, Technik8enese; Entwicklungspfade und Koordinations­probleme. Bericht aus dem Schwerpunkt Technikgenese, Verbund Sozialwissenschaftliche Technikforschung, Mitteilungen No. 13, Köln, 1994; W. Rammert, Technik aus soziologischer Perspek­tive. Forschungsstand, Theorieansätze, Fallbeispiele. Ein Überblick (Opladen, Westdeutscher Verlag, 1993); W. Rammert, Die Technik in der Gesellschaft. Forschungsfelder und theoretische Leitdifferenzen im Deutschland der 90er Jahre, in: Verbund Sozialwissenschaftliche Technikforschung, Mitteilungen No. 13 (Köln, 1994); H. Hirsch-Kreinsen and V. Wittke, Soziale Konstitution und Internationalisierung von Innovationsprozessen, in: D. Sauer and C. Lang (Eds) Paradoxien der Innovation. Perspektiven sozialwissenschaftlicher Innovationslorschung (Frankfurt-am~Main, Campus, 1999), pp. 25-50: M. Hard and A. Knie, The cultural dimension of technology management: lessons from tbe hislOry of the aUlomobile, Technology Analysis and Strategie Management, 13. 2001, pp. 91-103.

7. See also W. Rammert, Innovationen im Netz-Neue Zeiten für technische Innovationen: global verteilt und heterogen vemetzt, Soziale Welt, 48(4), 1997, pp. 397-416.

8. See for example K. D. Knorr-Cetina, Die Fabrikation von Erkennmis. Zur Anthropologie der Natunvis­sensehaft (Frankfurt-am-Main, Suhrkamp. 1991); K. D. Knorr-Cetina, Epistemic Cultures: How Sdence Make Knowledge (Cambridge, MA, Harvard University Press, 1999).

9. See J. A. Schumpeter, Kapitalismus, Sozialismus und Demokratie, 7th edn (Tübingen, Francke (UTB). 1993). Originally published 1942.

10. See M. Crozier and E. Friedberg. Macht und Organisation (Königsteinffaunus: Athenäum, 1979); A. C. Denzau and D. C. Nonh, Shared mental models, Ideologies and Institutions, 47 (Fase. I), 1994, pp. 3­32; see also N. Luhmann, Organisation und Entscheidung (Opladen. Westdeutscher Verlag, 2000).

11. See R. K. Sprenger, Mythos Motivation. Wege aus einer Sackgasse (Frankfurt-am-Main, Campus, 1999);' see also B. S. Frey and M. Osterloh (Eds) Managing Motivation. Wie Sie die neue Motivations­forschung für Ihr Untemehmen nutzen können (Wiesbaden, Gabler, 2000).

12. See V. Pareto, The Rise and Fall 01 Elites (Bedminster, Ayer, 1969). 13. See Rammert, op. eit., Ref. 6; D. Sauer and C. Lang (Eds) Paradoxien der Innovation. Perspektiven

sozialwissensehaftlicher Innovationsforschung (Frankfurt-am-Main, Campus, 1999); D. Sauer, Perspek­tiven sozialwissenschaftlicher Innovationsforschung-Eine Einleitung, in: Sauer and Lang (Eds) ibid., pp. 9-24; G. Ortmann, Innovation als Paradoxieentfaltung-Eine Schlußbemerkung, in: Sauer and Lang (Eds) ibid.. pp. 249-262.

14. See also K. E. Weick, Der Prozeß des Organisierens (Frankfun-am-Main, Suhrkamp, 1985). 15. See for example L. 1. Peter, Das Peter-Prinzip oder Die Hierarchie der Unfähigen (Reinbek bei

Hamburg, Rowohlt, 1970). 16. See also 1. W. Meyer and B. Rowan, Institutionalized organizations: formal structure as myth and

ceremony, American Journal 01 Socialogy, 83(2), 1977, pp. 340-363. 17. See for same new data E. Laszlo, Total Responsibility Management-Unternehmen in umfassender

Verantwortung führen lernen, in: A. Papmehl and R. Siewers (Eds) Wissen im Wandel. Die lernende Organisation im 21. Jahrhundert (Wien, Ueberreuter. 1999), pp. 23-34, see p. 32,

18. See for a basic view A. Maddison, The World Economy in the 20th Century (Development Centre Studies, OECD, Paris, 1989); A. Maddison, Explaining the Economic Peifonnance 01 Nations. Essays in Time and Spaee (Aldershot, Edward Elgar, 1995a); A. Maddison, Monitoring the World Eeonomy 1820-/992 (Development Centre Studies, OECD, Paris, 1995b); A. Maddison, The Warld Economy

(Development Centre Studies, OECD, Paris. 2000). 19. See F. BraudeI, Sozialgeschichte des 15.-18. Jahrhunderts. Der Handel (München, Kindler, 1990a),

originally published 1979; F. Braudei, Sozialgeschichte des 15.-18. Jahrhunderts, Aufbmch zur Weltwinschaft (München, Kindler, 1990b), originally published 1979; F. BraudeI, Die Dynamik des

Kapitalismus (Stuttgan, Klelt-Cotta, 1986). 20. See J. Pfeffer and G. R. Salancik, The Extemal Control olOrganizations. A Resource Dependenci

Perspeetive (New York, Harper and Row, 1978); J. Barney, Firm resources and sustained compelitive advantage, Journal 01 Management, 17, 1991, pp. 99-120; M. Peteraf, The comerstones of competitive advantage: a resource based view, Strategie Management Journal. 14, 1993, pp. 179-192; pp. 9-53; D. zu Knyphausen-Aufseß, Auf dem Weg zu einem ressourcenorientiertem Paradigma? Resource-Dependence-Theorie der Organisation und Resource-Based View des Strategischen Manage­menls im Vergleich, in: G. Onmann et al. (Eds) Theorien der Organisation. Die Rückkehr der Gesellschaft (Opladen, Westdeutscher Verlag, 1997), pp. 452-480; G. Schreyägg, Theorien organisator­ischer Ressoucen, in: G. Onmann et al. (Eds), ibid., pp. 481-486.

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18 M. Pohlmann

21. See BraudeI, 199Oa, b, 1986, ap. eil., Ref. 19; see C. Gebhardt, Die Regionalisierung von Fo"chungs­mitteln in der Infonnationstechnologie (Wiesbaden, Gabler, 1997), for regional development in Baden Wurttemberg, Bavaria and Massachusells from 1960 to 1995.

22. See M. Pohlmann, Der Kapitalismus in Ostasien. Siidkoreas und Taiwans Wege ins Zenmim der Welt· wirtschaft (Münster, WestfaJisches Dampfbaat, 2002); C. Gebhardt, S. Krauss and C. Todt, Option China? Chancen und Risiken für den deutschen Miltel.stand in Asien (Wiesbaden. Gabler. 2000).

23. See M. Pohlmann, M. Apelt and C. Burow, Industrielle Nerc;werke. Antagonistische Kooperationen an der Schnittestelle Beschaffung-Zulieferung (Mering, Hamp Verlag, 1995).

24. H. Hirsch-Kreinsen, Shareholder Value. Zum Wandel von Unternehmensstrukturen und Kapitalmarkt­bedingungen, WS/-Mitteilungen, No. 5, 1999, pp. 322-330; R. Shiller, Irrationaler Überschwang (Frankfun-am-Maiß, Campus. 2000); S. Becker. Einfluß und Grenzen des Shareholder Value. Strategie. und StruktUlwandel deutscher Großunternehmen in der chemischen und pharmazeutischen Industrie (FranJ<furt-am-Main, Peter Lang, 2001); T. Sablowski .nd 1. Rupp, Die neue Ökonomie des Shareholder Value-Corporale Governance im Wandel, Prokla, Zeitschrift fiir kritische Sozialwissenschaft, 31 (122), 2001, pp. 47-78; S. Seek et al., Nach der New Economy. Perspektiven der deutschen Wirtschaft (Münster, Westfalisches Dampfboot, 2002); C. Kelleernann, Entflechtung der Deutschland AG?, in: Beck et al., ibid.. pp. 113-132.

25. Aceording to M. F. Gui1len, Models of Management. Work, Authority and Organization in a Compara· tive Perspective (Chieago, University of Chieago Press, 1994).

26. lbid. 27. Ibid., p. 13f. 28. See for example B. Johanison, Beyond process and structure: social exchange networks, International

Sludies ofManagemenl and Organillltion, 17(1), 1987a, pp. 3-23; B. lohanison, Anarchists and arga­nizers: entrepreneurs in a network perspeetive, International Swdies of Management and Organization, 17(1), 1987b, pp. 49-63; 1. 10hanson and L.-G. Mallson, Inlerorganizational relalions in industrial systems: a network approach comp.ared with the transaetion-cost approach, International Studies of Management and Organizalion, 17(1), 1987, 64-74; T. lohansson and I. Hägg, Extrapreneu,,­between markets and hierarchies, Intemotional Studies of Management and Organization, 17(1), 1987, pp. 34-48; W. W. Powell, Neither market nor bierarchy: network forms of orgnnization, Research in Organillltiona/ Behavior, 12. 1990, pp. 295-336; Cooke, op cit., Ref. 4; M. Castells, The Rise ofthe Nerwork Society (Maiden, MA, Blackwell, 2000).

29. See also S. Lash and 1. Urty, The End ofOrganized Capitalism (Cambridge, Polily, 1987). 30. lbid. 31. See especially for so called 'Wintelism', M. Bonus and J. Zysman, Wintelism and the change terms of

global competilion: protolype or future? BerkJey, BRIE Working Paper 96B, 1997; Hissch-Kreinsen, op. eil.. Ref. 24; Beck el al., op. eil., Ref. 24.

32. Projects are eharacterized by the foUowing features: they allow for a flexible adaption to new tasks; they are limited in time; they are an organization within the organization; they often aim at design or construc­tion; they ignore hierarchies and boundaries; they collide with daily business of team members involved; they ask for a different leadership style.

33. See P. Heintel and E. E. Krainz, Projektmanagement. Eine Antwort aufdie Hierarchiekrise? (Wiesba· den, Gabler, 2000), p. 3ff.

34. When we talk about regions in a sociological perspective, we suppose, that the 'social space' does have a fonnative power regarding behaviour. We will not define space along its political borders. We talk about a socially signified 'social space' as a fonnative eontext, which is referred to as 'region' in communication science (see for this concept J. Habennas. Theorie des kommunikativen HandeIns. Bd. 2: Zur Kritik der funktionalistischen Vernunft (Frankfurt-am-Main, Suhrkamp, 1981), pp. 209 ff.). Using thaI distinction, we imply a social space that is broader than family, kinship and community; we assume, that the social spaee is fonnative for identific8tion and that there are lies, which integrate the social space.

35. See M. F. Porter, The Competilive Advalllage af Nations (New York, Free Press, 1990); W. Streeck, Sodal Institutions and Economic Peiformance. Studies of Industrial Relations in Advaneed CapitaUst Economies (London, Sage, 1992); D. C. Nonh, Institutions, Institutional Change and Economic Per­formance (Cambridge, Cambridge Unive"ity Press, 1990); D. C. North, Economic performance through time, American Economic Review, 84(3),1994, pp. 359-368; Denzau and North, op. eit., Ref. 10.

36. See rar data Maddison, 1995a,b; 2000, op. eit., Ref. 18; H. Wiesenthal, Globalisierung als Epochen­bruch-Maximaldimensionen eines Nullsummenspiels, in: G. Schmidt and R. Trincek (Eds)

The Evolution 01 Innovation 19

Globalisierung. Ökonomische und soziale Herausforderungen am Ende des zwanzigsten Jahrhunderts (Baden-Baden, Nomos, 1999), pp. 503-533. The discussion aboul dive"ity in regional capilalism (see M. Albert, Capitalism against Capitalism (Landon, WhutT, 1993); Lundvall, op. eil., Ref. 4; PohJmann, op. cit., Ref. 22) reftects that neither convergence theery nor the theoreticaJ concept of divergence regarding developing and industrial countries does represent the complex reality any more.

37. W. 1. Forrester, Innovation and economic change, Full/res, 13(4), 1981, pp. 323-331; C. Perez, Struetural change and assimiliation of new technologies in the economic and sodal systems. Futures, 15, October 1983, pp. 357-375; R. Coombs, Lon8 wave, and labor-prncess change, Soei%gical Review, 7(4), 1984, pp. 675-701; C. Freeman and C. Perez, Steuclural crises of adjustmenl: business cycles and investment behavior, in: G. Dosi. C. Freeman, R. Nelson, G. Silverberg and L. Seete (Eds) Technical Change and Economic Theory (Landon, Pinter, 1988); A. Kleinknecht, Innovalion, Profitrate, > Regulation< und Kontradieff-Wellen, in: H. Abromeil and U.lürgens (Eds) Die polilische Logik wirtschaftlichen Hande/ns (Berlin, Ed. Sigma, 1992), pp. 314-327.

38. See Guillen, op. eil., Ref. 25. 39. See for example M. Olson, Aufstieg und Niedergang der Nationen. Ökonomisches Wachstum, Stagnation

und soziale Starrheit, 2nd edn (Tübingen, Mohr, 1991); M. Mann, Introduction: empires with ends, in: M. Mann (Ed.) The Rise and Decline of Ihe Nation-Stale (Oxford, Basil Blackwell, 1990), pp. 1-11; C. Johnson, Ein Imperium verfällt. Wann endet das AmeriJcanische Jahrhundert? (MUnchen, Blessing, 1999).

40. Gebhardt.op. cit., Ref. 21; C. Gebhardt, Tbe strategie relevance of anificial intelligence for eorporate suceess in the global energy market, International Journal for Technology Poliey arid Management, 2(2),2002, p. 149.

41. T. Parsans, Gesellschaften. Evolutionäre und komparanive Perspektiven, 2 edn (Frankfurt-am-Main. SUhskamp, 1986).

42. See ibid.; T. Parsens, Das System moderner Gesellschaften, 4 edn (Weinheim, Juventa, 1996).

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