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Abstract:
Services form an important part of the economy today. Innovation for service firms is as important as for manufacturing, but the innovation process for service firms is comparatively little studied. In this paper, I review the literature there is on the innovation process for service firms, and make two suggestions for formalizing that process. The common thought that service firms do not innovate does not hold. Innovation is, however, often ad hoc for services, and it can therefore be difficult to measure firms’ innovation efforts. These points are all related to issues of appropriability of the benefits of innovation in services. The two issues primarily discussed in this paper – the possibilities of formalizing and appropriating in case of NSD – are central for issues for service firms. It is here that this paper offers some contributions to the existing literature; it does not so much present an overview thereof.

services, innovation, formalization, appropriation

Abstract:
In this article it is argued that there are notable parallels between all of the different strands within ethics on the one hand, and accountancy on the other that, in teaching, can be drawn upon to enhance students’ understanding of the latter. Accountancy, part of economics, draws on utilitarian ethics, but not solely so. Accounting, in addition, draws on deontological and communitarian strands in ethics. The article suggests that the teaching of accounting – especially to non-economists – would benefit substantially from highlighting and developing these parallels.

Accounting, Ethics, Teaching Accounting, Utilitarianism, Deontology, Communitarian Ethics

Abstract:
The music industry is currently subject to changes influenced by ongoing digitalisation and informatization that are unprecedented. Other sectors can expect to undergo in the near future what the media industry is going through now – the movie industry being a prime suspect. Each day, some 600,000 copies of movies are exchanged via the Internet, most of these in violation of the copyright laws. The disruptive nature of technological development makes that the market for entertainment products and other content undergoes fundamental changes. Where ‘content’ used to be exchanged attached to a physical carrier, increasingly it has the features of an information product.

internet market, digital content, product differentiation, price discrimination, consumer as subcontractor, product development

Abstract:
Although informal networks are often emphasized as facilitating knowledge transfer, we use network data obtained from a multi-unit high-tech firm to show that the formal network also significantly contributes to inter-unit knowledge transfer. Individuals centrally placed in a network are, in addition, more involved in knowledge transfer, especially, the evidence suggests, in the case of the formal network. Focusing on the brokerage roles that individual fulfill, we find that knowledge transfer between units is more likely to occur through externally oriented brokers than internally oriented brokers in the formal network, but not in the informal network. Overall, the results show that there is more than one path to transfer knowledge.

knowledge transfer, inter-unit knowledge transfer, communication networks, centrality, brokerage roles

Abstract:
An assumption generally subscribed in evolutionary economics is thatnew technological paradigms arise from advances is science anddevelopments in technological knowledge. Demand only influences theselection among competing paradigms, and the course the paradigm afterits inception. In this paper we argue that this view needs to beadapted. We demonstrate that in the history of computing technology inthe 20th century a distinction can be made between periods in whicheither demand or knowledge development was the dominant enabler ofinnovation. In the demand enabled periods new technological (sub-)paradigms in computing technology have emerged as well.

enablers of innovation, technological paradigms, history of computing

Abstract:
The tension between (social) order and change, or, alternatively formulated, between structure and agency, has a long history in the social sciences (e.g. Verburg 1991). The discussion has substantial philosophical overtones. In this article we recount the history of the discussion. We both acknowledge the more recent admonition that the agent may have been given short shrift in previous eras (Davis 2003), but at the same time argue that one should not negate the reality of social structure or institutions (Hodgson 1999, 2004). In this article we argue, however, that these recent contributions, from the fields of economics, sociology, political science and management, do not provide a much needed account of how the tension between structure and agency may be resolved conceptually. Accounts seem to emphasize either structure or agency, and fail to capture their interrelationships. We submit that that the process of institutionalization does resolve the tension conceptually, focusing on the role of the agent in reproducing institutional setting, but also in instigating institutional change. We provide a theoretical account of the conditions under which institutions change, and the likely direction of such change. In doing so we emphasize the relation between socio-cultural values subscribed to in a society or community and institutional settings and practices (Dolfsma 2004). As institutions should be conceptualized to have both structural as well as ‘cultural’ aspects (Neale 1987), in many but not all cases irrevocably related, agents can re-interpret or re-define a given institutional structure in the light of a differing perspective, giving rise to tensions felt and possilbly setting in motion a process of institutional change.

Structure, Agency, Institutions, Institutional change, Process, Tensions

Abstract:
The development of economic thought is not unlike the development of technological knowledge: paradigms can be discerned over time and across the field. Indeed, in its history economics has experienced paradigm shifts. There is no reason why it will not do so again in the future. In technology, as in economics, paradigms do not emerge from the blue, but build on precursors, possibly from fields other than our own discipline. Recognizing this draws our attention to other fields, preparing us for a possible paradigm shift. Understanding these other paradigms might best be done using historian Wight’s concepts of plot structure, myths, and cultural endowment. A better understanding of different paradigms allows us to combine ideas from other (sub-) fields with our own so that we are likely to come up with better ideas. In the meantime, as the parallel with the composition of music and the playing of chess shows, we compose better articles in the meantime because we are aware of the rules guiding our own compositions, yet. The history of our own field may be the first and best source for such inspiration.

knowledge paradigms, paradigm shifts, myths & plot structure, writing by the rules, history of economics

Abstract:
This paper discusses how markets and society relate to each other. We present and discuss three views: markets as separate, markets as embedded, and markets as impure. One’s stance on the contribution of markets to welfare hinges on the conceptualization of market and other spheres in society. If, for instance, one perceives of the economy (the economic domain) as an all-encompassing sphere or as a sphere totally separate from others, then one would believe markets necessarily contribute to welfare. Markets are presumed to be ubiquitous in mainstream economics; the orthodox view is that of the ‘market as separate’. Indeed, Frank Hahn notably conceded that neoclassical economics does not describe markets, but ‘conjures’ them up. Mainstream conceptions of the market are functionalist – in the appropriate conditions the market is an efficiency conduit, and hence wealth and welfare generating. Creating these appropriate conditions then drives policy, such as the provision of health care, and tends to produce a one size fits all approach. This paper argues that this is an overly restrictive conceptualization of markets, and is an inadequate basis for conceptualizing the potential effects of markets. Conceptualizing the market as impure and embedded must be added. We contribute to this discussion by developing the concepts of ‘boundaries’ separating spheres. Such an approach broadens the notion of welfare and well-being beyond the monetized parameters of economic orthodoxy.

market, society, market as separate, markets as impure, markets as embedded, health care

Abstract:
For an economy where knowledge plays an increasingly important role in shaping its dynamics, economics needs a dynamic (Schumpeterian) welfare theory. This paper sketches the role of knowledge in an economy and argues that a static Paretian welfare economics is inadequate, or at least needs to be supplemented. As suggested by the work of Schumpeter, a dynamic welfare economics acknowledges the role of knowledge. In a dynamic welfare economics, I suggest, different costs of communication are central, indicating that knowledge may not be readily diffused or exchanged. Recent developments in Intellectual Property Right (IPR) law are evaluated to determine the extent to which they affect communication costs and thus future economic welfare.

knowledge economy, welfare theory, IPR, communication, communication costs

Abstract:
Fashion is the quintessential post-modernist consumer practice, or so many hold. In this contribution, I argue that, on the contrary, fashion should be understood as a means of communicating one's commitment to modernist values. I introduce the framework of the Social Value Network, to relate such values to institutionalized consumption behavior, allowing one to signal to others. Modernist values are not homogenous, and are in important ways contradictory, giving rise to the dynamics of fashion that can be observed.

Consumption, modernism, fashion, identity, symbolic goods

Abstract:
In contrast to findings in other countries, andsurprisingly in view of the literature, high tech economic activity in the Netherlands is not spread geographically according to either relevant labour market characteristics or because of localized agglomeration effects. Instead, statistical analysis shows that the Netherlands is an urban field, and that the knowledge infrastructure is the only variable to significantly explain high-tech presence through the Netherlands. By analysing the same relations for younger firms, we are able to make a rather strong case about causation.

location factors, high-tech, Netherlands, knowledge infrastructure, knowledge spillover & cognitive distance

Abstract:
In contrast to findings in other countries, andsurprisingly in view of the literature, high tech economic activity in the Netherlands is not spread geographically according to either relevant labour market characteristics or because of localized agglomeration effects. Instead, statistical analysis shows that the Netherlands is an urban field, and that the knowledge infrastructure is the only variable to significantly explain high-tech presence through the Netherlands. By analysing the same relations for younger firms, we are able to make a rather strong case about causation.

location factors, high-tech, Netherlands, knowledge infrastructure, knowledge spillover & cognitive distance

Abstract:
In the year 2000 some $142 billion in royalties were paid internationally by users of a specific piece of knowledge that were protected under Intellectual Property Right law (IPR) to those parties that owned these rights. Under current circumstances where knowledge & innovation play an increasingly significant role in the economy (Foray & Lundvall 1996, Cowan, David and Foray 2000, Cooke 2002, Dolfsma & Soete 2006, Dolfsma 2005). IPRs have become increasingly prominent in debates and are almost unanimously deemed to favor economic development by policymakers, and certainly by policymakers in developed countries. While it has been acknowledged that some parties may benefit more from a system of IPRs than others, in relative terms a Pareto improvement is the expected outcome (Langford 1997). This has not always been the case. In addition, the academic (economic) community is almost unanimous about the system of IPR overshooting its goals. This has been the motivation to include IPRs in the WTO negotiations. The TRIPS agreement (Trade-Related Aspects of Intellectual Property Rights) has resulted in 1994 from these negotiations. Especially during the 1990s the number of patents granted has grown tremendously despite the fact that many a scholar still supports Machlup’s (1958, p.28) conclusion that:“it would be irresponsible, on the basis of our present knowledge of its consequences, to recommend instituting one. But since we have had a patent system for a long time, it would be irresponsible, on the basis of our present knowledge, to recommend abolishing it.”From other corners, where specific effects of IPRs are considered, a different and less circumspect sound may be heard. Examples of this are attempts to make available HIV/AIDS drugs at a reduced price compared to what the pharmaceutical companies that have the patents on these drugs demand. I will focus on patents.Empirical and theoretical findings bearing on the question of IPRs’ effect on technological development, and thus prospect for economic development, are reviewed. Static and dynamic effects are distinguished. Areas where static effects may be expected include transfer of knowledge, balance of payment effects, effects for large as opposed to small firms, and effect on the ‘extent of the market’. Areas for dynamic effects include technological development and technological preemption. The list may not be exhaustive, and effects are interlocking: they may be mutually reinforcing or they may conflict. I will mostly focus on ‘dynamic’ effects.

Intellectual Property Rights, IPRs, Technological Development, Economic Dynamics

Abstract:
This paper endeavours to contribute to the growing institutionalist literature on the conception of the institution. We draw from John Davis’ (2003) analysis of the individual in posing the questions: what differentiates institutions, and how can changing institutions be identified through time and space? Our analysis develops Searle’s (2005) argument that language is the fundamental institution. Searle’s argument is rather functionalist, however, and does not convey the ambiguity of language. Moreover, language and understanding, surely when related to most institutions in real life, delineate and circumscribe a community. A community cannot function without a common language, as Searle argued, but language also constitutes a community’s boundaries, and excludes unsavoury outsiders or alien topics for discussion. This is how institutions both constrain and enable. By drawing upon Luhmann’s (1995) systems analysis and notions of discourse, communication, and text we aim to augment the existing analytical role ascribed to habit in institutional analysis. Thus, we submit, understanding institutional change and thus durability may progress.

Institutions, Institutional Change, Language, Discourse Re-Indentification

Abstract:
Services constitute a major part of the economy, and, contrary to popular believe, service firms do innovate. In this paper I take a closer look at one aspect of innovation in services: appropriability. I discuss the different elements that are possibly of importance for appropriability, and discuss one element in more detail. Reputation has been argued to be decisive whenservice firms try to appropriate the benefits of their innovative activity. In this paper, somesuggestions are brought forward that will be useful in thinking systematically about reputationshaping mechanisms.

innovation, services, appropriability, reputation

Abstract:
Services constitute a major part of the economy, and, contrary to popular believe, service firms do innovate. In this paper I take a closer look at one aspect of innovation in services: appropriability. I discuss the different elements that are possibly of importance for appropriability, and discuss one element in more detail. Reputation has been argued to be decisive whenservice firms try to appropriate the benefits of their innovative activity. In this paper, somesuggestions are brought forward that will be useful in thinking systematically about reputationshaping mechanisms.

innovation, services, appropriability, reputation

Abstract:
Services constitute a major part of the economy, and, contrary to popular believe, service firms do innovate. In this paper I take a closer look at one aspect of innovation in services: appropriability. I discuss the different elements that are possibly of importance for appropriability, and discuss one element in more detail. Reputation has been argued to be decisive when service firms try to appropriate the benefits of their innovative activity. In this paper, some suggestions are brought forward that will be useful in thinking systematically about reputationshaping mechanisms.

Keywords: innovation, services, appropriability, reputation

Abstract:
In this paper, we draw on the literature about gift exchange to suggest a conceptualization of theemergence, maintenance and use of social capital (SK). We thus open up the black box of how social relations are established, and are able to indicate what can be meaningfully ascribed to social capital. Social capital as a concept cannot be invoked at will to explain situations that areprimarily perceived as favorable. Instead, when the way in which social capital emerges, maintained and used is conceptually clarified, it becomes clear that situations perceived as unfavorable can be ascribed to SK as well, and it becomes clear that SK cannot be drawn on at will, by just anybody. SK resides in what we call a social capital community.

social capital, gifts, reciprocity, social exchange, Social Capital Community

Abstract:
In this article, contrary to popular belief, it is argued on the basis of Transaction CostEconomics that consumers will become dependent subcontractors on electronic markets.Consumers invest time and effort building up a relation with a producer or e-tailer; aninvestment that is idiosyncratic. The producer or e-tailer only needs to invest in generic assetsthat enable him to automate the process of collecting and processing customer information sheneeds to differentiate products and discriminate prices. As subcontractors consumers face highswitching costs and are thus dependent on producers or e-tailers. Virtual communities ofconsumers that organize countervailing power will not mitigate this tendency.

consumers, electronic markets, consumers as subcontractors, transaction cost, electronic

Abstract:
In this article, contrary to popular belief, it is argued on the basis of Transaction CostEconomics that consumers will become dependent subcontractors on electronic markets.Consumers invest time and effort building up a relation with a producer or e-tailer; aninvestment that is idiosyncratic. The producer or e-tailer only needs to invest in generic assetsthat enable him to automate the process of collecting and processing customer information sheneeds to differentiate products and discriminate prices. As subcontractors consumers face highswitching costs and are thus dependent on producers or e-tailers. Virtual communities ofconsumers that organize countervailing power will not mitigate this tendency.

consumers, electronic markets, consumers as subcontractors, transaction cost, electronic

Abstract:
Fashion is the quintessential post-modernist consumer practice, or so many hold. In this contribution, I argue that, on the contrary, fashion should be understood as a means of communicating one’s commitment to modernist values. I introduce the framework of the Social Value Network, to relate such values to institutionalised consumption behaviour, allowing one to signal to others. Modernist values are not homogenous, and are in important ways contradictory, giving rise to the dynamics of fashion that can be observed.
Fashion is the quintessential post-modernist consumer practice, or so many hold. In this contribution, I argue that, on the contrary, fashion should be understood as a means of communicating one's commitment to modernist values. I introduce the framework of the Social Value Network, to relate such values to institutionalised consumption behaviour, allowing one to signal to others. Modernist values are not homogenous, and are in important ways contradictory, giving rise to the dynamics of fashion that can be observed.

consumption, modernism, fashion, identity, symbolic goods

Abstract:
In their seminal paper, Acs and Audretsch (1988) analyze innovation patterns across industries and identify several determinants of innovativeness, both positive and negative. Their work is seminal if only because of the unique data they use to measure innovativeness: new-product announcements. They show that industry concentration, degree of unionization would hamper innovation; industries characterized by increased shares of skilled labor and large firms provide favorable conditions for innovation. By analyzing a new and more consciously compiled database, we re-examine their original claims. Our results largely support the findings of Acs & Audretsch, but diverge from them in one important way. We suggest that the large firms do not contribute more to a industry’s innovativeness than small firms – a vindication of the Schumpeter Mark I perspective. In addition, we analyze micro-level data of individual firms. Firms within different sub-groups respond differently to their competitive environment. We show that less dedicated innovators prove more susceptible to environmental factors than more committed innovators. In addition, an unfavorable competitive environment decreases the likelihood that less successful innovators will announce new products.

Innovation, New-Product Announcements, Innovation Sub-Currents, Schumpeter Mark I

Abstract:
Although informal networks are often emphasized as facilitating knowledge transfer, we use network data obtained from a multi-unit high-tech firm to show that the formal network also significantly contributes to inter-unit knowledge transfer. Individuals centrally placed in a network are, in addition, more involved in knowledge transfer, especially, the evidence suggests, in the case of the formal network. Focusing on the brokerage roles that individual fulfill, we find that knowledge transfer between units is more likely to occur through externally oriented brokers than internally oriented brokers in the formal network, but not in the informal network. Overall, the results show that there is more than one path to transfer knowledge.

knowledge transfer, inter-unit knowledge transfer, communication networks, centrality, brokerage roles

Abstract:
In this paper, we draw on the literature about gift exchange to suggest a conceptualization of theemergence, maintenance and use of social capital (SK). We thus open up the black box of how social relations are established, and are able to indicate what can be meaningfully ascribed to social capital. Social capital as a concept cannot be invoked at will to explain situations that areprimarily perceived as favorable. Instead, when the way in which social capital emerges, maintained and used is conceptually clarified, it becomes clear that situations perceived as unfavorable can be ascribed to SK as well, and it becomes clear that SK cannot be drawn on at will, by just anybody. SK resides in what we call a social capital community.

social capital, gifts, reciprocity, social exchange, Social Capital Community

Abstract:
Elements of economic geography and scientometrics areused to operationalize the knowledge-based order of the economy, and anindicator of university-industry-government relations is developed. Dataconsisting of records on 1,131,668 firms in The Netherlands are used tovalidate the indicator. The data include information about each firm's location, industry sector,and size. Analysis of the data leads to four major hypotheses: first, theknowledge base of a regional economy is carried by medium-tech manufacturing;second, medium-tech manufacturing provides the backbone of the techno-economicstructure of the country; third, non-high-tech knowledge-intensive serviceshave an unfavorable effect on the territorial knowledge base of an economy; andfinally, The Netherlands is highly developed as a knowledge-intensive serviceeconomy. (SAA)

Chambers of Commerce, Medium-technology firms, High technology industries, Information industry, Manufacturing industries, Firm location, Firm size, University-industry-government relations, Knowledge economies, Knowledge base, Institutional alliances, Regional economies