B. The Capabilities Perspective and the Modern Economics of Organization
V. Conclusion
Our aim in this paper has been to document the importance of the capabilities perspective as an emerging perspective on economic organization. It is characterized by distinct insights, not the least the attempt to restore production and production costs to their rightful place as determinants of the boundaries of the firm, and to find a place for qualitative coordination in the theory of economic organization. In other words, the capabilities perspective highlights explanatory mechanisms that are different from those of the post-Coase literature on economic organization.
Since the two perspectives may be read as addressing the same sort of phenomena - notably the existence, boundaries and internal organization of the firm - and employ theoretical concepts and mechanisms (incentives vs qualitative coordination, blueprint knowledge vs capabilities, etc.), they may therefore be interpreted as being competitors. Although the capabilities view is admittedly less advanced than the post-Coase literature in terms of formalization and terminological stringency, with respect to some important phenomena - notably the boundaries of firms - the capabilities perspective, we have argued, develops more plausible explanatory mechanisms.
However, rather than stressing rivalry, we emphasize the complementarity between the two perspectives and the need for more integrative efforts. Even if it is not currently fashionable among contributors to the capabilities perspective, we feel that there are strong arguments in favor of our position. Both perspectives may benefit from the ideas and insights of the other. There is important mainstream work that, if in no way identical to the capabilities view, nevertheless suggests how aspects of capabilities ideas may be formally approached and modeled (Lippman and Rumelt 1982;
Arrow 1985; Bolton and Dewatripont 1994; Aghion and Tirole 1994).
Moreover, when it comes to providing convincing stories about important empirical phenomena, the relations of complementarity between the post-Coase literature and the capabilities view may appear even more striking. For example, it is arguably hard to provide convincing stories about diversification (Teece 1982; Dosi, Teece and Winter 1992) or the organization of the innovation process (Teece 1986) without relying on both perspectives. For these reasons, the perspectives need to be integrated further. We therefore concur with one of the major scholars in today’s economics of organization when he observes that “[i]n order to fully develop its capabilities, transaction cost economics must be joined with a theory of knowledge and production (Teece 1990, p. 59). And, in fact, the reverse may also hold true, that in order to fully develop its capabilities, the capabilities view must be joined with transaction cost economics. For example, in order to understand the process of emergence and accumulation of capabilities, we need to pay attention to the incentive structure of firms, since this influences investments in human capital. In sum, whether we see it from the perspective of the capabilities perspective or from the perspective of the modern economics of organization, there is an exciting theoretical frontier ahead.
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D
anishR
esearchU
nit forI
ndustrialD
ynamicsThe Research Programme
The DRUID-research programme is organised in 3 different research themes : - The firm as a learning organisation
- Competence building and inter-firm dynamics
- The learning economy and the competitiveness of systems of innovation
In each of the three areas there is one strategic theoretical and one central empirical and policy oriented orientation.
Theme A: The firm as a learning organisation
The theoretical perspective confronts and combines the ressource-based view (Penrose, 1959) with recent approaches where the focus is on learning and the dynamic capabilities of the firm (Dosi, Teece and Winter, 1992). The aim of this theoretical work is to develop an analytical understanding of the firm as a learning organisation.
The empirical and policy issues relate to the nexus technology, productivity, organisational change and human ressources. More insight in the dynamic interplay between these factors at the level of the firm is crucial to understand international differences in performance at the macro level in terms of economic growth and employment.
Theme B: Competence building and inter-firm dynamics
The theoretical perspective relates to the dynamics of the inter-firm division of labour and the formation of network relationships between firms. An attempt will be made to develop evolutionary models with Schumpeterian innovations as the motor driving a Marshallian evolution of the division of labour.
The empirical and policy issues relate the formation of knowledge-intensive regional and sectoral networks of firms to competitiveness and structural change. Data on the structure of production will be combined with indicators of knowledge and learning. IO-matrixes which include flows of knowledge and new technologies will be developed and supplemented by data from case-studies and questionnaires.
The third theme aims at a stronger conceptual and theoretical base for new concepts such as 'systems of innovation' and 'the learning economy' and to link these concepts to the ecological dimension. The focus is on the interaction between institutional and technical change in a specified geographical space. An attempt will be made to synthesise theories of economic development emphasising the role of science based-sectors with those emphasising learning-by-producing and the growing knowledge-intensity of all economic activities.
The main empirical and policy issues are related to changes in the local dimensions of innovation and learning. What remains of the relative autonomy of national systems of innovation? Is there a tendency towards convergence or divergence in the specialisation in trade, production, innovation and in the knowledge base itself when we compare regions and nations?
The Ph.D.-programme
There are at present more than 10 Ph.D.-students working in close connection to the DRUID research programme. DRUID organises regularly specific Ph.D-activities such as workshops, seminars and courses, often in a co-operation with other Danish or international institutes. Also important is the role of DRUID as an environment which stimulates the Ph.D.-students to become creative and effective. This involves several elements:
- access to the international network in the form of visiting fellows and visits at the sister institutions
- participation in research projects - access to supervision of theses - access to databases
Each year DRUID welcomes a limited number of foreign Ph.D.-students who wants to work on subjects and project close to the core of the DRUID-research programme.
External projects
DRUID-members are involved in projects with external support. One major project which covers several of the elements of the research programme is DISKO; a comparative analysis of the Danish Innovation System; and there are several projects involving international co-operation within EU's 4th Framework Programme. DRUID is open to host other projects as far as they fall within its research profile. Special attention is given to the communication of research results from such projects to a wide set of social actors and policy makers.
96-1 Lundvall, Bengt-Åke: The Social Dimension of the Learning Economy.
(ISBN 87-7873-000-7)
96-2 Foss, Nicolai J.: Firms, Incomplete Contracts and Organizational Learning.
(ISBN 87-7873-001-5)
96-3 Dalum, Bent and Villumsen, Gert:Are OECD Export Specialisation Patterns Sticky?’ Relations to the Convergence-Divergence Debate. (ISBN 87-7873-002-3) 96-4 Foss, Nicolai J: Austrian and Post-Marshallian Economics: The Bridging Work of
George Richardson. (ISBN 87-7873-003-1)
96-5 Andersen, Esben S., Jensen, Anne K., Madsen, Lars and Jørgensen, Martin: The Nelson and Winter Models Revisited: Prototypes for Computer-Based Reconstruction of Schumpeterian Competition. (ISBN 87-7873-005-8)
96-6 Maskell, Peter: Learning in the village economy of Denmark. The role of institutions and policy in sustaining competitiveness. (ISBN 87-7873-006-6)
96-7 Foss, Nicolai J. & Christensen, Jens Frøslev: A Process Approach to Corporate Coherence. (ISBN 87-7873-007-4)
96-8 Foss, Nicolai J.: Capabilities and the Theory of the Firm. (ISBN 87-7873-008-2) 96-9 Foss, Kirsten: A transaction cost perspective on the influence of standards on
product development: Examples from the fruit and vegetable market. (ISBN 87-7873-009-0)
96-10 Richardson, George B.: Competition, Innovation and Increasing Returns. (ISBN 87-7873-010-4)
96-11 Maskell, Peter: Localised low-tech learning in the furniture industry.
(ISBN 87-7873-011-2)
96-12 Laursen, Keld: The Impact of Technological Opportunity on the Dynamics of Trade Performance. (ISBN 87-7873-012-0)
96-13 Andersen, Esben S.: The Evolution of an Industrial Sector with a Varying Degree of Roundaboutness of Production. (ISBN 87-7873-013-9)
96-14 Dalum, Bent, Laursen, Keld & Villumsen, Gert: The Long Term Development of OECD Export Specialisation Patterns: De-specialisation and “Stickiness”. (ISBN 87-7873-014-7)
96-15 Foss, Nicolai J.: Thorstein B. Veblen: Precursor of the Competence-Based Approach to the Firm. (ISBN 87-7873-015-5)