Innovating routines in the business firm: what matters, what’s staying the same, and what’s changing?

Abstract

One challenge in evolutionary economics is to give greater operational content to the notion of “innovating routines” inside the firm. Historical and contemporary evidence suggests that such routines always have to deal with increasing specialisation in knowledge production, increasing depth in knowledge sources and complexity in physical artefacts, and with the continuous matching of specific corporate competencies and organisational practices to the nature of the market opportunities offered by specific technologies. As a consequence, some innovating routines have always been important, such as those dealing with co-ordination and integration within the firm, and with reducing uncertainty through learning. Others are becoming more so, such as those co-ordinating technological resources external to the firm, coping with systems and simulations, and adapting organisational practices to the requirements of radically changing technological opportunities.