Component change and architectural change in the search for firms' technological innovations

Abstract

We argue that search for technological innovations require two types of search in knowledge space. First, it requires component change, which refers to addition or elimination of certain elements or components of knowledge used in innovation. Second, it requires architectural change, or in other words, changes of the ways in which knowledge components are integrated and coupled together. We develop arguments on how certain kinds of component change and architectural change in an organizational knowledge base lead to the generation of breakthrough innovations. We also examine how turbulence and complexity in the innovation contexts moderate the effects of changes in a firm's component and architectural knowledge. We test our theory and hypotheses based on patent and citation data of the US firms across industries between 1989 and 1999.