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Journal Article

IC and Knowledge Formation by Hidden Structures … Long Term Costs of new Technology and Participative Design  pp221-235

Klaus Bruno Schebesch

© Sep 2011 Volume 9 Issue 3, ECIC 2011, Editor: Geoff Turner and Clemente Minonne, pp181 - 295

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Many innovative businesses formed around energy or bio‑related activities, for instance, are often the result of collective action of organisations involved in many‑sided markets, which can be found in and around focusing environments such as business incubators or tech¬no¬logy centres. Within such environments, group interests beyond those of single producers and their immediate clients exist and interfere. Rather generically, important economic outcomes of innovations are se¬quen¬ces of cost reduc¬¬tion events, the pace of which is influenced by technology and networking alike. Moreover, new products or technologies are producing long term costs difficult to anticipate, which eventually, in response to private and public awareness and knowledge formation, will have to be inter¬nalized. More traditional industries like textiles rely in general on conservative business models and use new technology in rather restricted ways. Product design is fashion orien¬ted and there¬fore predominantly “artistic” in nature, distribution channels are directed towards out¬lets facilitating physical contact of clients with the produce. New technology enters main¬ly via more mechanized production cycles for a given set of narrowly defined final products. The formation of Intellectual Capital (IC) in such industries is a slow. The presence of low creativity products indicates underutilization of both new product concepts and tech¬nological possi¬bilities. Participative design procedures for new product concepts using appropriate eCommerce features point here towards a way out. Such features include well adapted recommender systems based on trust creation and opinion formation. We propose to model the effects of these long term costs of new technology and the possibly complementary effects of participative design procedures by economic agents acting within specific adaptable neighbourhoods and by formation of some trust related assets. Thereafter, the influ¬ence exerted between firms is increasing in firm similarity, in the degree of product complementarity, and it also depends on (mutual) trust relations. A sustainable innovation is more expensive than a regular one but it may lead to long term benefits and to durable competitive advantage, espe¬cially if many firms from the network collude. The associated opinion formation process which leads to sustainable innovation may be viewed as a collec¬tive cognitive process resem¬bling that of branding and re‑branding. A similar trust‑based opinion formation is also regarded as part of a pro¬ce¬dure for assessing the acceptance of many new or parallel product concepts as they derive from Participative design procedures anticipating future product uses. Stylized dynamic models, which entail an opinion formation process, can in turn be identified with different levels of sustainability commitment by innovating and imitating firms within a dynamic multi‑firm setting. Such models tend to display the statistical behaviour of some aggregates known to occur in empirical innovative processes.


Keywords: IC and learning, long term environmental costs, opinion and trust formation, participative design and innovation networks, sustainability, recommender systems


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