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Division of labor and division of knowledge: Why the nature of the causality matters for the evolutionary theory of the firm

In: Innovation, Industrial Dynamics and Structural Transformation

Author

Listed:
  • Markus C. Becker

    (Université Louis Pasteur)

  • Patrick Cohendet

    (Université Louis Pasteur)

  • Patrick Llerena

    (Université Louis Pasteur)

Abstract

This article considers the role and interrelation of the division of labor and the division of knowledge, and its relevance for knowledge-based and evolutionary theories of the firm. As is well known, Adam Smith focused on the effect of the division of labor, while Charles Babbage focused on the effect of the division of knowledge. We are not the first to argue that both are connected in a loop, the division of labor guiding the division of knowledge via learning by doing, and the division of knowledge, in turn, guiding the development of competences for accomplishing steps of the work process. In this article, our main argument is that even knowledge-based and evolutionary approaches to the theory of the firm have focused more on the Smithian than the Babbagian part of the loop. We argue that the impact of the division of knowledge should not be glossed over and perhaps be considered first. The reason is that in the division of knowledge cognition enters the picture and makes a difference, amongst other things on the division of labor. Taking the division of knowledge into account also helps cast light on such important issues as understanding the emergence of routines.

Suggested Citation

  • Markus C. Becker & Patrick Cohendet & Patrick Llerena, 2007. "Division of labor and division of knowledge: Why the nature of the causality matters for the evolutionary theory of the firm," Springer Books, in: Uwe Cantner & Franco Malerba (ed.), Innovation, Industrial Dynamics and Structural Transformation, pages 49-63, Springer.
    • Handle: RePEc:spr:sprchp:978-3-540-49465-2_4
    DOI: 10.1007/978-3-540-49465-2_4
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    Cited by:

    1. Thierry BURGER-HELMCHEN & Claude GUITTARD, 2008. "Are Users The Next Entrepreneurs? A Case Study On The Video Game Industry," Working Papers of BETA 2008-14, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    2. Thierry Burger-Helmchen & Patrick Llerena, 2008. "A case study of a creative start-up: governance, communities and knowledge management," Journal of Innovation Economics, De Boeck Université, vol. 0(2), pages 125-146.
    3. Thierry Burger-Helmchen & Claude Guittard, 2008. "Are users the next entrepreneurs ?," Post-Print hal-02189762, HAL.

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