Technological Complementarities Research Articles

A network analysis using metadata to investigate innovation in clean-tech – Implications for energy policy

Clean-technology (clean-tech) is a large and increasing sector. Research and development (R&D) is the lifeline of the industry and innovation is fostered by a plethora of high-tech start-ups and small and medium-sized enterprises (SMEs). Any empirical-based attempt to detect the pattern of technological innovation in the industry is challenging. This paper proposes an investigation of innovation in clean-tech using metadata provided by CrunchBase. Metadata reveal information on markets, products, services and technologies driving innovation in the clean-tech industry worldwide and for San Francisco, the leader in clean-tech innovation with more than two hundred specialised companies. A network analysis using metadata is the employed methodology and the main metrics of the resulting networks are discussed from an economic point of view. The purpose of the paper is to understand specifically specializations and technological complementarities underlying innovative companies, detect emerging industrial clusters at the global and local/metropolitan level and, finally, suggest a way to realize whether observed start-ups, SMEs and clusters follow a technological path of complementary innovation and market opportunity or, instead, present a risk of lock-in. The discussion of the results of the network analysis shows interesting implications for energy policy, particularly useful from an operational point of view.

The complexities in system building strategies — The case of personalized cancer medicines in England

Novel technologies often face difficulties in market uptake, especially when they differ significantly from already established technologies. In some cases, like personalized medicine, new technologies are composed of a number of parallel emerging technologies – in our case therapeutics and corresponding diagnostics – that are heavily co-dependent and cannot diffuse without each other. Therefore, actors in an innovation system need to engage themselves in complex system building strategies in order to create a more favorable environment for their emerging technologies. The bodies of literature on system building and innovation ecosystems have little overlap so far. In this article, we show how system building in a technological innovation system depends on different framework conditions in creating a market for personalized cancer therapeutics and corresponding companion diagnostics in England — such as technological complementarities, timing strategies and organizational complexity. Using this case we illustrate how notions from the literature on innovation ecosystems can complement the current system building literature.

Directed technological change, skill complementarities and sectoral productivity growth: evidence from industrialized countries during the new economy

Recent growth accounting exercises attribute strong productivity growth to increased investments in information and communication technologies (ICT) over the last decades, but abstain from potential complementarity effects with other inputs. Based on three different sets of industrialized countries, this study shows that sectoral productivity growth originated from ICT-skill complementarities and skill-biased technological change (SBTC) during the New Economy. In particular, Scandinavian goods-producing sectors and Anglo–Saxon market services reveal strong SBTC effects that originated from ICT-skill complementarities, while such effects were totally missing in Continental market services during the same periods. Further drivers of productivity growth were intermediate and non-ICT capital deepening.

Achieving alliance ambidexterity through managing paradoxes of cooperation

Purpose – The purpose of this paper is to define co-exploitation, co-exploration, and alliance ambidexterity from the perspective of organizational learning; to analyze how knowledge bases, structural arrangements, and control mechanisms of R&D alliances influence co-exploitation and co-exploration; and to discuss how to achieve alliance ambidexterity by managing paradoxes around knowledge bases, structural arrangements, and control mechanisms. Design/methodology/approach – This is a conceptual paper focussing on how to balance exploitation and exploration at the alliance level through managing three paradoxes of cooperation: similarity vs complementarity, integration vs modularity, and contracts vs trust. Findings – While technological similarity, structural integration, and contracts are more likely to promote co-exploitation, technological complementarity, structural modularity, and trust are more likely to facilitate co-exploration. Alliance ambidexterity, which is beneficial for alliance performance, derives from either the combination of technological complementarity, structural integration, and contracts, or the combination of technological similarity, structural modularity, and trust temporally. Research limitations/implications – Researchers should analyze the possibility of building alliance ambidexterity in other types of interorganizational relationships, and find other possible antecedents of interorganizational learning. Practical implications – Managers should not simply treat R&D alliances as one of exploratory interorganizational relationships, but pay equal attention to co-exploitation and co-exploration. To achieve this balance, practitioners should combine technological complementarity with structural integration and contracts, or integrate technological similarity with structural modularity and trust. Originality/value – This paper is one of the first contributions that analyze how an R&D alliance could gain its ambidexterity through the management of nested cooperation paradoxes.

Changing ecosystem service values following technological change.

Research on ecosystem services has focused mostly on natural areas or remote places, with less attention given to urban ecosystem services and their relationship with technological change. However, recent work by urban ecologists and urban designers has more closely examined and appreciated the opportunities associated with integrating natural and built infrastructures. Nevertheless, a perception remains in the literature on ecosystem services that technology may easily and irreversibly substitute for services previously obtained from ecosystems, especially when the superiority of the engineered system motivated replacement in the first place. We emphasize that the expected tradeoff between natural and manufactured capital is false. Rather, as argued in other contexts, the adoption of new technologies is complementary to ecosystem management. The complementarity of ecosystem services and technology is illustrated with a case study in Barcelona, Spain where the installation of sophisticated water treatment technology increased the value of the ecosystem services found there. Interestingly, the complementarity between natural and built infrastructures may remain even for the very ecosystems that are affected by the technological change. This finding suggests that we can expect the value of ecosystem services to co-evolve with new technologies. Technological innovation can generate new opportunities to harness value from ecosystems, and the engineered structures found in cities may generate more reliance on ecosystem processes, not less.

Influence of Firm and Partner Resources on Firm Performance in the Alliance Portfolio

Although a firm benefits from the resource endowment of the partners in its alliance portfolio, research has so far concentrated on partners. This study proposes that mutual conditions of network resources between a firm and its partners – the compatibility of underlying resources, including physical and R & D resources, strategy, status, and the complementarity of technology – have a positive relationship to the firm’s economic performance in its alliance portfolio. By analyzing alliances within the global semiconductor industry, this study shows that a firm’s economic performance increases when the compatibility and complementarity of network resources are high.

Partnerships versus Corporations: Moral Hazard, Sorting, and Ownership Structure

Team production takes advantage of technological complementarities but comes with the cost of free-ridership. When workers differ in skills, the choice of sorting pattern may be associated with a nontrivial trade-off between exploiting the technological complementarities and minimizing the cost of free-ridership. This paper demonstrates that whether such a trade-off arises depends (i) on how the power of incentives required for effort provision varies with workers’ types, and (ii) on whether the workers are organized for production in partnerships or in corporations. These results have implications for how production is organized in different industries—in partnerships or in corporations. (JEL D21, D82, G32, M12, M54)

The moderating role of the complementary nature of technological resources in the diversification-performance relationship

This article analyzes the moderating role of complementary technological resources in the diversification�performance relationship. Our contention is that entry into a new market poses challenges to complementary resources that are already being exploited and that diversification thus comes at a substantial cost to the diversifying firm. Using a sample of the world�s largest manufacturers, we find that the effect of diversification on productivity is positive for firms with an initially low level of overall technological complementarity. Firms that specialize and have existing complementarities are negatively affected by diversification because the process of unbundling and rebundling technological resources is disruptive to productive firms.

Agricultural Biotechnology: Economics, Environment, Ethics, and the Future

Agricultural biotechnology and, specifically, the development of genetically modified (GM) crops have been controversial for several reasons, including concerns that the technology poses potential negative environmental or health effects, that the technology would lead to the (further) corporatization of agriculture, and that it is simply unethical to manipulate life in the laboratory. GM crops have been part of the agricultural landscape for more than 15 years and have now been adopted on more than 170 million hectares (ha) in both developed countries (48%) and developing countries (52%). On the basis of this substantial history and data spanning many years, the economic and environmental impacts of GM crops can now be summarized with some certainty, and the analysis indicates that, on balance, many benefits have accrued from the adoption of GM crops. There continue to be many ethical issues that are being debated, and many are being resolved through institutional interventions. The future of agricultural productivity would be better served if the genetic modification debate were less polarized and were focused on the potential for complementarity of GM technologies within a diversified farming system framework.

Interjurisdictional Competition with Adverse Selection

In this paper, we study the welfare consequences of imposing alternative regimes of competition between two non-benevolent local governments that compete for mobile firms which have private information on their degree of locational attachment or home bias. In an environment in which politicians fail to internalize correctly the social costs of public funds, competition among jurisdictions raises the firms' information rents to higher levels than if jurisdictions were to cooperate. Therefore, from the perspective of a benevolent federation, constitutional constraints on the competition process may be desirable. We find that imposing a system of coarser policy instruments may improve welfare relative to competition with discretionary instruments, even when politicians are benevolent, because it reduces the costly rents that are granted to firms in equilibrium - at the cost of distorting output choices. We also find that the gains from resorting to constitutional constraints are maximal when communities are identical, but if the extent of asymmetry between locations (in terms of local market size or technological complementarities) increases, the advantages of the constrained regime decrease and can be overturned.

Bringing the Institutional Context Back In: A Cross-National Comparison of Alliance Partner Selection and Knowledge Acquisition

We suggest that firms' national institutional environments alter the logic of alliance partner selection and associated knowledge acquisition. We posit that cross-national variations in corporatist institutional structures (which reflect differences in underlying cooperative norms) influence the relative importance that firms place on a prospective partner's social value (evidenced from the partner's connectedness with members of its industry) and technological value (reflected in the technological complementarity and novelty of the partner's knowledge). We expect that as prospective partners' technological value increases, the probability of alliance formation increases the most for firms residing in less corporatist countries. Likewise, as prospective partners' social value increases, the probability of alliance formation increases the most for firms in more corporatist countries. We further argue that norms regarding knowledge acquisition within an alliance vary across countries, with deliberate learning approaches serving as the norm in less—not more—corporatist settings. We expect that such differences will lead to more immediate interpartner knowledge acquisition in less corporatist environments. Analysis of a longitudinal cross-national data set of alliances in the emergent fuel cell technology industry supports our arguments. Our findings highlight the significance of particular national institutions in specific organizational domains and the complementarity between institutional theory and other strategic resource-based perspectives in the context of interorganizational alliances.

Properties of knowledge base and firm survival: Evidence from a sample of French manufacturing firms

The paper analyzes the effects of the properties of firms' knowledge base on the survival likelihood of firms. Drawing upon the analysis of the patterns of co-occurrence of technological classes in patent applications, we derive the coherence, variety and cognitive distance indexes, accounting respectively for technological complementarity, differentiation and dissimilarity in the firms' patent portfolios. The results of our analysis are in line with the previous literature, showing that innovation enhances the survival likelihood of firms. In addition, we show that the search strategies at work in the development of firms' knowledge base matter in reducing the likelihood of a failure event. Knowledge coherence and variety appear to be positively related to firms' survival, while cognitive distance exerts a negative effect. We conclude that firms able to exploit the accumulated technological competences have more chances to be successful in competing durably in the market arena, and derive some policy implications concerning the role of public intervention in the orientation of search efforts in local contexts.

Shaping the formation of university-industry research collaborations: what type of proximity does really matter?

Research collaborations between universities and industry (U-I) are considered to be one important channel of potential localized knowledge spillovers (LKS). These collaborations favour both intended and unintended flows of knowledge and facilitate learning processes between partners from different organizations. Despite the copious literature on LKS, still little is known about the factors driving the formation of U-I research collaborations and, in particular, about the role that geographical proximity plays in the establishment of such relationships. Using collaborative research grants between universities and business firms awarded by the UK Engineering and Physical Sciences Research Council (EPSRC), in this article we disentangle some of the conditions under which different kinds of proximity contribute to the formation of U-I research collaborations, focussing in particular on clustering and technological complementarity among the firms participating in such partnerships.

Technology and Flexibility: Enablers of Collaboration and Time‐Based Logistics Quality

Collaboration has been cited as one of the most important elements in leveraging supply chains to achieve competitive advantage. Literature in the field of collaboration tends to focus on strategic level initiatives; this research examines the benefits of implementing collaborative approaches at the logistics operations level. We find that leading strategic indicators, including technological innovativeness, technological complementarity, and flexibility are positively related to higher levels of collaboration and logistics service quality at the operational level in retail firms.

Exploring potential R&D collaborators with complementary technologies: The case of biosensors

The study provides a framework for exploring potential R&D collaborators with technological complementarity in products consisting of multidisciplinary technologies. This framework is proper when firms have insufficient information on who may possess the desired complementary technologies. The proposed framework applies two exploratory methods to patent information. The first method, association analysis, mines the interaction between different technologies for the studied products, and produces results that are useful to understanding the complementarity of various technologies. The proposed framework then uses nonlinear principal components analysis to determine the relationship among integrated technologies, specific technology fields, and patentees. The proposed method allows firms to identify patentees with complementary technologies and locate potential R&D collaborators. This study uses an empirical case from the biosensor industry to illustrate how to identify potential R&D collaborators.

An empirical test for general purpose technology: an examination of the Cohen-Boyer rDNA technology

General purpose technologies (GPTs) provide fundamental breakthroughs that transform industries and provide a platform for increased productivity. While a large theoretical literature describes GPT characteristics there has been little empirical work that measures the attributes of GPTs. Our analysis focuses on patents associated with the Cohen--Boyer rDNA patents, a credible GPT candidate. We empirically test our predictions about technological complementarity, applicability and discontinuity against a control group of patents with similar origins. Our results suggest that the characteristics of GPTs may be discernable through the analysis of patent data. Copyright 2012 The Author 2011. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Registration of AFM and SEM Scans Using Local Features

Surface investigations combining the atomic force microscope and scanning electron microscope benefit from the complementarity of both technologies. For the analysis and visualization of a pair of corresponding scans, identifying their spatial alignment is essential. This article presents an automatic registration scheme based on finding correspondences between local image features. The result is then refined by maximizing a similarity measure between the aligned scans. Two feature extraction algorithms have been integrated and tested: Scale-invariant feature transform and speeded-up robust feature. For the experimental evaluation, five types of sample objects showing a variety of different surface structures have been used. The registration scheme succeeds in all application scenarios.

Relación tecnológica en los acuerdos de cooperación empresarial y generación de innovaciones

This paper aims at analyzing the impact of technological relatedness between partners in R&D alliances on specific types of product innovation. After developing the conceptual framework based on organizational learning theory and dynamic capabilities, we carried out a longitudinal study of an international sample of pharmaceutical firms in order to test the hypotheses. The empirical research confirms that technological complementarity and similarity between partners influence differently on the creation of radical and incremental innovation. These evidences highlight the importance of designing a suitable portfolio of R&D alliances in order to develop different innovative capabilities.

Management Insights

Management Insights

Were British cotton entrepreneurs technologically backward? Firm-level evidence on the adoption of ring spinning

I study the slow adoption of ring spinning in Great Britain's cotton industry at the end of the 19th century, which has been used as evidence of British entrepreneurs' declining efficiency and conservatism (Musson, 1959; Aldcroft, 1964; Lazonick, 1981, 1981b). To this purpose I use firm-level data from all of Lancashire's cotton firms over several years. The data are from Worrall's The Cotton Spinners and Manufacturers' Directory for the years 1885, 1886–1887, 1890, 1894, 1902, and 1910. First, I show that the vertical organization of the industry, with its firms specializing in spinning or weaving, did not act as an impediment to the adoption of the ring spinning technology, as was argued by Lazonick. In particular, I show the following: i) non-integrated firms were the first to adopt rings in Great Britain; ii) the large majority of firms that adopted rings were incumbents; iii) vertically integrated firms that were spinning only either twist or weft yarn were still in existence in 1910; and iv) only a negligible number of firms changed their organizational structure upon adopting ring spinning. I also show that a large fraction of firms installed very small numbers of ring spindles upon the adoption of ring spinning, suggesting that firms were slowly adopting ring spindles to replace old mule spindles rather than transitioning over to ring spinning at a single point in time. Then, I show that the rate at which vertically integrated firms adopted rings suddenly accelerated after 1902. I interpret this as evidence that British entrepreneurs were fully aware of the technological complementarities between rings and automatic looms. These complementarities could only be fully exploited by vertically integrated firms.