Shaping the national system of inter-industry knowledge exchange: Vertical integration, licensing and repeated knowledge transfer in the German plastics industry

Abstract

We will claim in this paper that it was in particular the above-average propensity to share innovative information with customers and competitors which caused the exceptional international competitiveness of the West German plastics industry including chemical firms, plastics fabricators and machine makers. The system of knowledge exchange of this national cluster was shaped in two main steps. In the first half of the 20th century, cartellization and mergers were first tolerated and then even supported by the German government. It was in this period when German chemical firms formed the vertically integrated I.G. Farben concern which provided an optimal organisational framework to explore the new technological path of plastics. After the breaking up of I.G. Farben the firms of the West German chemical firms had to find new ways to maintain inter-industry technological co-operation in the second half of the 20th century. It turned out that they became aware of both contractual and non-contractual solutions of bundling standard good and information which were often placed somewhere between “market” and “hierarchy”. It seems to be no accident that all these different institutions did primarily encourage knowledge exchange between firms in geographical and cultural proximity. That is why the knowledge exchanging network of the plastics industry described in this paper has been in particular concentrated on German firms. Even so the question is still open whether this localisation is just a curiosity limited to a special industry cluster or part of a broader German system of knowledge exchange.