Knowledge flows and innovation capability: The patenting trajectory of Taiwan's thin film transistor-liquid crystal display industry

This paper uses USPTO's patent data to present and analyse knowledge flows and innovation capability within and across Taiwan's top five major players in the thin film transistor-liquid crystal display (TFT-LCD) industry. Based on the empirical results, the study shows that latecomers, such as Taiwan, to the TFT-LCD industry have internalised external knowledge from the US and particularly from Japan on specific core technologies, while the knowledge relationship between source and recipient is un-intimated. One important finding of this study is that Taiwan's top five TFT-LCD manufacturers possess different knowledge sources and technology focuses. This specialised capability is most likely the cause for their positions in the market (i.e. market share). Each player has unique patenting protocol, in which the coded knowledge (i.e. patenting rate) does not act as a major indicator of innovation performance in Taiwan's TFT-LCD industry. Remarkably, the public research institute does not show its essential impact on TFT-LCD industry as it once was in most East Asian latecomer literature. This study thus provides some useful managerial implications for latecomer firms to facilitate knowledge internalisation and build endogenous innovative capabilities.     

A dual measure of economies of scope

A derivative-based measure of economies of scope is obtained by exploiting the duality between the shadow cost function and the input distance function. This is a useful measure when the econometric estimation of a cost function is not viable.     

Stability of a crime level equilibrium

We consider crime level in an economic market with a supply of potential criminals. These criminals differ in their opportunity cost for committing crime, reflecting differences in the value of foregone opportunities such as performing productive labor. The realized demand is influenced by the expected value for crime, which depends on several socio-economic variables including wealth, police enforcement, and police arrest ability. After determining the equilibria level suggested by our approach, we propose a dynamic setup and study the stability of this system. Two critical enforcement levels are determined. Exceeding the lower enforcement threshold will push crime to stabilize (converge) to an equilibrium level. Correspondingly, exceeding the higher enforcement threshold will collapse the crime market to zero.     

On S-curves and tipping points

In his discussion in this journal of Kurzweil's The Singularity is Near, Modis criticizes Kurzweil's loose characterization of the “knee” of a growth curve. Likewise, the “tipping points” described by Gladwell (The Tipping Point) are clearly relevant to forecasting systems, but Gladwell did not mathematically identify such points. Both concepts refer to a point on the curve where growth accelerates dramatically and sustains itself. What can be said in a rigorous way about knees and tipping points in growth systems?The answer has to do with the number of parameters of the growth curve, and the (probabilistic) model underlying the growth curve. Using probability theory and computational experiments, this paper clarifies these points for the logistic and Bass curves (identifying an unambiguous tipping point for the latter), and explores the merits of a 3-parameter model of innovation adoption. It concludes that if forecasters are to deal scientifically with the now-established management notion of “tipping points,” a 3-parameter model is needed. The paper also resolves four minor but annoying paradoxes in the growth curve literature.     

Dynamics of social factors in technological substitutions

Diffusion models of technological innovations are often based on an epidemic structure which has a good fit to historical data but whose communication assumptions lack explanatory power. They assume a simplified decision process, uniform decision criteria across adopters categories, and a fully interconnected social structure. The objective of this paper is to show that the dynamics of social factors during technological substitutions have significant effects on substitution patterns. The success of a paradigmatic shift is not only a function of technological characteristics but also depends on change agents and many social dynamics. Such complexity requires analysis at several levels of granularity. We start with cognitive processes at the individual level using concepts from cognitive psychology and decision making under uncertainty and then move to interpersonal communications at the aggregate social level. We show that population heterogeneity generates different decision criteria and a social topology which greatly affect perceptions and the formation of expectations. The structure of interpersonal networks also explains how the relevance and credibility of information impact the critical mass dynamics of technology adoption. A more complete model accounting for social interactions provides a useful framework for understanding complex substitution patterns and reducing the risk of misreading the market.     

Knowledge transfer in an innovation simulation model

To understand the development of innovation processes in these knowledge-driven economies, one needs to focus on underlying processes of creating and sharing new knowledge. In this paper, an evolutionary simulation model is used to achieve some insights into these innovation processes. The model is based on the one hand on rules about market performance, investments and R&D strategies, and on the other hand on a model concerning knowledge creation (the ability of firms to create knowledge through intramural R&D efforts and the ability to discover and absorb new developments from basic academic research and competitors) and knowledge transfer based on an exponentionally expanding pool of (not necessarily new) knowledge of innovations in the own sector, but also from external sources. It is demonstrated that the imitative firm can be economically more successful but this strategy may prove to be superior only after a long time span.     

Building human-centered systems in the network society

This paper considers the development of selected projects which have been engaged in building information and communication networks in urban and regional environments, with the ultimate goal of developing networked places. It is argued that such networks have the potential to attract and mobilize people into a “culture of knowledge” and make public administration and free markets more effective, but require adequate infrastructures, incentives and institutional frameworks.The analysis builds on the co-evolution of human and social contexts at local levels and the endogenous process of technical change, namely in terms of information and communication technologies. We conclude that networked places should be designed holistically, adaptable to change and continuously assessed in order to accommodate humanity.The first generation digital cities have shown the need to build flexible and interoperable technological infrastructures, yet robust and user friendly, to support knowledge networks. The new paradigm of semantic grids may respond to the increasing complexity and heterogeneity of humanity and urban environments and support more effectively the creation and diffusion of knowledge networks to help mobilizing the information society and to promote the inclusive development of networked places.