Is Organizational Innovation a Technology? Evidence From Patent Data
72 Pages Posted: 27 Apr 2021 Last revised: 1 Sep 2021
Date Written: April 26, 2021
Organization theorists have long claimed that organizational innovations are nontechnological, in part, because they are unpatentable. The claim rests on the assumption that organizational knowledge is embodied in persons and contexts rather than in context-free practical tools. However, over the last three decades information and communication technologies gradually expanded the universe of tools for embodying organizational knowledge which, in principle, can be patented. We show that patentability is indeed a key indicator of successful embodiment. To provide the first empirical evidence regarding the patentability of organizational innovations, we construct sequentially three datasets: (1) a population of 114 organizational innovations since the early 20th century; (2) a sample of 300 US patent applications from 1970-2020, successful or not, that feature 58 of these innovations and serve as seeds for an algorithmic search for similar innovations; (3) a population of 67,240 patent applications from the same period, the output of Google’s patent landscaping algorithm, which coverage extends up to 95 organizational innovations. Empirical analyses of these datasets yield two mutually reinforcing findings: (1) Organizational innovations of the 20th century prompt US patent applications in the 21st century, and more so if they propose a practical tool in addition to abstract knowledge; (2) The probability of patent allowance is higher for applications that emphasize a tool rather than knowledge. In sum, the present-day digital transformation places organizational innovations in the realm of high tech and turns the debate about organizational technologies into the challenge of designing practical organizational tools on the basis of abstract organizational knowledge. We outline an agenda for patent-based research on OrgTech as an emerging phenomenon.
Keywords: organizational innovation, organizational technology, patents, machine learning
JEL Classification: M15, O32, O34
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