Abstract
AbstractWhat is the relationship between institutional frameworks, public policy, and the governance of innovative competencies by firms? This chapter extends the varieties of capitalism theory to examine how different types of economy impede the governance of new technology firms. It argues that most new technologies attempt to create radical innovations by developing competencies along a widely diffused “Silicon Valley Model” surrounding the financing, staffing, and creation of employee incentives within firms. Liberal market economies, such as those found in the US and UK, provide strong institutional supports for the Silicon Valley Model, while coordinated market economies, such as Germany or Sweden, provide a series of constraints. A theoretical framework is developed to explore this argument. How public policy might impact competitiveness within new technology industries across the two types of economies is discussed.
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