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The technological competencies of the world's largest firms: complex and path-dependent but not much variety.
journal contributionposted on 2023-06-07, 19:32 authored by Parimal Patel, Keith Pavitt
Firm-specific technological competencies help explain why firms are different, how they change over time, and whether or not they are capable of remaining competitive. Data on more than 400 of the world's largest firms show that their technological competencies have the following characteristics: 1. They are typically multi-field, and becoming more so over time, with competencies ranging beyond their product range, in technical fields outside their 'distinctive core'. 2. They are highly stable and differentiated, with both the technology profile and the directions of localised search strongly influenced by firms' principal products. 3. The rate of search is influenced by both the firm's principal products, and the conditions in its home country. However, considerable unexplained variance suggests scope for managerial choice. These findings confirm the importance of complexity and path dependency in the accumulation of firm-specific technological competencies, and show that managers are heavily constrained in the directions of their technological search. They also show the limits of the notion of competition through variety, given that the same specific field of technological competence is often essential to the development of a range of possible product configurations. Technological imperatives still exist.
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- SPRU - Science Policy Research Unit Publications
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