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On the basis of a case study of a leading user organisation in the market for industrial automation technology, I demonstrate how standard setting can be modelled by a knowledge-based approach which transforms collaborative R&D to seamless research & development & standard-setting (R&D&S) processes. “Standard-setting” within this analysis addresses...
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... in motion controls, safety in explosive chemical processes). Basically, world market shares in automation technology are distributed nearly equally between the United States, Western Europe and Asia (for detail see Figure 1). Recently, the field bus market has been dominated by three standard-setting user organizations: ODVA, CLPA and PROFIBUS. ...
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... In the automotive industry one can observe layered organizations (Gerybadze, 2008a, b) which allow big OEM to allocate intellectual property and work shares in collaborative innovation. 5 Slowak (2008) states that collaborative standard-setting serves to align the different agents' knowledge stocks behind a shared standard. ...
Despite a nowadays rich tradition in evolutionary socio-economic studies, historic Science, Technology and Innovation (STI) studies and sociological studies, we find a research gap in explaining how collaborative R&D consortia initiate technological change at the regulatory arena. We refer to those consortia as social groups. In the observed R&D project, firms established a new organisation as nexus between collaborative research and policymakers. Their aim is to shape both technology and selection environment. That nexus incorporates firms promoting two different competing technological trajectories; thus, its policy mandate is ambiguous.
... Therefore, firms should collaborate on standards (create maximum value) but compete on implementation. Slowak (2008) suggests solving this trade-off by "a virtuous cycle of exploration and exploitation". If simplified, that is, the collaborative advancement of a standard /business system from vintage to vintage by the consortium. ...
Extensive research has been conducted on the economics of standards in the last three decades. To date, standard-setting studies emphasize a superior role of demand-side-driven technology diffusion; these contributions assume the evolution of a user-driven momentum and network externalities. We find that consumers wait for a dominant standard if they are unable to evaluate technological supremacy. Thus, supply-side-driven activities necessarily need to address an absence of demand-side technology adoption. Our paper focuses on Blu-ray vs. HD-DVD as an illustrative case of consortia standard wars. One central role of consortia is to coordinate strategic behavior between heterogeneous agents, e.g. incumbents, complementors (content providers) and others, but also to form a coalition against other standard candidates. More precisely, we argue that agents signal standard-setting war outcomes through consortia events. We depict the essential role of consortia structures for the recently determined standard war between the High-Definition disc specifications Blu-ray and HD-DVD. Therefore, the paper suggests that unique supply-side dynamics from consortia structures, consortia announcements and exclusive backing decisions of firms determined the standard-setting process in the Blu-ray vs. HD-DVD standard war. This study is based on the following data: movie releases and sales numbers, membership affiliation for structural consortia analysis, and an in-depth event study. A detailed comparison of the technological specifications of both standard specifications supports our argument that there was no technological supremacy of one standard candidate from a consumer-oriented usecase perspective. We furthermore clarify that content providers (complementors) such as movie studios and movie rental services feature a gate-keeping position in the Blu-ray vs. HD-DVD standard war. In the case of Blu-ray, film studios decided the standard war because the availability of movie releases, but not technological supremacy, made the standard attractive to consumers. Finally, we find that there is a co-evolution of the consortia in terms of membership dynamics. Particularly, firm allegiance of heterogeneous agents plays a crucial role.
... Forthcoming studies on technological competencies at our Centre for International Management and Innovation, Hohenheim, indicate that such abilities are based on accessible resources, experience and knowledge dynamics, intellectual property regimes and managerial competence. According to Slowak (2008), standard-setting capability is related to the ability to create and control a strong business system. 4 More precisely: ...
... Finally, section six includes limitations of the model and conclusions; it also provides a formalised model to resolve the modelling challenges discussed in sections three to five. The theoretic model of standard-setting follows West (2007) and Slowak (2008). West (2007) distinguishes four phases of technology diffusion: ...
... Taking into consideration the co-existence of competition, complementary crossmemberships and cooperation in standard-setting, two dynamics arguments on dynamic capability by Slowak (2008) should be considered: first, "inputs from many industries or multiuse contexts of standards may imply technology lifecycles varying in speed/rate of technological change and level of innovation output/input, but also come with different intellectual property regimes" (Slowak, 2008, p. 151); second, Slowak's model on the trade-off between value created versus value captured (Slowak, 2008, based on Simcoe, 2006 argues that "incumbent firms compare the forces for cooperation with the forces for competition on standards in order to align exploration and exploitation activities within a specific industry context. In industrial automation users are indifferent to all but a few global, durable standards. ...
There is a research tradition in the economics of standards which addresses standards wars, antitrust concerns or positive externalities from standards. Recent research has also dealt with the process characteristics of standardisation, de facto standard-setting consortia and intellectual property concerns in the technology specification or implementation phase. Nonetheless, there are no studies which analyse capabilities, comparative industry dynamics or incentive structures sufficiently in the context of standard-setting. In my study, I address the characteristics of collaborative research and standard-setting as a new mode of deploying assets beyond motivations well-known from R&D consortia or market alliances. On the basis of a case study of a leading user organisation in the market for industrial automation technology, but also a descriptive network analysis of cross-community affiliations, I demonstrate that there must be a paradoxical relationship between cooperation and competition. More precisely, I explain how there can be a dual relationship between value creation and value capture respecting exploration and exploitation. My case study emphasises the dynamics between knowledge stocks (knowledge alignment, narrowing and deepening) produced by collaborative standard setting and innovation; it also sheds light on an evolutional relationship between the exploration of assets and use cases and each firm's exploitation activities in the market. I derive standard-setting capabilities from an empirical analysis of membership structures, policies and incumbent firm characteristics in selected, but leading, user organisations. The results are as follows: the market for industrial automation technology is characterised by collaboration on standards, high technology influences of other industries and network effects on standards. Further, system integrators play a decisive role in value creation in the customer-specific business case. Standard-setting activities appear to be loosely coupled to the products offered on the market. Core leaders in world standards in industrial automation own a variety of assets and they are affiliated to many standard-setting communities rather than exclusively committed to a few standards. Furthermore, their R&D ratios outperform those of peripheral members and experience in standard-setting processes can be assumed. Standard-setting communities specify common core concepts as the basis for the development of each member's proprietary products, complementary technologies and industrial services. From a knowledge-based perspective, the targeted disclosure of certain knowledge can be used to achieve high innovation returns through systemic products which add proprietary features to open standards. Finally, the interplay between exploitation and exploration respecting the deployment of standard-setting capabilities linked to cooperative, pre-competitive processes leads to an evolution in common technology owned and exploited by the standard-setting community as a particular kind of innovation ecosystem.
A technical standards alliance (TSA) is a collection of firms organized for a common goal: developing, revising, and promoting technical standards. A firm may participate in standardization through one or more TSAs: its TSA network. However, little is known about the influencing factors and their boundary conditions for gaining firm-level benefits from such involvement. This study fills this gap. Drawing on a network perspective on standardization, we examine the effect of the firm's TSA network and its absorptive capacity. Using a sample of 437 Chinese IT and automotive industry firms participating in non-governmental Chinese standardization groups, we find positive impacts of participation. A firm's central position and relationship strength within a TSA network positively affect firm performance, and absorptive capacity contributes to this effect. Environmental uncertainty acts as a moderator in the relationship between absorptive capacity and firm performance. These findings add to the literature on the impacts of standardization and are informative for companies that consider participating in standardization.
Interoperability has become an important feature of information and communication technology (ICT) products, services, applications and organisations in the digital age. Travellers around the world, for instance, book their flights online, pay hotel bills by credit card or make international calls with mobile phones as they move across nations. All these transactions require the meaningful and organised flow of data across systems. The role that interoperability plays in today's information society becomes particularly visible when it fails. Examples of limited interoperability in everyday life in a digital age include attempts to transfer a video purchased from a popular online store to a player manufactured by a competitor, the trouble of rendering certain Web sites even with standard Web browsers or the hassle associated with changing file formats from one version of software to the next, to name just a few. In contrast, a broad range of applications on the Internet demonstrate the power of interoperability. Thousands of user-created applications for social networking sites such as Facebook and other platforms, maps-based geolocation applications for information and entertainment purposes, emerging business models based on interoperable identity management systems and even basic services such as e-mail illustrate the enormous benefits of high levels of ICT interoperability. Electronic health records and smart energy grids are current, big-picture examples which illustrate the power of ICT interoperability as well as some of the key challenges associated with it.
Extensive research has been conducted on how firms and regions take advantage of spatially concentrated assets, and also why history matters to regional specialisation patterns. In brief, it seems that innovation clusters as a distinctive regional entity in international business and the geography of innovation are of increasing importance in STI policy, innovation systems and competitiveness studies. Recently, more and more research has contributed to an evolutionary perspective on collaboration in clusters. Nonetheless, the field of cluster or regional innovation systems remains a multidisciplinary field where the state of the art is determined by the individual perspective (key concepts could, for example, be industrial districts, innovative clusters with reference to OECD, regional knowledge production, milieus & sticky knowledge, regional lock-ins & path dependencies, learning regions or sectoral innovation systems). According to our analysis, the research gap lies in both quantitative, comparative surveys and in-depth concepts of knowledge dynamics and cluster evolution. Therefore this paper emphasises the unchallenged in-depth characteristics of knowledge utilisation within a cluster’s collaborative innovation activities. More precisely, it deals with knowledge dynamics in terms of matching different agents´ knowledge stocks via knowledge flows, common technology specification (standard-setting), and knowledge spillovers. The means of open innovation and system boundaries for spatially concentrated agents in terms of knowledge opportunities and the capabilities of each agent await clarification. Therefore, our study conceptualises the interplay between firm- and cluster-level activities and externalities for knowledge accumulation but also for the specification of technology. It remains particularly unclear how, why and by whom knowledge is aligned and ascribed to a specific sectoral innovation system. Empirically, this study contributes with several descr
