Advertisement

Investigating the Creation and Diffusion of Knowledge for Demand Creation: The Case of the Telecommunications Industry

  • Wei Huang
  • Masanori Yasumoto
  • Jing-Ming Shiu
Chapter
Part of the Evolutionary Economics and Social Complexity Science book series (EESCS, volume 12)

Abstract

This chapter attempts to explain how a leading firm contributes to diffusing technologies for implementation by developing and disclosing the technologies of standard-essential patents (SEPs) through system development. Technology diffusion plays a critical role in creating demand. Disclosure of technologies to the public through standardization is reported to accelerate the process of demand creation. However, it is still hard for firms to learn and maintain the knowledge and relevant technologies to develop complex systems: system knowledge. By analyzing a key case in the telecommunications industry, this chapter suggests that demand creation is encouraged by the technological foundations (i.e., system knowledge and relevant technologies) residing in the leading firms’ system integration capabilities to implement technology specifications. Such technological foundations are shaped by the strategic decision to provide technologies for implementation rather than total solution systems.

References

  1. Baldwin CY (2010) When open architecture beats closed: the entrepreneurial use of architectural knowledge. Harvard Business School Finance Working Paper 10-063Google Scholar
  2. Baldwin CY, Woodard CJ (2009) The architecture of platforms: a unified view. In: Gawer A (ed) Platforms markets and innovation. Edward Elgar, London, pp 19–44Google Scholar
  3. Bekkers R (2001) Mobile telecommunications standards: GSM, UMTS, TETRA, and ERMES. Artech House, LondonGoogle Scholar
  4. Bekkers R et al (2002a) Intellectual property rights, strategic technology agreements and market structure: the case of GSM. Res Policy 31(7):1141–1161CrossRefGoogle Scholar
  5. Bekkers R et al (2002b) Intellectual property rights and standardization: the case of GSM. Telecommun Policy 26:171–188CrossRefGoogle Scholar
  6. Bezerra J et al (2015) The mobile revolution: how mobile technologies drive a trillion-dollar impact. BCG perspectives. https://www.bcg.com/publications/2015/telecommunications-technology-industries-themobile-revolution.aspx. Accessed 7 July 2018
  7. Blind K, Mangelsdorf A (2016) Motives to standardize: empirical evidence from Germany. Technovation 48-49:13–24CrossRefGoogle Scholar
  8. Blind K, Thumm N (2004) Interrelation between patenting and standardization strategies: empirical evidence and policy implications. Res Policy 33:1583–1598CrossRefGoogle Scholar
  9. Boudreau K (2010) Open platform strategies and innovation: granting access vs. devolving control. Manag Sci 56(10):1849–1872CrossRefGoogle Scholar
  10. Brusoni S et al (2001) Knowledge specialization, organizational coupling, and the boundaries of the firm: why do firms know more than they make? Adm Sci Q 46(4):597–621CrossRefGoogle Scholar
  11. Cargill CF (1997) Open systems standardization: a business approach. Prentice Hall, Upper Saddle RiverGoogle Scholar
  12. Chesbrough HW (2005). Open innovation: the new imperative for creating and profiting from technology: Harvard Business Press First Trade Paper EditionGoogle Scholar
  13. David PA, Greenstein S (1990) The economics of compatibility standards: an introduction to recent research. Econ Innov New Technol 1(1–2):3–41CrossRefGoogle Scholar
  14. Davies A (1996) Innovation in large technical systems: the case of telecommunications. Ind Corp Chang 5(4):1143–1180CrossRefGoogle Scholar
  15. Davies A, Brady T (2000) Organizational capabilities and learning in complex product systems: towards repeatable solutions. Res Policy 29(7–8):931–953CrossRefGoogle Scholar
  16. Dosi G et al (2003) The economics of systems integration: towards an evolutionary interpretation. Bus Sys Integr:95–113Google Scholar
  17. Economides N (1989) Desirability of compatibility in the absence of network externalities. Am Econ Rev:1165–1181Google Scholar
  18. European Commission (2014) Patents and standards: a modern framework for IPR-based standardization. European Union, BrusselsGoogle Scholar
  19. Farrell J, Saloner G (1988) Coordination through committees and markets. RAND J Econ 19(2):235–252CrossRefGoogle Scholar
  20. Funk JL (2002) Global competition between and within standards. Palgrave, BasingstokeCrossRefGoogle Scholar
  21. Garud R, Kumaraswamy A (1993) Changing competitive dynamics in network industries: an exploration of sun Microsystems’ open systems strategy. Strateg Manag J 14:351–369CrossRefGoogle Scholar
  22. Garud R, Kumaraswamy A (1995) Technological and organizational designs for realizing economies of substitution. Strateg Manag J 16(1):93–109CrossRefGoogle Scholar
  23. Garud R et al (2002) Institutional entrepreneurship in the sponsorship of common technological standards: the case of sun Microsystems and java. Acad Manag J 45(1):196–214Google Scholar
  24. Gawer A, Cusumano MA (2002) Platform leadership: how Intel, Microsoft, and Cisco Drive Industry Innovation. Harvard Business School Press, BostonGoogle Scholar
  25. Granstrand O (1999) The economics and management of intellectual property. Edward Elgar Publishing, NorthamptonGoogle Scholar
  26. He ZL et al (2006) Entry and competitive dynamics in the mobile telecommunications market. Res Policy 35(8):1147–1165CrossRefGoogle Scholar
  27. Helpman E (1998) General purpose technologies and economic growth. MIT Press, Cambridge, MAGoogle Scholar
  28. Henderson RM, Clark KB (1990) Architectural innovation: the reconfiguration of existing product technologies and the failure of established firms. Adm Sci Q 35:9–30CrossRefGoogle Scholar
  29. Henkel J, Baldwin CY (2009) Modularity for value appropriation: drawing the boundaries of intellectual property. Harvard Business School Working Paper 90-097Google Scholar
  30. Hobday M (1998) Product complexity, innovation and industrial organization. Res Policy 26:689–710CrossRefGoogle Scholar
  31. Iansiti M, Levien R (2004) Strategy as ecology. Harv Bus Rev 82(3):68–81Google Scholar
  32. Jaffe AB, Trajtenberg M (2002) Patents, citations, and innovations: a window on the knowledge economy. MIT Press, Cambridge, MAGoogle Scholar
  33. Kang B, Motohashi K (2015) Essential intellectual property rights and inventors’ involvement in standardization. Res Policy 44(2):483–492CrossRefGoogle Scholar
  34. Katz ML, Shapiro C (1986) Technology adoption in the presence of network externalities. J Polit Econ 94(4):822–841CrossRefGoogle Scholar
  35. Katz ML, Shapiro C (1994) Systems competition and network effects. J Econ Perspect 8(2):93–115CrossRefGoogle Scholar
  36. Kristiansen E, Thum M (1997) R&D incentives in compatible networks. J Econ 65:55–78CrossRefGoogle Scholar
  37. Leiponen A (2008) Competing through cooperation: the organization of standard setting in wireless telecommunications. Manag Sci 54(11):1904–1919CrossRefGoogle Scholar
  38. Lipsey RG et al (2005) Economic transformations: general purpose technologies and long-term economic growth. Oxford University Press, New YorkGoogle Scholar
  39. Matutes C, Regibeau P (1988) “Mix and match”: product compatibility without network externalities. Rand J Econ 19:221–234CrossRefGoogle Scholar
  40. Moore JF (1993) Predators and prey: a new ecology of competition. Harv Bus Rev 71(3):75–83Google Scholar
  41. Office of Science and Technology (1990) Technology foresight progress through partnership: defence and aerospace. Office of Science and Technology, LondonGoogle Scholar
  42. Pavitt K (2005) Specialization and systems integration: where manufacture and services still meet. In: Prencipe A et al (eds) The business of systems integration. Oxford University Press, New York, pp 78–91CrossRefGoogle Scholar
  43. Pon B et al (2014) Android and the demise of operating system-based power: firm strategy and platform control in the post-PC world. Telecommun Policy 38(11):979–991CrossRefGoogle Scholar
  44. Prencipe A (2005) Corporate strategy and systems integration capabilities: managing networks in complex systems industries. In: Prencipe A et al (eds) The business of systems integration. Oxford University Press, New York, pp 114–132CrossRefGoogle Scholar
  45. Rysman M, Simcoe T (2008) Patents and the performance of voluntary standard-setting organizations. Manag Sci 54(11):1920–1934CrossRefGoogle Scholar
  46. Schilling M (2009) Protecting or diffusing a technology platform: tradeoffs in appropriability, network externalities, and architectural control. In: Gawer A (ed) Platforms, markets and innovation. Edward Elgar Publishing, London, pp 192–218Google Scholar
  47. Shiu JM, Yasumoto M (2015) Investigating firms’ knowledge management in the standardization: The analysis of technology specification-declared essential patent networks on telecommunication industry. MMRC Discussion Paper Series, University of Tokyo, p 465Google Scholar
  48. Shiu JM, Yasumoto M (2017a) Exploring the architectural control over opened system-goods: analysis of technology specifications and standard-essential patents in the telecommunication industry. Presented at the AOM (academy of management) annual meeting, AtlantaGoogle Scholar
  49. Shiu JM, Yasumoto M (2017b) Investigating knowledge spillovers under standardization: the examination of the patent-citation networks in the telecommunication industry. J Manag Policy Pract 18(2):81–104Google Scholar
  50. Shiu JM, Yasumoto M (2017c) Exploring the source of architectural control of complex system-goods under standardization. Presented at the SMS (strategic management society) annual meeting, HustonGoogle Scholar
  51. Simcoe TS (2006) Open standards and intellectual property rights. In: Chesbrough H et al (eds) Open innovation: researching a new paradigm. Oxford University Press, Oxford, pp 161–183Google Scholar
  52. Simcoe TS (2012) Standard setting committees: consensus governance for shared technology platforms. Am Econ Rev 102(1):305–336CrossRefGoogle Scholar
  53. Simcoe TS et al (2009) Competing on standards? Entrepreneurship, intellectual property, and platform technologies. J Econ Manag Strateg 18(3):775–816CrossRefGoogle Scholar
  54. Steinmuller WE (2003) The role of technical standards in coordinating the division of labour in complex system industries. In: Prencipe A et al (eds) The business of systems integration. Oxford University Press, New York, pp 133–151CrossRefGoogle Scholar
  55. Teece DJ (2007) Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance. Strateg Manag J 28(13):1319–1350CrossRefGoogle Scholar
  56. Van de Kaa G, de Bruijn H (2015) Platforms and incentives for consensus building on complex ICT systems: the development of WiFi. Telecommun Policy 39(7):580–589CrossRefGoogle Scholar
  57. Weiss M, Cargill C (1992) Consortia in the standards development process. J Am Soc Inf Sci 43(8):559–565CrossRefGoogle Scholar
  58. West J (2003) How open is open enough? Melding proprietary and open source platform strategies. Res Policy 32:1259–1285CrossRefGoogle Scholar
  59. West J (2006) The economic realities of open standards: black, white and many shades of gray. In: Greenstein S, Stango V (eds) Standards and public policy. Cambridge University Press, Cambridge, pp 87–122CrossRefGoogle Scholar
  60. West J, Dedrick J (2001) Open source standardization: the rise of Linux in the network era. Knowl Technol Policy 14(2):88–112Google Scholar
  61. Xia M et al (2012) Enhancing value via cooperation: firms’ process benefits from participation in a standard consortium. Ind Corp Chang 21(3):699–729CrossRefGoogle Scholar
  62. Yayavaram S, Ahuja G (2008) Decomposability in knowledge structures and its impact on the usefulness of inventions and knowledge-base malleability. Adm Sci Q 53(2):333–362CrossRefGoogle Scholar

Copyright information

© Springer Japan KK, part of Springer Nature 2018

Authors and Affiliations

  • Wei Huang
    • 1
  • Masanori Yasumoto
    • 2
  • Jing-Ming Shiu
    • 3
  1. 1.University of TokyoTokyoJapan
  2. 2.Yokohama National UniversityYokohamaJapan
  3. 3.National Cheng Kung UniversityTainanTaiwan

Personalised recommendations