Essays on the co-evolution between strategies and technologies

The current thesis is about innovation, interpreted as the outcome of the matching between technological knowledge and the social environment in which this knowledge is used and designed. The four essays composing this final dissertation all share the idea that innovations are not the inevitable outcome of some pre-established pattern but, instead, the result of a continuous effort to provide novel solutions to, and make profits out of, an ever-changing set of needs arising within our societies. To this extent, the understanding of the innovation process calls for the understanding of the interactions between three fundamental elements: the agents looking for new business opportunities, the social environment (e.g., consumers, firms, institutions) expressing social needs, and the technological realm providing the hitherto attainable solutions to these needs. These elements can be seen as a triad in continuous evolution; or better, co-evolution, for each component of the system influences and reacts to changes coming from the other two. Indeed, the agents must interpret the environment to pinpoint new opportunities, technology is modified based on agents’ actions and knowledge, and the environment transforms after the introduction of new products, processes, or organisational forms. Under this perspective, innovation is therefore a complex and multi-faceted phenomenon, characterised by three dimensions. The first one is the direction: any artefact serves one or more functions which provide the direction for its improvement. Sometimes the matching between the technological means to achieve the functions and the functions themselves emerge out of the blue -as in the case of the subject at the centre of chapter 1- while other times the functions come first, and the architecture is adapted around them. Either way, any innovation is characterised by the functions it serves, and it is not a mere improvement in quality of something that existed before. Moreover, functional evolution is important to understand technological bifurcations and the connected social phenomena, such as the emergence of new markets and niches. The second dimension is path dependency, a feature characterising all the evolutionary processes. Path-dependency derives from direction: if innovations are generated to serve a purpose by re-combining the technological knowledge at disposal, then, from an historical perspective, today’s knowledge depends upon yesterday’s one. Finally, the third dimension is place-dependence and represents the spatial version of path dependency. Although we live in highly interconnected societies, knowledge transmission often requires physical interactions whereby tacit elements are transferred and learned. To this extent, the evolution of knowledge does not only hinge on the knowledge available at one point in time, but on the knowledge available at one point in time in a specific place. To this extent, the following four essays study four different phenomena related to technology evolution by adopting these co-evolutionary lenses. In particular, each one of them focuses on a specific mechanism of technological evolution to understand also the consequences on the economic side.