On the Relationship between the Evolution of Technological Firms and Their Knowledge Development Regimes

Differences in knowledge regimes and growth dynamics amongst four ideal types of knowledge based firms are analyzed.Two aspects of technological knowledge,technological opportunity and appropriability are traditionally seen as vital to understand the incentives for research and development activities in firms.However,they do not fully define the technology regimes,when one asks how the knowledge based firm competes.Therefore,the dynamic nature of firm capabilities and knowledge development in terms of expansion and in terms of deepening are also discussed.These two additional aspects of knowledge implies that even if all firms in an industry can be considered to be knowledge intensive these firms do also differ.Using cases of entrepreneurial start-up firms in Sweden,we illustrate whether our conceptual ideas of knowledge development help us understand the diversity and contradictions of firm evolution.Our finding is that firm evolution and capability development is dependent upon both the potential for expanding knowledge,such as by innovations,and by deepening the understanding within established knowledge,such as by learning.This implies that the shaping of a science based industry must be seen in relation both to the value of current knowledge and capabilities together with the sometimes only limited and temporarily advantages of radical innovations.