3
The economy is not a container for technologies, but it arises from them.

4
“historians are naturally interested in how the world has formed itself.”
-> they are interested in process/evolution.

13
“This sort of contrast between known content and less-known principles is not rare.”

“we have no agreement on what the word “technology” means, no overall theory of how technologies come into being, no deep understanding of what “innovation” consists of, and no theory of evolution for technology.”

15
Definition evolution:
Two meanings

1. “the gradual development of something, as with the “evolution of ballet or the English madrigal. I will call this evolution in the narrow sense, or more usually “development”
2. “the process by which all objects of some class are related by ties of common descent from the collection of earlier objects. This is evolution in its full sense, and it is what I will mean by evolution.”

Without evolution we have the idea of the solitary genius.
“With evolution (if we can find how it works), new technologies would be birthed in some precise way from previous ones, albeit with considerable midwifing, and develop through some understood process of adaptation. In other words, if we could understand evolution, we could understand that most mysterious of processes: innovation.”

20
“The economy continually created the new by combining the old, and in doing so it disrupted itself constantly from within.”
-> Schumpeter

22
“I will call this mechanism evolution by combination, or more succinctly, combinatorial evolution.”

A second thing is needed: “the constant capture of new natural phenomena and the harnessing of these for particular purposes.”

23
“new technologies are constructed mentally before they are constructed physically”

His theory is built from blank state -> 3 fundamental principles:

1. “all technologies, are combinations. This simply means that individual technologies are constructed or put together – combined – from components or assemblies or subsystems at hand.”
2. “each component of technology is itself in miniature a technology.”
3. “all technologies harness and exploit some effect of phenomenon, usually several.

24
“[technologies are not] individual pieces of clockwork but [...] complexes of working processes that interact with other complexes to form new ones.”

“Technology builds itself organically from itself”

25
“Modern technology is not just a collection of more or less independent means of production. Rather it is becoming an open language for the creation of structures and functions in the economy.”

28f
Definition technology:

• technology-singular -> “a means to fulfill a human purpose” (computer, compression algorithm)
• technology-plural -> “an assemblage of practices and components” (electronics, biotechnology)
• technology-general -> “the entire collection of devices and engineering practices available to a culture” (technology is the hope for mankind, technology is what Silicon Valley is all about)

35
“Whether within a jet engine or a computer program, all parts mus be carefully balanced. [...] Each module or component must provide just the right power, or size, or strength, or weight, or performance, or data structure to fit with the rest. [...]
Together these various modules and their connections form a working architecture. To understand a technology means to understand its principle, and how this translates into a working architecture.”
-> This is what my PhD and entarch are doing!

37
“the partition of technologies increases with the extent of the market.”

“The modules of technology over time become standardized units.”

38
Definition recursiveness:
in mathematics, physics, computer science: “structures consist of components that are in some way similar to themselves.”

42
“In the real world, technologies are highly reconfigurable; they are fluid things, never static, never finished, never perfect.”

“There is no characteristic scale for technology.”
-> it can be a transistor or the Yamato.

47
“Phenomena are the indispensable source from which all technologies arise. All technologies, no matter how simple or sophisticated, are dressed-up versions of the use of some effect – or more usually, of several effects.”

49
“Phenomena are simply natural effects, and as such they exist independently of humans and of technology. They have no “use” attached to them. A principle by contrast is the idea of use of a phenomenon for some purpose and it exists very much in the world of humans and of use.”

50f
A technology “is a collection of [NEXT PAGE] phenomena captured and put to use.”

52f
A technology is a metabolism. It “becomes a complex of interactive [NEXT PAGE] processes – a complex of captured phenomena – supporting each other, using each other, “conversing” with each other, “calling” each other much as subroutines in computer programs call each other.”

53
“A technology is an orchestration of phenomena to our use.”

“Phenomena, I propose, are the “genes” of technology.”

54
“Biology programs genes into myriad structures, and technology programs phenomena to myriad uses.”

56
Definition purposed system:
All physical or non-physical means to purposes. -> He uses technology just to refer to the physical ones?

“phenomena are the source of all technologies and the essence of technology lies in orchestrating them to fulfill a purpose.”

64
“Stripped to its core structure, science is a form of technology.”

“Science and technology co-evolve in a symbiotic relationship.”

66
“There is a nice circle of causality here. We can say that novel phenomena provide new technologies that uncover novel phenomena; or that novel technologies uncover new phenomena that lead to further technologies.”

70
“What delineates a cluster of technologies is always some form of commonality, some shared and natural ability of components to work together.”

71
“A technology is invented; it is put together by someone. A domain – think of radio engineering as a whole – is not invented; it emerges piece by piece from its individual parts. A technology – an individual computer, say – gives a certain potency to whoever possesses it. A domain – the digital technologies – gives potential to a whole economy that can in time become transmuted into future wealth and political power.”

75
“An era does not just create technology. Technology creates the era.”

76
“And just as utterances in a language must be put together according to the rules of that language, so must designs be architected according to the rules of allowable combination in a domain.”

79
“One result of this heavy investment in a domain is that a designer rarely puts a technology together from considerations of all domains available. The artist adapts himself, Paul Klee said, to the contents of his paintbox.”

88
“So a technology is not a fixed thing that produces a few variations or updates from time to time. It is a fluid thing, dynamic, alive, highly configurable, and highly changeable over time.”

“Technology does not just offer a set of limited functions, it provides a vocabulary of elements that can be put together – programmed – in endlessly novel ways for endlessly novel purposes.”

89f
“[Innovation] was used [NEXT PAGE] by Schumpeter (confusingly, to my taste) to denote the porcess by which an invention is co-opted into commercial use. I will use the word in its popular sense of novelty in technology.”

91
Definition standard engineering:
Definition design:
“it is the planning, testing, and assembly of a new instance of a known technology”

93
“A design is a set of compromises.”

95
“Design and development is a very human process of organization and action.”

“a new project always poses a new problem.”

98
“as with language, intention comes first and the means to fulfill it – the appropriate combination of components – fall in behind it. Design is expression.”

101
“experience with different solutions and subsolutions steadily cumulates and technologies change and improve over time. The result is innovation.”

103
“The primary mechanism that generates building blocks is combination; Darwinian mechanisms kick in later, in the winnowing process by which only some of the solutions survive.”

“The solution that comes to dominate of course has to have merit, but may not necessarily be the best of those competing. It may have prevailed largely by chance.”

“This process of chance events, prevalence building further prevalence, and lock-in, is something I hae written about extensively before, so I will not go into further details here.” -> Arthur, WB ~ Competing Technologies

106
“novel purposed systems can arise nondeliberately as practices or conventions, solutions to some problem in the economy or society; and if useful they can go on to become components in wider systems.”
-> entarch? if useful becomes dominant?

107
“Darwin’s solution, as I have said, does not work for technology.”

109
“A change in principle then separates out invention – the process by which radically novel technologies arise – from standard engineering.”

115
“At the creative heart of invention lies appropriation, some sort of mental borrowing that comes in the form of half-conscious suggestion.”

116
“Just as a composer has in mind a main theme but must orchestrate the parts that will express it, so must the originator orchestrate the working parts that will express the main concept.”

122
“Invention at its core is mental association.”

123
“In fact, I do not believe there is any such thing as genius. Rather it is the possession of a very large quiver of functionalities and principles. Originators [inventors] are steeped in the practice and theory of the principles or phenomena they will use.”

125
“an invention tends to show up when the pieces necessary for it, and the need for it, fall into place.”

129f
“The mechanism [behind invention] is certainly not Darwinian; novel species in technology do not arise from the accumulation of small changes. They arise from a process, a human and often lengthy one, of linking a need with a principle (some generic use of an effect) that will satisfy it. This linkage stretches from the need itself to the base phenomenon that will be harnessed to meet it, through supporting solutions and subsolution And making it defines a recursive process. The process repeats until each subproblem resolves itself into one that can [NEXT PAGE] be physically dealt with. In the end the problem must be solved with pieces – components – that already exist (or pieces that can be created from ones that already exist). To invent something is to find it in what previously exists.”

130
“at bottom all inventions share the same mechanism: all link a purpose with a principle that will fulfill it, and all must translate that principle into working parts.”

131
“Typically the initial version of a novel technology is crude – in the early days it is sufficient that it work at all.”

“There is no neat separation between the origination of a technology and its development.”

132
“This is where Darwinian variation and selection really come in, in technology. The many versions of a technology improve in small steps by the selection of better solutions to their internal design problems.”
-> Darwin explains the survival of technologies, not their emergence?

134
“we need to think of a technology as an object – more an organism, really – that develops through its constituent parts and subparts improving simultaneously at all levels in its hierarchy.”

135
“to overcome limits, a technology will add subsystems or assemblies that (a) enhance its basic performance, (b) allow it to monitor and react to changed or exceptional circumstances, (c) adapt it to a wider range of tasks, and (d) enhance its safety and reliability.”

138
Definition lock-in:
“eventually there comes a time when neither component replacement nor structural deepening add much to performance. The technology reaches maturity. If further advancement is sought, a novel principle is needed. But novel principles cannot be counted on to arrive when needed. Even when they do, they may not easily replace the old one. The old design, the old principle, tends to be locked in.”

139
“Even if a novel principle is developed and does perform better than the old, adopting it may mean changing surrounding structures and organizations. This is expensive and for that reason may not happen.”

“The old principle lives on because practitioners are not comfortable with the vision – and promise – of the new. Origination is not just a new way of doing things, but a new way of seeing things.”

140
Definition adaptive stretch:
“When a new circumstance comes along or a demand for a different sphere of application arrives, it is easier to reach for the old technology – the old base principle – and adapt it by “stretching” it to cover the new circumstances.”

141
“At some point of development, the old principle becomes ever more difficult to stretch. The way is now open for a novel principle to get a footing. The old principle of course lingers, but it becomes specialized for certain purposes. And the new principle begins to elaborate.”

“Elaboration and simplicity alternate in a slow back and forth dance, with elaboration usually gaining the edge over time.”

143
“Development is very much an internal process. The whole of a technology and all of its parts develop simultaneously in parallel.”

155
“A new version of the economy slowly comes into being. The domain and the economy mutually co-adapt and mutually create the new.
It is this process of mutual change and mutual creation that we call a revolution.”

156
“the enabling technologies of digitization, the microprocessor and the Arpanet (the forerunner of the Internet), were available by the early 1970s, but again, their impact in digitizing the economy has still not been fully realized.”
-> Thesis!

157
“It is not enough that the base technologies of a revolution become available. A revolution does not fully arrive until we organize our activities – our businesses and commercial procedures – around its technologies, and until these technologies adapt themselves to us. For this to happen, the new domain must gather adherents and prestige. It must find purposes and uses. Its central technologies must resolve certain obstacles and fill certain gaps in its set of components. It must develop technologies that support it and bridge it to the technologies that use it. It must understand its base phenomenon and develop the theory behind these. Markets must be found, and the exisitng structures of the economy must be re-architected to make use of the new domain. And the old dispensation must recognize the new domain and become familiar with its inherent practices, which means that practicing engineers who command the grammar of the old need to retool themselves for the new. They do not do this lightly. All this must be mediated by finance, by institutions, by management, by government policies, and by the availability of people skilled in the new domain.
Thus this process is paced not by the time it takes people to notice the different way of doing thins and adopt it, but rather by the time it takes existing structures of the economy to re-architect themselves to adapt to the new domain. This time is likely to be decades, not years. And during this time the old technology lives on. It persists despite its demonstrated inferiority.”

158
“It is not sufficient that businesses and people adapt to a new body of technology. The real gains arrive when the new technology adapts itself to them.”

159
“Deep craft is more than knowledge. It is a set of knowings. Knowing what is likely to work and what not to work. Knowing [blah blah blah].”

161
“once a region – or country for that matter – gets ahead in an advanced body of technology, it tends to get further ahead. Success brings success, so that there are positive feedbacks or increasing returns to regional concentrations of technology.”

162
“This is why countries that lead in science lead also in technology. And so if a country wants to lead in advanced technology, it needs to do more than invest in industrial parks or vaguely foster “innovation.” It needs to build its basic science without any stated purpose of commercial use.”
-> He really likes science.

163
The way individual technologies develop is focused, concentrated, and rational. Domains develop slowly, organically, and cumulatively.

164
“Innovation is not something mysterious. Certainly it is not a matter of vaguely invoking something called “creativity.” Innovation is simply the accomplishing of the tasks of the economy by other means.”

“innovation emerges when people are faced by problems – particular, well-specified problems. It arises as solutions to these are conceived of by people steeped in many means – many functionalities – they can combine.”

“a new domain of significance (think of the digital one) is encountered by all industries in an economy. As this happens, the domain combines some of its offerings with arrangements native to many industries. The result is new processes and arrangements, new ways of doing things, not just in one area of application but all across the economy.”

168
“Novel technologies are therefore brought into being – made possible – from some set of existing ones. Always.”

170
“technology is autopoietic (“self-creating,” or “self-bringing-forth,” in Greek).”
“the value of technology lies not merely in what can be done with it but also in what further possibilities it will lead to. The technologist Andy Grove was asked once what the return on investment was for internet commerce. “This is Columbus in the New World,” he answered. “What was his return on investment?”

174
“The presence of opportunity niches calls novel technologies into existence.”

175
“[Human needs] depend delicately and delightfully and intricately upon the state of society, and they elaborate as societies prosper. And because societies prosper as their technologies build out, our needs grow as technology build out.”

177
“We can think of [the economy] as a system that determines costs and prices and therefore signals oportunities to be fulfilled by novel elements, as well as deciding which candidate technologies will enter the active collection.

178f
“We can start by supposing that a candidate novel technology appears. It has been made possible by a combination of previous technologies and has bested its rivals for entry into the economy. Six events or steps then follow. [...]

1. The novel technology enters the active collection as a novel element. It becomes a new node in the active collection.
2. The novel element becomes available to replace existing technologies and components in existing technologies.
3. The novel element sets up further “needs” or opportunity niches for supporting technologies and organizational arrangements. [NEXT PAGE]
4. If old displaced technologies fade from the collective, their ancillary needs are dropped. The opportunity niches they provide didsappear with them, and the elements that in turn fill these may become inactive
5. The novel element becomes available as a potential component in further technologies – further elements.
6. The economy – the pattern of goods and services produced and consumed – readjusts to these steps. Costs and prices (and therefore incentives for novel technologies) change accordingly.

180
“Collapses caused further collapses in a backward succession. This is not quite the same as Schumpeter’s “gales of creative destruction,” where novel technologies wipe out particular businesses and industries broadly across the economy. Rather, it is a chain of domino-like collapses – avalanches of destruction, if you prefer to call them that.
The creative side to this is, as Schumpeter pointed out, that new technologies and industries take the place of those that collapse. We can add to this that new technologies can as easily set up new opportunity niches to be occupied by further new technologies, which set up further niches, to be occupied by yet further technologies. There are also avalanches – should we call them winds – of opportunity creation.
All this activity is going on at many points in the network at the same time. Like the buildout of species in the biosphere, it is a parallel process, an there is nothing orderly about it.” -> the list above is not as orderly as it seems

181
He describes his algorithm of the evolution of technology.
“as first, progress is slow.”
“The overall collective of technology always increases. But the active set varies in size, showing we would expect, a net increase over time.”

186
“This does not mean the evolution of technology is completely random. The pipeline of technologies coming in the next decade is reasonably predictable.
-> technological evolution is path-dependent -> near future is predictable -> far future not at all

187
“Change begets spates of change, and between these, quiescence begets quiescence.”

188
“In biology, combinations [as in combinatorial evolution] do form, but not routinely and by no means often, and not by the direct mechanisms we see in technology. Variation and selection [Darwin] are foremost, with combination happening at very occasional intervals but often with spectacular results.”

“In technology, combinatorial evolution is foremost, and routine. Darwinian variation and selection are by no means absent, but they follow behind, working on structures already formed.”

189
“By these criteria [in systems language] technology is indeed a living organism. But it is living only in the sense that a coral reef is living. At least at this stage of its development – and I for one am thankful for this – it still requires human agency for its buildout and reproduction.”

192
Definition economy / economics:
“I will define the economy as the set of arrangements and activities by which a society satisfies its needs. (This makes economics the study of this.)

193
“The economy is an expression of its technologies.”

193f
“The economy forms an ecology for its technologies, it forms out of them, and this means it does not exist separately. And as with an ecology, it forms opportunity niches for novel technologies and fills these as novel technologies arise.
This way of thinking carries consequences. It means that the [NEXT PAGE] economy emerges – wells up – from its technologies. It means that the economy does more than readjust as its technologies change, it continually forms and re-forms as its technologies change. And it means that the character of the economy – its form and structure – change as its technologies change.”

194
“Normally we do not see this technology-creating-the-economy-creating-technology. In the short term of a year or so the economy appears given and fixed; it appears to be a container for its activities. Only when we observe over decades do we see the arrangements and processes that form the economy coming into being, interacting, and collapsing back again.”

196
“The whole moves forward in a sequence of problem and solution – of challenge and response – and it is this sequence we call structural change.”

197f
“Structural change is fractal, it branches out [NEXT PAGE] at lower levels, just as an embryonic arterial system branches out as it develops into smaller arteries and capillaries.”

199
“Technology determines the structure of the economy and thereby much of the world that emerges from this, but which technologies fall into place is not determined in advance.”

“within this stasis lie the seeds of its [the economy's] own disruption, as Schumpeter pointed out a hundred years ago.”

“From within, the system is always poised for change.”

199f
“The economy therefore exists always in a perpetual openness of change – in perpetual novelty. It exists perpetually in a process of [NEXT PAGE] self-creation. It is always unsatisfied.”

200
“The result is change begetting change.”

“Stated as a general rule, every technology contains the seeds of a problem, often several. This is not a “law” of technology or of the economy, much less one of the universe. It is simply a broad-based empirical observation – a regrettable one – drawn from human history.”

201
“The economy therefore arises ultimately out of the phenomena that create technology; it is nature organized to serve our needs.”
“The economy therefore is not a homogeneous thing. It is a structure – a magnificent structure – of interacting, mutually supporting arrangements, existing at many levels, that has grown itself from itself over centuries.”

202
“Economics as a discipline is often criticized because, unlike the “hard sciences” of physics or chemistry, it cannot be pinned down to an unchanging set of descriptions over time. But this is not a failing, it is proper and natural. The economy is not a simple system’ it is an evolving, complex one, and the structures it forms change constantly over time.”

209
“The economy, in a word, is becoming generative. Its focus is shifting from optimizing fixed operations into creating new combinations, new configurable offerings.
For the entrepreneur creating these new combinations in a startup company, little is clear.”
“The environment that surrounds the launching of a new combinatorial business is not merely uncertain; particular aspects of it are simply unknown.”

209f
“In this situation the challenge of [NEXT PAGE] management is not to rationally solve problems but to make sense of an undefined situation – to “cognize” it, or frame it into a situation that can be dealt with – and to position its offerings accordingly. Again here is a seeming paradox. The more high-tech technology becomes, the less purely rational becomes the business of dealing with it.”

210
“In the generative economy, management derives its competitive advantage not from its stock of resources and its ability to transform these into finished goods, but from its ability to translate its stock of deep expertise into ever new strategic combinations.”

211
“as a more technological economy comes to the fore, we are shifting from the machine-like economy of the twentieth century with its factory nodes and input-output linkages to an organic, interrelated economy of the twenty-first century. Where the old economy was a machine, the new one is a chemistry, always creating itself in new combinations, always discovering, always in process.”

“Order, closedness, and equilibrium as ways of organizing explanations are giving way to open-endedness, indeterminacy, and the emergence of perpetual novelty.”

213
“Messy vitality, says Venturi; and richness of meaning. Yes. I too am wholeheartedly for these.”
-> Me too.

214
“These two views, that technology is a thing directing our lives, and simultaneously a thing blessedly serving our lives, are simultaneously valid. But together they cause an unease, an ongoing tension, that plays out in our attitudes to technology and in the politics that surround it.”

215
“for all human existence we have been at home in nature – we trust nature, not technology. And yet we look to technology to take care of our future – we hope in technology. So we hope in something we do not quite trust. There is an irony here. Technology, as I have said, is the programming of nature, the orchestration and use of nature’s phenomena. So in its deepest essence it is natural, profoundly natural. But it does not feel natural.”

216
“Thus our reaction to technology as represented unconsciously in popular myth does not reject technology.”

“our unconscious makes a distinction between technology as enslaving our nature versus technology as extending our nature.”

24f
“‘When I was a boy … in front of every house in the summer evenings you would find young people together singing the songs of the day or the old songs. Today you hear these infernal machines going night and day. We will not have a vocal cord left. The vocal cords will be eliminated by a process of evolution, as was the tail of man when he came from the ape.’” He quotes somebody.

259
Darwinism is “a broad theoretical framework for the analysis of the evolution of all open, complex systems, including socio-economic systems.”

278
“In short, Darwinism provides a compelling ontology, it is a universal metatheory in which specific theories must be nested, and it is a rich but optional source of analogy. If the arguments here concerning ontology and Universal Darwinism are correct, then on some of these questions the social scientist has no option but to be Darwinian. However, Darwinism does not provide complete explanations of socio-economic phenomena. Something more is required. The social cannot be reduced to the biological. Darwinism may be universal but economics should not be abandoned to biology.“

92

Business Consultant BS! Can’t read.

After industry and services we’re not moving towards information but experience => hence Experience Economy

4
Definition-entrepreneurship:
“Entrepreneurship is an activity that involves the discovery, evaluation and exploitation of opportunities to introduce new goods and services, ways of organizing, markets, processes, and raw materials through organizing efforts that previously had not existed (Venkataraman, 1997; Shane and Venkataraman, 2000).”

8
“the entrepreneurial process requires some form of innovation. By innovation, I do not mean that all entrepreneurial efforts require the grand Schumpeterian (1934) innovations that result in new combinations that spur creative destruction. [...] the entrepreneurial process can involve a type of innovation that is much milder, such as placing a restaurant on a different corner of an intersection from existing restaurants, or using different recipes or employees in a new restaurant in the same location as an old one. [for example Venkataraman, 1997] pointed out that this milder form of innovation is often associated with Kirznerian (1997), rather than Schumpeterian, entrepreneurial opportunities.
However, even Kirznerian opportunities involve innovation. By definition, entrepreneurship cannot involve the perfect imitation of what has been done before. The simple fact that it involves the recombination of resources into a new form according to the judgment of the entrepreneur means that entrepreneurship involves some innovative activity.”

10
“The conceptual framework that underlies this book is quite straightforward. Because the economy operates in a continual state of disequilibrium and change, situations arise in which people can transform resources into a form (new goods and services, new ways of organizing, new methods of production, new markets or new materials) that they believe will have greater value than their cost to create (Venkataraman, 1997). The entrepreneurial process begins with the perception of the existence of opportunities, or situations in which resources can be recombined at a potential profit. Alert individuals, called entrepreneurs, discover these opportunities, and develop ideas for how to pursue them, including the development of a product or service that will be provided to customers. These individuals then obtain resources, design organizations or other modes of opportunity exploitation, and develop strategies to exploit the opportunities.”

Film history, not economics. But describes the industry beginnings.

10
“Although the technical novelty of moving pictures was enough to thrill the first audiences, producers soon realized that if business was to continue, a steady supply of fresh films was required.”

“[Edison] instituted a series of patent infringement suits in December 1897 against nearly every organization and individual of consequence that had entered the business.”

18
“[...] the movies [and with them nickelodeons] did not remain the province of the working class for long.”

20
“The records of the Biograph Company reveal that in the period 1900-1906, the studio produced more nontheatrical subjects than dramatic films, 1,035 and 774, respectively. By 1908, however, the industry concentrated its production efforts on narratives almost exclusively.”

“Narratives [...] offered the advantage of regularizing and stabilizing production.” Not like docos or news: if there was not news, there was nothing to show; and cameramen had to travel to the news, which was costly.

23
“Edison wanted the entire pie for himself.” He was ruthless, his aim a monopoly with him as king. The other companies weren’t much better, though.

24
“the patent wars seriously hampered expansion of the industry.” People were making money, but the situation was unsure. So nobody invested in anything. Small companies simply “closed their doors.” Barriers to entry had been created.

25
“Edison and Biograph declared a truce in summer 1908, and formed the Motion Picture Patents Company. By joining forces they could now control the industry without a doubt.”

911
“How does a new industry and its institutional rules and competitive dynamics emerge and then change?”

“A co-evolutionary approach examines change over time by using multiple levels of analysis, multidirectionality, the role of positive feedback, and the importance of historical context (Lewin and Volberda 1999).”

912
“A co-evolutionary process marrying insights from institutional and resource-based views provides the conceptual base for this study. Institutional theory reveals how entrepreneurs’ careers are embedded in social systems (e.g. Baum and Dutton 1 996; Dacin et. al. 1 999) and ‘serve as the primary conduit by which larger social conditions become incorpo­rated into organizational strategy and structure’ (Boeker 1988: 35).”

“When many firms or a few dominant firms commit themselves to certain practices, despite alternatives, they initiate an industry’s trajectory. In co-evolutionary terms, institutional theory enhances our understanding of initial conditions (i.e., how entrepreneurs’ career history affects current firm practices through retention processes) and feed forward (i.e. how entrepreneurs’ strategic choices carve an indus­try’s future through selection processes) (Levinthal and Myatt 1994). Institutional theory explains where firm strategies and practices come from and how competitive moves and resource claims take place within a spe­cific institutional context.”

Definition-resource-based view:
“A resource-based view complements an institutional perspective (Oliver 1997). A resource-based view explains how firms erect barriers to imita­tion, based on either property rights or knowledge (Miller and Shamsie 1996).”

“When these barriers create above average returns for a firm, they are called strategic isolating mechanisms, which ‘make competitive positions stable and defensible’ (Rumelt 1984: 567; Mahoney and Pandian 1992).”

913
“The American film industry is well suited for studying co-evolutionary processes because it experienced a shift from being technology-driven to content-driven.”
-> The same will happen to the EA industry! A little differently though: there is no patentable technology yet, it’s the newness at the moment. But a shift to content will happen sooner or later.

“there is a wealth of archival data due to the intense efforts by the American Film Institute and historians to archive all available information from the industry’s inception to its pre­ sent day. This reduces, if not eliminates, left censoring problems that plague most studies of new industries (Aldrich 1999).”

914
“New industries do not emerge de nouveau; they arc shaped by extant social institutions, social trends that create new opportunities, and by entrepre­neurs who both open up and cultivate those opportunities. Several theoret­ical perspectives illuminate how new industries emerge. Evolutionary scholars argue that entrepreneurs must generate legitimacy at multiple lev­els for their novel activities (e.g. Aldrich and Fiol 1994; Hunt and Aldrich 1998; Aldrich 1999). Resource-based scholars argue that industry emer­gence and change is intimately related to capabilities of firms comprising the industry (e.g. Collis 1990; Levinthal and Myatt 1994). Neo-institutional scholars focus on field formation and trace how entrepreneurs’ interests, networks (e.g. Stern 1979; DiMaggio 1991) and use of cultural, and his­torical elements create and alter institutional trajectories (e.g. Leblebici et al. 1991; Holm 1995).”

“Changes in social and economic conditions open up opportunities that allow entrepreneurs to blossom (Peterson and Berger 1971). For example, Hoffman (1999) shows that disruptive events became opportunities to re­negotiate how environmental management was enacted. Entrepreneurs cul­tivate these opportunities by applying their repository of knowledge and relationships gained through their careers (Bird 1994), which are sequences of work experiences (Arthur et al. 1989).”

915
“Institutional isolating mechanisms are revealed when entrepreneurs are reluctant to alter their capabilities, especially in dynamic environments (Oliver 1996, 1997). Capabilities generate barriers to imitation when knowledge about resource conversion processes is is ambiguous or socially complex (Reed and DeFillippi 1990; Miller and Shamsie 1996).”
-> The environment of film has become dynamic, but film people often do not want to alter their capabilities.
-> Interview partners have capabilities that few others have in the complex EA environment -> competition is slow to emerge.

916
“By 1920, eight of the ten major technology players who had dominated the early industry between 1895 and 1910 were bankrupt or had exited the industry.”

“industry consolidation by major content players, once the battles for dominance between technology and content firms had been resolved.”

917
“Since I am concerned with tracing how entrepreneurs’ knowledge and net­works, captured by a career history, co-evolve with an industry, multiple firm foundings by the same entrepreneur were counted as one firm found­ing.”

918
“To situate the film industry within its historical context, as co-evolution­ary (Lewin and Volberda 1999) and evolutionary (Aldrich 1999; Romanelli 1989) analyses demand, an overview of the industry is provided.”
-> Does thesis need an industry overview? Is chapter 1 enough?

“The emer­gence of the industry focused on resolving technical challenges and devel­ oping hardware for the industry; this focus shifted to movie content”

918f
“The American film industry experienced two distinct periods and two groups of entrepreneurs were critical to each time period. These two groups battled for control over the industry from 1911 to 1917. This period shift from technology-driven to content-driven influenced all firms in the film population”

919
“When the industry began, entrepreneurial efforts were directed towards solv­ing technical challenges and developing hardware. This defined industry insti­tutional rules, and shaped competitive dynamics among firms. As technology was refined and hardware standardized, audience interest in the new medium grew. Entrepreneurial challenges shifted to developing techniques for, and providing high-quality film content. This shift required different competen­cies, defined new competitive dynamics and altered institutional rules. A key event marking the shift from technology to content was the production and release of the first American feature film, The Life of Moses, released in five parts between December 1909 and January 1910 (AFI Catalog, 1911-1920: xv).”

“The content period had greater national eco­nomic prosperity and industry growth than did the technology period.”
-> If EA wants to become big, they have to create more compelling content instead of just newness.

921
“In emerging industries, a key strategy of entrepreneurial firms is negotiat­ing and gaining legitimacy, because it enhances not only firm, but indus­try survival.”

923
“Law suits amongst industry players negotiated rules of play, defining who could play and what constituted a viable barrier to imitation in the industry.”

925
“nickelodeons attracted and were associated with ghetto dwellers – immigrants and blue-collar workers [not true, see Balio, T; 1985; Novelty blah] (Merritt 1987). This shift in movie exhibition outlets and audience membership altered social atti­tudes towards film from technological awe (Musser 1990) to concerns that movie houses were ‘recruiting stations of vice’ (Bowser 1 994). The peri­odical, Moving Picture World, noted, in 1909, that, since 1905, ‘the mov­ing picture business occupied in public esteem a position so offensive, so contemptible, and in many respects so degrading that respectable people hesitated to have their names associated with it’ (quoted in Bowser 1994: 37). A challenge, therefore, from 1905 onwards, for content entrepreneurs, especially immigrants, was to legitimize film as an acceptable rather than suspect activity of ghetto dwellers, and to legitimize their participation in a new country and a new industry.”

“The legitimacy strategy of immigrant content entrepreneurs was cultural rather than regulatory. They imitated the high culture symbols and formats of Broadway theatres to evoke accepted cognitive heuristics from con­sumers, such as providing uniformed ushers, plush chairs, two-hour shows, and elaborate buildings (Balio 1985). When these firms moved into pro­duction and distribution, they used similar tactics.”

“Content firms, founded primarily by immigrants, built the industry’s consumer base by establishing the legitimacy of film as a form of entertainment.”
-> EA has to do the same.

“Legitimacy was critical to firms, since, between 1895 and 1920, 60 percent died within their first year of commercial life.”

926
“the competitive dynamics for content-era firms were higher rates of entry and shorter lives.”
-> It would be logical for this to be true for EA as well.

“Skilled content entrepreneurs learned from first movers’ mistakes and were able to leapfrog competition by utilizing cul­tural symbols more effectively.”

929
“Technology entrepreneurs’ legitimacy claims and strategic isolating mechanism s were based on patents, lawsuits, and finally on pooling their patents into a technology cartel. Content entrepreneurs’ legitimacy strategies involved cultural symbols to evoke consumer acceptance and interest. These different legitimacy strate­gies demanded distinct resources and firm capabilities”

“dominant technology firms came from manufacturing careers and imported an economizing logic of action. In con­trast,content firms came from retail careers and imported a marketing logic.”

930
“Edison posted an agent in London who purchased European competitors’ originals, mainly those of Melies and Pathe Freres, shipping them to Edison to be duped [copied and sold as one's own] before the foreign manufacturer could market the films in the United States (Balio 1985; Musser 1991 : 239).”

933
“content entrepreneurs perceived talent rather than technology as their key resource and developed organizational capabilities and systems for managing talent.”

934
“Feature film, as a new product, spurred the co-evolution of value chain governance, industry rules of play, and competitive dynamics, all of which were significantly different from those based on film as a commodity prod­uct. Entrepreneurs participated in this co-evolution.”

935
“By 1927, the United States was supplying 90 percent of the motion pictures watched by consumers outside the United States (Halsey et al. 1985: 200).”

“Content firms developed control over distribution channels and capabilities in film genres that were easily understood and appealed to diverse audiences. These became a major source of national competitive and sustainable advantage for the United States.”

“Entrepreneurs’ careers are a repository of knowledge and networks that provide institutional resources (i.e., cultural models, rules of thumb, structural positions, and socio-political legitimacy) and important insights into firm practices, such as the legit­imacy strategies pursued, the resources perceived as valuable, and the capabilities developed. These firm practices generated differential outcomes in terms of market share and survival rates between technology and con­tent-era firms.”

“In the technology era, the regulatory legitimacy of patents and patent infringement suits inhibited new entrants by raising barriers to entry. Indeed, new entrants did not emerge until patent litigation had been resolved. In contrast, content-era firms used cultural legitimacy strategies by mimicking high culture, which legitimized the industry and lowered barriers to entry, thereby encouraging new entrants. Content-era firms were not able to stem the inflow of new entrants until they discovered the importance of locking up talent in long-term contracts and controlling the value chain through vertical integration.”

936

937
“By understanding entre­preneurs’ careers, we may be in a better position to predict shifts in an industry that may render current capabilities disadvantageous.”

938
“By waiting for uncertainty to lessen, entrepre­neurs entered the industry when institutional rules of play and competitive dynamics had already been contested and negotiated. Thus, newly entering firms had less leverage in co-evolving the industry to meet their own needs.”

939
“Strategic iso­lating mechanisms influenced industry trajectories by providing positive feedback on firm practices.”
What firms do shapes the industry and therefore other firms. Quite logical.

Talks about the filmic experience. In a sense, the approach is similar to mine from confirmation where I re-appropriated the term cinema experience.

65
“It is clear that cinema, in widening its definition, risks losing its specificity.”

66
“This is why I would argue that filmic experience will survive: in order to allow the spectator of media to be involved in a truly exploratory way, in order to force eyes and ears to be opened as they are nowhere else.”

377
“The difference [between the evolutionary and the pre-evolutionary sciences] is a difference of spiritual attitude or point of view in the two contrasted generations of scientists.”
“The modern scientist is unwilling to depart from tie test of causal relation or quantitative sequence. When he asks the question, Why? He insists on an answer in terms of cause and effect. He wants to reduce his solution of all problems to terms of the conservation of energy or the persistence of quantity.”

380
“The penalties for failure to apprehend facts in dispassionate terms fall surer and swifter.”

381
“There is no abrupt transition from the pre-evolutionary to the post-evolutionary standpoint.”
“The process of change in the point of view, or in the terms of definitive formulation of knowledge, is a gradual one; and all the sciences have shared, though in an unequal degree, in the change that is going forward. Economics is not an exception to the rule, but it still shows too many reminiscences of the “natural” and the “normal,” of “verities” and “tendencies,” of “controlling principles” and “disturbing causes,” to be classed as an evolutionary science.”

383
“He [the theorist] is also enabled, without misgivings, to construct a theory of such an institution as money or wages or land-ownership without descending to a consideration of the living items concerned, except for convenient corroboration of his normalized scheme of symptoms.”

384
“In all this the agencies or forces causally at work in the economic life process are neatly avoided. The outcome of the method, at its best, is a body of logically consistent propositions concerning the normal relations of things – a system of economic taxonomy. At its worst, it is a body of maxims for the conduct of business and a polemical discussion of disputed points of policy.”
“In all this, economic science is living over again in its turn the experiences which the natural sciences passed through some time back. In the natural sciences the work of the taxonomist was and continues to be of great value, but the scientists grew restless under the reginie of symmetry and system-making. They took to asking why, and so shifted their inquiries from the structure of the
coral reefs to the structure and habits of life of the polyp that lives in and by them.”

385f
“In the days of the early classical writers economics had a vital interest for the laymen of the time, because it formulated the common sense metaphysics of the time in its application to a department of human life. But in the hands of the later classical writers the science lost much of its charm in this regard.”

386
“For the purpose of economic science the process of cumulative change that is to be accounted for is the sequence of change in the methods of doing things,- the methods of dealing with the material means of life.”

387f
“The physical
properties of the materials accessible to man are constants: it is the human agent that changes,- his insight and his appreciation of what these things can be used for is what develops.”

388
“The changes that take place in the mechanical contrivances are an expression of changes in the human factor. Changes in the material facts breed further change only through the human factor. It is in the human material that the continuity of development is to be looked for; and it is here, therefore, that the motor forces of the process of economic development must be studied if they are to be studied in action at all. Economic action must be the subject-matter of the science if the science is to fall into line as an evolutionary science.”

389f
“The psychological and anthropological preconceptions of the economists have been those which were accepted by the psychological and social sciences some generations ago. The hedonistic conception of man is that of a lightning calculator of pleasures and pains, who oscillates like a homogeneous globule of desire of happiness under the impulse of stimuli that shift him about the area, but leave him intact. He has neither antecedent nor consequent. He is an isolated, definitive human datum, in stable equilibrium except for the buffets of the impinging forces that displace him in one direction or another. Self-poised in elemental space, he spins symmetrically about his own spiritual axis until the parallelogram of forces bears down upon him, whereupon he follows the line of the resultant. When the force of the impact is spent, he comes to rest, a self-contained globule of desire as before. Spiritually, the hedonistic man is not a prime mover. He is not the seat of a process of living, except in the sense that he is subject to a series of permutations enforced upon him by circumstances external and alien to him.”

390f
“The later psychology, re-enforced by modern anthropological research, gives a different conception of human nature. According to this conception, it is the characteristic of man to do something, not simply to suffer pleasures and pains through the impact of suitable forces. [...] His methods of life to-day are enforced upon him by his habits of life carried over from yesterday and by the circumstances left as the mechanical residue of the life of yesterday.”

393
“From what has been said it appears that an evolutionary economics must be the theory of a process of cultural growth as determined by the economic interest, a theory of a cumulative sequence of economic institutions stated in terms of the process itself.”

395
“The well-worn paths are easy to follow and lead into good company. Advance along them visibly furthers the accredited work which the science has in hand. Divergence from the paths means tentative work, which is necessarily slow and fragmentary and of uncertain value.”

396
“the economists themselves are beginning to feel the unreality of their theorems about “normal” cases. Provided the practical exigencies of modern industrial life continue of the same character as they now are, and so continue to enforce the impersonal method of knowledge, it is only a question of time when that (substantially animistic) habit of mind which proceeds on the notion of a definitive normality shall be displaced in the field of economic inquiry by that (substantially materialistic) habit of mind which seeks a comprehension of facts in terms of a cumulative sequence.”

397
“Under the stress of modern technological exigencies, men’s every-day habits of thought are falling into the lines that in the sciences constitute the evolutionary method; and knowledge which proceeds on a higher, more archaic plane is becoming
alien and meaningless to them. The social and political sciences must follow the drift, for they are already caught in it.“