Modeling Knowledge Development in an Economic Context

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Modeling Knowledge Development in an Economic
Context
ABMS August 20

• Rögnvaldur J. Sæmundsson

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Overview

• Who am I?
• Rationale Why do this?
• Research questions
• Basic concepts/modules
• Points to remember

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Rögnvaldur J. Sæmundsson

• Associate prof. School of Business.
• Electrical Engineering from UI.
• Sleep Research Unit at Landspitalinn.
• MS in Engineering from UI.
• Director of Software Dev at Flaga.
• PhD in Technology Man. from CTH.
• Research on New Technology-Based Firms (NTBFs).
• Emphasis on development of technical knowledge.

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Why simulate knowledge development?

• Knowledge is central to innovation.
• Innovation and economic development.
• Knowledge development is complex...
• ...and is difficult to handle empirically.
• Simulation an exiting tool for research...
• ...especially agent-based.

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What are we trying to accomplish?

• Teach agent-based modeling techniques
• Train you to deal with multilevel complexity
• Intellectual challengefun
• Building blocks for research
• Simple proof-of-principle models
• answer basic questions/confirm stylized facts
• Not history friendly models
• not to predict the future or explain the past

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Research questions

• How is knowledge development in firms related to
  the coordination mechanisms used for organizing?
• How is knowledge development in firms related to
  the structure of their industry?
• How is knowledge development in firms related to
  access to resources in their industry?

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Knowledge development

• Knowledge as skills what you can do
• Development Changes in endowments
• Speed and structure
• Important dimensions
• Fields
• Level
• Important dynamics
• Accumulation
• Specialization and integration (inter and intra
  firm)
• Constraints
• Usefulness and cost

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Basic modules
Industry
External knowledge generation
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Individuals

• Employees
• Carriers of knowledge
• Have preferences
• Take on different roles in the firm
• Management
• Operations
• Research and Development (RD)

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Firms

• Governance structure legal entity
• Bus. opportunities - innovation/imitation
• Bundle of resources
• human, physical, financial
• Operations and exchange
• Administrative unit
• direction
• organization (coordination mechanisms)

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Industry

• Group of firms that compete in the market
• Competing products/services
• Function
• Value
• Industry structure
• Concentration (number, size)
• Maturity - Innovation life cycle
• Creative destruction

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Product market

• Market for outputs (products and services)
• Products and services
• Utility/function
• Price
• Customers are agents (firms, consumers)

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Factor market

• Market for inputs (resources)
• Resources
• Human (carriers of knowledge)
• Physical (capacity)
• Financial (means to obtain the other)
• Will focus on human and financial
• Resource owners are agents (firms, indiv.)

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External knowledge generation

• Knowledge developed outside the industry
• Universities
• Research institutes
• Other industries
• Diffusion to the industry based on
• Knowledge seeking activities
• Prior knowledge (absorptive capacity)

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Remember

• Focus on knowledge development within an economic
  context.
• Only the starting point is provided the rest is
  up to you.
• Aim for simplicity given the objective of the
  modeling (research questions).
• Compare to stylized facts
• Question embrace the challenge.