Technological Diversification: implications for the firm

This paper brings together evolutionary economics and resource-based approaches to the study of the firm and focuses them upon the issue of technological diversification. Despite the empirical observations that the world is increasingly technologically complex, technological diversification is little studied. Traditional researches into diversification within the firm have still tended to focus on diversification at the levels of products and regions for the motives of risk diversification and the exploitation of economies of scale and scope. Yet technological diversification is a phenomenon that has important implications for the organisation of competencies within firms and between firms. By examining the nature of technological diversification and outlining the ways in which diversification at the technological level relates to that at the product level, the paper proposes that an understanding of such relationships might inform the appropriate organisational form for a firm operating in a complex technological environment to adopt. Submission for Nelson and Winter Conference in Aalborg, Denmark. June12-15 2001, Hosted by DRUID.