Local search and the evolution of technological capabilities

• Published in: Strategic management journal Vol. 17; no. S1; pp. 21 - 38
• Main Authors: Stuart, Toby E., Podolny, Joel M.
• Format: Journal Article
• Language: English
• Published: Chichester John Wiley & Sons, Ltd 01-07-1996; John Wiley and Sons; Wiley Periodicals Inc
• Subjects: Alliances; Business innovation; Business management; Business strategies; Business structures; Evolution; evolutionary theory; History of technology; Industrial innovations; Innovation; Innovations; Inventions; local search; Management; Management development; Management techniques; Market share; Organizational behaviour; R&D; Research & development; Semiconductors; Strategic planning; Studies; Technological change; Technological innovation; Technology; Japan
• ISSN: 0143-2095; 1097-0266
• DOI: 10.1002/smj.4250171004

The assumption that `local search' constrains the direction of corporate R&D is central in evolutionary perspectives on technological change and competition. In this paper, we propose a network-analytic approach for identifying the evolution of firms' technological positions. The approach (1) permits graphical and quantitative assessments of the extent to which firms' search behavior is locally bounded, and (2) enables firms to be positioned and grouped according to the similarities in their innovative capabilities. The utility of the proposed framework is demonstrated by an analysis of strategic partnering and the evolution of the technological positions of the 10 largest Japanese semiconductor producers from 1982 to 1992.