The Coevolution of Organizational Knowledge and Market Technology

A coevolutionary perspective on knowledge strategy is developed, where variant positions in knowledge space are predicted to result in differential advantages in product space. In particular, advantages to being both consistent and specialized in knowledge space are predicted to generate advantages in product space. Results in support of this prediction are found in an analysis of the history of the computer industry. The theory and findings have implications for both technology strategy and for researchers interested in introducing choice to evolutionary models of organizations. In particular, the findings imply that exploration in knowledge space inhibits exploration in product space.