Teece, David

2006-06-13

Teece, Pisano and Shuen, 1997: ...high-technology industries ... rapid and flexible product innovation. ... dynamic refers to the capacity to renew competences ... changing business environments ... rate of technological change is rapid ... future competition and markets difficult to determine ... capabilities emphasizes the key role of strategic management in...adapting, integrating, and reconfiguring...skills, resources...and competences

Teece, Pisano and Shuen, 1997: ...choices about domains of competence are influenced by past choices. At any given point in time, firms must follow a certain trajectory or path of competence development. This path not only defines what choices are open...today, but it also puts bounds around what its internal repertoire is likely to be in the future. ...long-term, quasi-irreversible commitments to certain domains of competence.

Teece, Pisano and Shuen, 1997: ...how they renew competences to respond to shifts in the business environment. ... how firms can develop their capability to adapt and even capitalize on rapidly changing environments.

--05.5.19--

... knowledge and its applications are at the very roots of modern economic growth and prosperity.

... structural changes in the economies of advanced countries. ... modified the nature of what is strategic and highlighted the importance of knowledge and its management.

liberalization of markets. global flow of final and intermediate goods, and factors of production (labor and capital). transportation costs have fallen and information about market opportunities also flow instantaneously. competition has sharpened.

expansion of what is tradeable. efficient markets have leveled the game. if a market is efficient, there is no competitive advantage from merely participating in the market (since it is open to all).

strengthening of intellectual property regimes. intellectual property rights: patents, trademarks, trade secrets, copyrights.

growing importance of increasing returns. first, standards and networks externalities (standards are required for interoperability. if they are proprietary, they provide significant rents). second, customer lock-in (customer learning and customer investment in high-tech products amplify switching costs). third, large up-front costs (large research, development and design costs). fourth, producer learning (more efficient as experience is gained).

economics of increasing returns: high pay-off if timing is right. being well positioned when standards gel is essential. strategy involves what games to play, and playing with skill. technological markets: rules are not set, identity of the players poorly appreciated, payoffs matrix murky. Rewards go to those good at sensing and seizing opportunities.

seizing opportunities frequently involves identifying and combining the relevant complementary assets needed to support the business. superior technology is not enough, winners are the entrepreneurs with the cognitive and managerial skills to discern the shape of the play, and then act upon it.

there is high payoff to rapidly sensing and then seizing opportunities. this is called dynamic capabilities. most likely to be found in firms that are highly entrepreneurial, with flat hierarchies, a clear vision, high-powered incentives, and high autonomy. companies must constantly transform and retransform. a mission critical orientation is essential.