شکست سه وجهی در اکتشاف و بهره برداری دانش

In this article, we review current rationales for policy intervention in innovative activities. Focusing particularly on market and system failure rationales, we disentangle related underlying mechanisms for knowledge exploration and exploitation. We provide a novel contribution to the system failure literature by distinguishing between system-level inertia and inhibited emergence. Our conceptualization of inhibited emergence draws on literatures related to neo-institutional sociology, the social construction of technology, and on organizational cognition and learning literatures, and it presents elemental socio-cognitive mechanisms that influence and direct knowledge exploration and exploitation in innovation systems. We compare related, yet theoretically distinct concepts of market failure, system-level inertia, and inhibited emergence, and show how each addresses distinct coordinative mechanisms and field-level dynamics and related socio-cognitive processes.

The notions of ‘market’ and ‘system’ failures are at the heart of modern interventionist innovation policies. Without some kind of failure, the need for interventions would be questionable. With the multiplication of policy interventions in the domain of innovation, theoretical notions of failure have proliferated in the academic literature. In this paper, we seek to re-introduce some order to this proliferation. We review and analyze the extant literature on ‘market’ and ‘systems’ failure and propose a novel way to categorize different failure types, based on the focus, theoretical provenance, and the level of analysis within which a given failure is thought to occur. Our review suggests distinctive underlying mechanisms for market failures, system-level inertia, and inhibited emergence in innovation structures. Our categorization identifies market failures as occurring both at the level of individual economic actors (organizational level), as well as at the level of the economic system (system level). Regardless of the level at which they occur, market failures are typically conceived of as a failure of a given actor (or system) to invest in desired activities, such as research and development. Put simply, a market failure describes a failure to invest, with different types of market failure associated with different underlying causal mechanisms. In contrast, the systems failure literature is more concerned with the failure of a given organization or a given system to produce the desired innovation outputs. Rather than problems with incentives to invest, the causes for system failures are typically ascribed to deficiencies in various processes that occur within the innovation system, as well as to systemic inertia. Because innovation processes are shaped by the structural context, the innovation systems literature has attached considerable interest to structural and regulatory deficiencies that exist within innovation systems. The systems failure literature has also discussed social and cognitive processes that inhibit innovation, notably at the organizational level. On the other hand, where the exploration–exploitation dichotomy has been widely discussed and studied at the organizational level (March, 1991), the same dichotomy is insufficiently developed at the level of the innovation system (Nooteboom et al., 2006), and much less attention has been given to social and cognitive processes that inhibit emergence at the level of the innovation system. Therefore, ambiguities remain in distinguishing between mechanisms that operate at different levels, their interactions, and the ensuing consequences for knowledge exploration and exploitation.1 In this paper, we seek a novel contribution to the literature on market and system failures by distinguishing between system-level problems associated with inertia, on the one hand, and inhibited emergence, on the other. We define inhibited emergence as socially and institutionally constrained sense-making, collective experimentation, learning, and discovery at the level of the innovation system. We propose that while the literature on innovation systems in particular has drawn extensively on the institutional literature, notably on works within the ‘Northian’ tradition, additional insight can be developed by drawing systematically on the neo-institutional analysis of organizations, the literature on the social construction of technologies (Callon, 1986 and Pinch and Bijker, 1987), and from cognition and learning research in organizational analysis (Argyris, 1976, Cohen and Levinthal, 1990 and Weick, 1995). Taken together, these literatures provide an understanding of the socio-cognitive properties and mechanisms underlying inhibited emergence. The benefit of a socio-cognitive perspective is that it enables us to distinguish between system-level inertia and inhibited emergence in innovation systems. This perspective also integrates previously identified socio-cognitive mechanisms within the market failure and systems failure literature. Indeed, many of the mechanisms under this rubric have been previously discussed, especially by researchers within the innovation systems tradition. Nevertheless, we think that the distinction between system-level inertia and inhibited emergence is relevant, and that it therefore merits to be recognized as a category in its own right, even if some aspects of this category overlap with domains traditionally ascribed to market and system failures. Summarizing, we seek three distinctive contributions to the literature on failures in knowledge exploration and exploitation. First, we propose a novel categorization of failure types, one that distinguishes between market failure, system-level inertia, and inhibited emergence, and the various sub-types associated with each category. A synthesis of the different types of failure outcomes and their underlying causal mechanisms is presented in Table 1. Second, we identify the level at which each sub-type occurs (either organizational or system-level), and identify the translation mechanisms that connect the two levels within each major failure category. Third, we elaborate the distinction between system-level inertia and inhibited emergence, and we associate the latter with insufficient knowledge exploration at the level of the innovation system. To do so, we draw on neo-institutional and socio-cognitive literatures more systematically than has been done in the literature thus far. Together, the categorization provides conceptual tools for theorizing action in knowledge exploration and exploitation, and for analyzing the dynamics of emerging technological fields.2 Table 1. Market and systems failures in knowledge exploration and exploitation. Failure synthesis Sub-category outcome Sub-category mechanisms Market failure Markets will under-invest in knowledge production and knowledge use due to the inherent non-proprietary nature of knowledge and related risk in knowledge and technology exploration Underinvestment in knowledge production Uncertainty and risk in R&D activities Failure to appropriate returns to innovation and new knowledge Public-good nature of knowledge The failure of the price mechanism to correctly reflect the externality benefits of technologies and innovation Failure of the market mechanism to assign full value to externalities: (1) public good externalities (technological and infrastructural); (2) merit goods and service externalities; (3) pecuniary good externalities Undervaluation of public good benefits of technologies High transaction costs, high up-front investments, and non-excludability of public good type technologies and infrastructural technologies Systems failure System-level inertia Institutional inertia, structural deficiencies, and lock-in to established externalities inhibit efficient (from a welfare-economic perspective) knowledge exploration and exploitation. Deficiencies in innovation infrastructure and institutional setting Divergent strategies among specialized functions and agents Structural inertia of organizations: failure of firms to learn about or take stock of emerging technological opportunities High transaction costs for engaging in knowledge exploration and exploitation in novel technology field Established capabilities and related sunk costs in both human, organizational, and physical resources become obsolete, when technological discontinuities are competence-destroying, or when new technological knowledge arises in domains unrelated to incumbents Lack of supportive dynamic capabilities Path dependent information processing mechanisms Inability of management cognitive models to support efficient learning in the new domain System-level inertia and lock-in: failures of innovation system and supportive structures to productively re-organize/adapt to paradigmatic technological change Technological lock-in and path-dependencies: learning externalities, resource dependencies, sunk costs and switching costs, and information processing mechanisms Institutional effects Unproductive favoring of either exploration or exploitation of technological knowledge Asynchronous adaptation and development of innovation system constitutive elements High cost and risks associated with exploratory reconfigurations of institutions and networks Inhibited emergence Inhibited institutional emergence due to socially and institutionally constrained sense-making, collective experimentation, learning, and discovery within innovation, production, and technology use structures Inhibited emergence of inter-organizational structures: established interrelation orders constrain sense-making and exploration processes, and hence, inhibit institutional emergence Incumbents and established institutional structures dominate learning and knowledge-creation processes The institutional structure and its sunk costs and quasi-rents inhibit role renegotiation Knowledge disconnects and asynchronicity due to established role expectations in exploration and exploitation Socio-political and cognitive legitimacy constraints of new entrants results in inability to enhance structuration and change Individuals, organizations, and their respective institutional bases experience different time lags in perceiving the advantages of new ways of organizing Asynchronous sense-making by different actors contributes to failure in establishing a dual experimentation and exploitation mode in innovation systems Inhibited emergence of technology: Established technological structures constrain productive social construction and structuration of technology and hence inhibits technology field emergence Constraints by existing mental models that are reinforced by prevailing institutions concerning technology use and production Distinct institutional roles and commitments by actors produce divergent translations of technology, as actors do not adequately connect their sense-making activities Perceptions of technological opportunities and limitations directed by current practice Constraints by existing value systems and institutions, may develop limited understandings of technological opportunities and respective roles of actors in the emerging social order of technology use Supportive exemplars, actors and role models for guiding innovation not present Failures in generating productive forms for collective sense-making and structural exploration Table options 2. Market failure and its underlying mechanisms The concept of market failure developed in parallel with innovation policy experimentation, as well as with the broadening theoretical understanding of the innovation process. With regard to innovative activity, two major forms of market failure are generally recognized in the literature: (1) under-investment in knowledge production, and (2) failure of the price mechanism to reflect the benefits of certain goods. The main underlying mechanism for the first derives from problems related to appropriability. The main mechanism for the second derives from under-valuation of externality. In the following, we review the original arguments for the market failure concept, as well as subsequent elaborations and refinements.

We have reviewed established theoretical rationalities for government intervention in knowledge exploration and exploitation and developed an argument for analyzing socio-cognitive failure mechanisms. This inquiry has prompted us to distinguish between two overarching systems failure mechanisms: system-level inertia and inhibited emergence. Although socio-cognitive failure mechanisms are certainly underlying both market and systems failures at the general level, their most visible manifestation takes the form of inhibited emergence. The distinction between systems inertia and inhibited emergence is important, we think, because they are driven by different causal mechanisms. These causal mechanisms are important to distinguish, as they jointly, yet differently inhibit productive emergence of new industries, thereby preventing societies from fully exploiting advances in knowledge. We hope that the market – systems – socio-cognitive failure trichotomy will help introduce coherence in further analyses of deficiencies in knowledge exploration and exploitation in innovation systems, as well as in related policy design and implementation efforts. We also hope that the trichotomy provides a useful framework for studying innovation as a field-level phenomenon that is regulated by multiple institutional structures and related logics. Although institutional mechanisms underlie both systems-level inertia and inhibited emergence, they differ in subtle but important ways. System-level inertia arises from inertia-creating social mechanisms, dominated by incumbents, which prohibit productive evolution in industry and innovation structures toward states that are known, ex ante, to be ‘better’ than the current state. This failure manifests itself as structural deficiencies and institutional inertia. Inhibited emergence arises from cultural-cognitive frames of institutions that guide actors’ assumptions concerning their own and others’ roles in innovation processes and from actors’ inability to bridge activities and negotiate new roles and relations. The distinction between system-level inertia and inhibited institutional emergence is an important one because it separates two field-level mechanisms: top-down contextual influence and bottom-up emergence (Kozlowski and Klein, 2000). While top-down contextual influences manifest rapidly, bottom-up emergence unfolds over time through micro-level activities by organizations, underlying units, and individuals. Emergent institutional environments are therefore more inclined toward experiencing asynchronous exploration and exploitation at the technology field level, and they are more likely to experience delays for emergent properties to materialize from micro-level action. Due to a lack of institutional support, emergent institutional environments are also more dependent than stable institutional environments on single organizational and individual contributions, which results in partial non-redundancies of the novel technological field. These distinctions help us explain how different mechanisms create organizational and system-level inertia while other mechanisms unlock, divert, and enable new paths and emergence of novel technological fields. The concept of system-level inertia addressed mechanisms and forces that attract actors to follow and build on the current technological paradigm and embedded logics. The concept of socio-cognitive failure has to do with the system's inability to construct new opportunities. It thus focuses on bottom-up and emergent processes. This important distinction between inertia and inhibited emergence is a core aspect of the failure trichotomy proposed in this paper. The notion of socio-cognitive failure also helps focus attention on the social construction of value in innovation systems. An important component of the potential value of new technologies is determined by the innovation system's ability to discover valuable uses for new technologies, select a few appropriate uses, and discover efficient institutional alignments to make those uses possible. Successful technological innovation depends on social innovation and on the discovery of efficient institutional realignments. Individual actors’ decision contexts and sense-making situations are influenced by the role the actor enacts for itself and others (also enacted in one's action and commitment to a given technology vision). To better understand inhibited emergence within innovation structures, one needs to consider both the social and the cultural-cognitive mechanisms of institutional change. Together, system-level inertia and inhibited emergence address what we believe to be the two key institutional mechanisms that impede, retard, and limit transition from the prevailing institutional logic and governance structure to a new productive order in a technological field. As a result, the prevailing innovation system is incapable of constructing value efficiently from new technological opportunities, thus being ‘stuck’ in either an exploration or exploitation mode, without an appropriate balance and coupling between these modes. The framework articulated in this paper addresses the call within new growth theory to support production, diffusion, and use of ideas (in addition to goods and knowledge) in an efficient way (Beesley, 2003 and Romer, 1990). Specifically, this refers to how the different institutions that contribute in the innovation process “interact with each other as elements of a collective system of knowledge creation and use” ( Beesley, 2003, p. 1523) will critically affect innovation performance. The proposed failure trichotomy enables researchers to study the process of realizing socio-economic value from existing and prospective knowledge. Although the three failure mechanisms are related, they also give rise to distinct and new types of inefficiencies and constraints in the construction, production, and capture of existing and prospective knowledge value. These inefficiencies and constraints can also be analyzed as the inability of the social system to take up more productive (from a welfare economics perspective) action for exploration and exploitation at different levels of the innovation system. This framing raises topical issues concerning, for example, the appropriate level of openness versus closeness of innovation processes and organization and tradeoffs of open competition versus regulation of technological architecture around emerging technological fields. Governments should consider these when choosing between steering and facilitating mechanisms to enhance productive emergence in technological fields. The presented trichotomy provides guidance for policy-makers and allows researchers to identify and distinguish underlying failure mechanisms. The different causal mechanisms need to be considered separately, as they may require distinct policy interventions. This said all failures also need to be considered in combination with each other when evaluating possible incentives for facilitating and enabling change in innovation systems. While it is often difficult to distinguish where one failure starts and another ends, we hope that our trichotomy, the separation between organizational and system-level phenomena, and the distinction of stable and emergent institutional environments will be helpful for further research in this domain. Our framing also makes apparent that the three failure mechanisms may vary in their effects over time, across industry contexts, and across emerging technological fields. While this paper has addressed failures in exploration and exploitation of technological knowledge and explored causes for system-level inertia and inhibited emergence, less focus has been given to distinctions between technology-intensive industries and knowledge-intensive service sectors. Such sectors should be studied so as to further refine and elaborate the failure trichotomy presented here. In addition, we have not elaborated widely on the effectiveness of different policy options and instruments in response to the failures discussed above. This requires further research on how the different failures at the organizational and systems levels interact and aggregate, and what factors moderate these processes. Finally, the suggested failure trichotomy allows bridging between policy experimentations and further theory development on the dynamics of innovation structures and technological fields. Further explorations of this aspect should help advance both innovation policy design and practice.