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Paper to be presented at the DRUID 2011 on INNOVATION, STRATEGY, and STRUCTURE - Organizations, Institutions, Systems and Regions at Copenhagen Business School, Denmark, June 15-17, 2011 Technology Policy
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Paper to be presented at the DRUID 2011 on INNOVATION, STRATEGY, and STRUCTURE - Organizations, Institutions, Systems and Regions at Copenhagen Business School, Denmark, June 15-17, 2011 Technology Policy Learning and Innovation Systems Life Cycle: the Canadian Aircraft Industry Majlinda Zhegu Université de Québec à Montréal Management et technologie Johann Vallerand Abstract This study aims to bridge the literature regarding organizational learning and the system of innovation perspective. This paper explores the co-evolution of industrial technology policy learning and the innovation systems life cycle. Firstly, the main findings on organizational learning attributes are presented. Secondly, the process of public policy learning is discussed. Finally, a life cycle approach for analyzing technology policy learning is presented for the Canadian aerospace industry. By discerning the complimentary factors among differing theoretical perspectives, this paper provides a better understanding of the process and evolution of technological policy. Jelcodes:O32,M10 Technology Policy Learning and Innovation Systems Life Cycle: the Canadian Aircraft Industry Abstract This study aims to bridge the literature regarding organizational learning and the system of innovation perspective. This paper explores the co-evolution of industrial technology policy learning and the innovation systems life cycle. Firstly, the main findings on organizational learning attributes are presented. Secondly, the process of public policy learning is discussed. Finally, a life cycle approach for analyzing technology policy learning is presented for the Canadian aerospace industry. By discerning the complimentary factors among differing theoretical perspectives, this paper provides a better understanding of the process and evolution of technological policy. 1 1) Introduction Two primary observations drive the focus of this study regarding the links between technology policy learning and innovation system life cycle. On one hand, technology and innovation policies are the linchpin of innovation and developing national competence and, therefore, are the principal reason for variation in innovative between countries. On the other hand, the increasing complexity of the R&D activity combined with the very rapid pace of technological change amplifies the scale and scope of adjustments of all participants in technological innovation. Hence, the success of an innovation system relies on the learning capabilities of its constituents (Lundval and al, 2010). Meanwhile, it is recognized that the most important elements of innovation systems are dependent on the learning capabilities of individuals, organizations, and regions; crucial details of their capacity and ability to learn are lacking (Lundval et al. 2002, p. 224). In the case of technological policies, the need for an in-depth understanding of learning content, processes, and mechanisms is even more compelling. Government has undertaken the multiple and complex task of generating, orienting, coordinating, diffusing, and regulating innovation activity. Furthermore, in a context of global interdependences, it has become imperative to design and pursue a more sophisticated and dynamic public support of innovation. Evidence of successful public policies corroborates the thesis that government s principal role «...is not the quest for avoid overarching institutional preconditions for growth or uniform, inflexible policy recipes. The evolutionary account rests on the sort of congruence conditions between ingredients and processes wherein feature prominently the matching or mismatching between capabilities accumulation and the institutions governing the distribution of information and the incentive structures of any one economy (Cimoli et al. 2009, p. 5)». This in turn leads to the question: What are the attributes of technological policy learning and its evolution within a national innovation system context? The following section provides defines the main characteristics of organizational learning. Then, the building blocks of technology policy learning are identified as well as the similarities and differences between learning in public versus private organizations. In the third section, the dynamic nature of technological policy learning is discussed and a framework proposed that considers the technology policy learning in the context of the innovation system life cycle. The empirical research is based in a diachronic analysis of the 2 technological «catch-up» and «keep-up» of Canadian technology policies in the aerospace sector. 2) Organizational learning: definition and attributes Even if learning is a recurrent theme in many theoretical perspectives, no general theory of organizational learning and no set of best practices have emerged yet. Economics, sociology, political, historical, and management studies offer valuable insights on the premises, contextual factors, sources, types, and levels of organizational learning. Most of these insights are complementary in understanding the various aspects of the organizational learning. But, often, the basic assumptions and the angles of examination adopted by each theoretical perspective vary greatly and sometimes may also be in contradiction with those adopted by the others. Therefore, it is necessary to combine the insights from the different theoretical perspectives on organizational learning. With this in mind, in the following session, we revisit the definition of organizational learning and draw attention to its main salient features. 2.1 Definition of the organizational learning For the purpose of this research, organizational learning is defined as the process of exploring and exploiting internal and external new knowledge with the purpose of maintaining or improving the performance of the organization. This definition emphasizes organizational learning as a sustained phenomenon which generates gradual changes reflected by successful organizational transformation and improved actions through better knowledge and understanding (Fiol and Lyles, 1985, Auluck, 2002). The competitive advantage of an organization is grounded on the process of generation, capturing, and applying critical new knowledge. This learning process relies on the organizational absorptive capacity, which is the organization s ability to recognize the value of new external knowledge, assimilate it, and apply it to commercial advantage (Cohen and Levinthal, 1989, Zahra et Georges, 2002; Lane et al, 2006). The concept of organizational learning assumes creation and acquisition of internal and external new knowledge, while the absorption capacity concept is centered on the ability of capturing and integrating external knowledge in the firm s routines. Organizational learning relates to processes, while organizational learning capacity relates to structures. Between organizational learning and organizational absorptive capacity, there is a co-evolutionary relationship (Van den Bosch et al. 2003). A high level of in-house R&D (on form of organizational learning) will increase a 3 firm s ability (its absorptive capacity) to understand and access other innovators R&D. Moreover, endowed with a superior absorptive capacity, an organization will produce more product or process innovations while enhancing its organizational learning (Cohen and Levinthal, 1989). Therefore, absorptive capacity may be considered as a major predictor and enabler of organizational learning. 2.2 Attributes of organizational learning The Organizational learning process Organizational learning is a complex process spanning over several stages. Based on the degree of absorption of new knowledge in an organization s routines, Crossan et al. (1999, p.525) quarter the organizational learning process in the following phases: 1) the intuiting phase or the preconscious recognition of potential valuable of new knowledge or idea; 2) the interpreting phase, or the explaining of the new idea to one s self and to others; 3) the integrating phase, or the developing of shared understanding among individuals and the taking of coordinated actions through mutual adjustments, and 4) the institutionalizing phase or the embedding of the new idea in the routinized actions of the organization. Other authors extend the organizational learning process by including the organizational memorizing, learning, and unlearning as some other important phases affecting present and future learning (Fiol, 1985, 2003) Organizational learning sources Organization learning relies on an organization s direct experiences as well as on the experiences of others. The study of Levitt and March (1988) focused on the dynamics of organizational learning from internal and external experiences and provided a detailed analysis of the positive feedback and pitfalls of learning generated from both sources. The authors associated the competence trap, or a maladaptive specialization, with an organizational lock-in of inferior practices. Imitation of others successful experience risks a mismatch between the new knowledge and the organizational context, which may compromise the output of the learning process. Empirical research has identified various modes of organizational learning as the learning-by-doing (Arrow, 1962), learning by detection and correction of errors (Argyris, 1977), learning by using (Rosenberg, 1982), learning by interacting (Lundvall, 1992), learning by searching (Johnson, 1992), or the learning by performance feedback (Greve, 2003). 4 2.2.3 Organizational learning levels The question about the unit of analysis has provoked many debates on the literature regarding organizational learning. Who learns in an organization? On one hand, there are authors who consider the organization as an inanimate object and therefore learning cannot be described by the same characteristics as human learning (March and Olsen, 1975). In their view, since only a small number of individuals have a decision-making role and are able to influence the organizational pathway, they may be representative of the organizational learning. On the other hand, another view of organizational learning is collective learning. According to Hedberg (1981), organizational learning is much more than a simple sum of learning by its own members. By comparing individual to collective learning, different studies have shown very different attributes of these two levels of learning and have also highlighted the multilevel character of organizational learning (Esterby-Smith et al, 2003). This multi-level perspective of organizational learning has oriented research towards investigation of the combined mechanisms of the diverse tiers of learning. Sanchez (2005) proposes an interpretative framework of the transformation of individual learning in organizational learning through the intermediary of group (teams) learning. Wenger (1998) introduces the notion of community of practice; while Powell et al. (1996) analyse organizational learning from the networking perspective Organizational learning modes Organizations react to changes in their environment. Fiol et Lyles (1985) distinguishes between an organizational reaction representing only a defensive adjustment, and another involving the understanding of reasons beyond immediate current event. The authors associate high-level learning with the latter type of organizational behavior, and low-level learning with the former. The concepts of single-loop and double-loop make a similar distinction of the content of learning (Argyris, 2005). In the case of low or single-loop learning, adaptation to change occurs without changing the central features of an organization. Higher-level learning implies a change of the organization s overall rules and norms (Fiol et Lyles, 1985, Greve, 2003). According to the Torbert (1999) analysis on the links between organizational learning, organizational action, and organizational change, single-loop learning is concerned with the correctness of an action (Are we doing right?). In a double-loop learning process, the main question concerns the ways to improve organizational action (Can we do better?). Finally, in triple-loop learning, the questioning and reframing of the intent of 5 an organization s vision may imply radical changes to the organization s actions (Are we going in the right direction?) Single-loop learning leads to incremental organizational changes while double and triple-loop learning may cause radical transformations to the organization. 3) Technology policy learning definition and its building blocks Several authors note the high concentration of research on private organizational learning and point out the need for closer investigation on the learning within the governmental sector (Moynihan et Landuyt, 2007). Is learning in a public organization different from learning happening in the private sector? What are the building blocks of technology policy learning? 3.1 Public versus private organizational learning Crossan (2004) recommends the study of organizational learning in public organizations as a key tool for improving both policy-making capacity and the delivery of public policies. Many scholars plead for careful investigation of the specifics of learning in the public sector (Busenberg, 2001; Getha-Taylor, 2008; Moynihan et Landuyt, 2009, Nutt, 2005). In their view, public organizations deal with greater complexity and ambiguity of the goals. Also differences in the organizational structure, the level of autonomy and accountability, the normative dimension, and work related attitudes and values are considered cause for important differences between organizational learning in public and private organizations. LaPalombara (2001) emphasizes the impact of power struggles that take place in public-sector organizations, which are described as risk-adverse and influenced by politics. Meanwhile, other scholars dismiss the distinct traits of government organizations by considering them like public organizations from the private sector. They point out a tendency for priory considerations and oversimplifications that mark part of the accumulated knowledge about learning in public organizations (Rainey, 2009). According to Rainey et Bozeman (2000), the debate on this issue falls along two lines with some studies that consider differences between public and private organizations as a truism and others that treat these distinctions with contempt. By assessing a large number of studies spanning two decades, Rainey et Bozeman (2000) observed right and wrong points for both perspectives. Depending on the sector and type of organizational activity, private and public organization behavior may sometimes converge, while others diverge greatly. Therefore, the authors called for deep and meticulous empirical analysis of public organizational learning to avoid the superficiality trap. 3.2 Technology policy building blocks 6 3.2.1 What triggers the public policies changes? Two different theoretical stances have sustained the debate on this issue, the first being based on an institutional approach, while the second emphases learning as a source of change (Bennett and Howlett, 1992; Lieberman, 2002). According to the institutional approach, public policies changes are propelled by the social pressures and conflicts or by the public bureaucracies. The other perspective considers governmental learning as the main driver of the policymaking process. Hall (1993) and Heclo (1974) describe public organizational learning as a deliberate, less conscious activity of government that revisits its own past experiences in order to adjust the goals of its policies, or to better respond to various environmental stimuli. Sabatier and Jenkin-Smith (1988) suggest that policy-oriented learning happen when, the results from the analysis of past and current policies are considered in the subsequent policymaking process. Finally, Rose (1991) has introduced the concept of lessondrawing policy learning which is defined as the process of adoption from a country of programs and policies developed from other countries. As cross-national policy diffusion often relies on international networks and policy communities to provide forums for interaction, the patterns of policy adoption by governments can be explained by analyzing mechanisms of policy dissemination as processes of organizational learning (Crossan, 2004, p. 41) Who learns in public organizations? Stone et al. (2001) categorized the decision makers in several groups based on the criteria of their access to new knowledge and information and their importance on the decision-making process. High-level politicians (the political executives and legislators) have the primary role on the decision-making, but they do not have the time to access and consider detailed information. In addition, high-level politicians are more likely to view the policy-making process as a political activity. According to Stone et al., another important faction is composed of Civil Servants and Appointed Officials, who are an elite group characterized by permanence, security, high standards, and promotion by merit and code of political neutrality. They are responsible for processing the information, synthesizing it, and briefing the highlevel politicians. The street level bureaucrats and research editors and evaluators are supposed to gather the needed information, and to edit, prepare and synthesize the inputs that will be provided to the senior civil servants. Depending on each country s bureaucratic traditions, 7 each of these decision-making levels will be more or less able to capture, explore, and exploit new knowledge in order to improve the decision-making process. Benett and Howlett (1992) suggest a broader view of the participating groups in the policydecision making process. These authors combine the state officials group, the policy networks group, and the policy communities group. The policy networks include various levels of government personnel in policy formulation and implementation, as well as researchers, policy analysts, journalists who play important roles in the generation, dissemination, and evaluation of public policies (Sabatier, 1988: 131). The policy community group relates to the community of practice concept and has been introduced in the public organizational learning literature from Rose (1991). He suggests that elected officials searching for lessons prefer to turn to those whose overall political values are consistent with their own. Therefore, national or transnational epistemic communities are created and they become sources of new ideas. A careful examination of the learning capability of each decision-making group provides important insights into the causes of public policies successes and failures The content of learning: what is learnt and what is the effect? Is public policy learning a low or high-level type of learning? High-level organizational learning happens when the organizational members share the same understanding about the new knowledge and ideas and pursue the same goals in terms of transforming organizational values, culture, and operating processes. The multiplicity of participants in the decisionmaking process renders this sort of goal alignment difficult to attain in a democratic system context. In addition, double and third-loop learning should contribute to the achievement of organization s strategic objective. Or, in the case of public policy, the tendency to make decisions based on ideological standpoints prevails over theoretical and empirical evidence. Therefore, the policy environment is thought to not be propitious to double and third loop learning in public organizations (Common, 2004). This study challenges this perception by an in-depth examination of the policy environment and the modes of public organizational learning in the case of aerospace industry. 3.
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