Dual Innovation Systems. Francois-Xavier Meunier

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СКАЧАТЬ economics, it is the multidimensional nature of this approach that renders it particularly interesting for addressing matters of organization, governance or strategy of duality.

1.3. Actors and objectives of duality

Duality organization refers directly to expected (economic, technological, strategic) performance, which varies depending on the actor and influences their behavior (Lu et al. 2015). Its implementation associates sometimes conflicting challenges, from knowledge management to public policy challenges (Daguzan 2001). Moreover, there are different ways to consider duality, and therefore various objectives and different strategies. Similar to the definition of a dual object, there is no general agreement on the principles that should guide duality implementation.

      For a proper consideration of this diversity in the implementation of duality, this section studies the matter from the most microeconomic perspective (company strategy) to the macroeconomic level (international relations).

      1.3.1. Dual strategies of companies

      At the end of the Cold War, given the decrease in defense expenditure, the production of systems for military purposes was gradually privatized and consolidated around large groups. These companies can then consider duality as a means to reach a balance and stabilize results in a contracting or at least very cyclical market (Depeyre 2013).

      From then on, from a company perspective, dual strategy involves addressing both civilian and military markets. Duality is intuitively represented as a means to achieve economies of scale or scope. This however requires many adjustments within such a company, which must reconcile more or less diverging regulatory, technical, financial and commercial constraints. The analysis proposed by Mérindol and Versailles for Thales company is particularly instructive. In this article, Thales strategy is referred to as “global duality”. “The company is trying to benefit from its technological advantage by developing synergies between the solutions proposed for a set of products on adjacent markets (defense, aeronautics, land transport, etc.)” (Mérindol and Versailles 2015b, p. 10). The analysis indicates the influence that such a strategy has on the competences and technological developments of a company.

In reality, there are various ways to consider a dual strategy. One case may involve market diversification without diversification of competences; this amounts to capitalizing on its competences by adapting its offer to new clients. A reverse approach to dual strategy may involve proposing new products to the same (military or civilian) clients using new competences coming from the other sector, in completion to those already existing in the company. Duality is then the result of strategic reflection for the company whose objective is, in one case, to shift specific resources to a new market (market diversification), while in the other case the objective is to take advantage of new resources for the same market (product diversification). Less often, it involves both simultaneously.

      Whatever the situation, this dual diversification requires reaching a compromise between two sometimes distant universes. Literature stresses three challenges that the companies should address; they refer to the role of demand, financing needs, and management of competences.

      Let us first consider the role of demand: besides the specificity of military demand, for which performance criteria are essential and strategic superiority or sustainable supply are high priority, a “small edge in performance can mean survival” (Alic et al. 1992, p. 114). Already in 1988, Albrecht (Gummett and Reppy 1988) raised the question of the role of final users in the dynamics of technology transfer, both in relation with the army and with civilian users. This proves essential in the dominance of one sector or another in the development of technology. The dominance (in terms of value) of a (civilian or military) demand with respect to the other drives the manufacturers to address this demand as a priority, which leads to structuring the products depending on the expectations of the dominant client. The other one is secondary and must do with the technology such as developed, though it may not exactly meet its needs.

      Due to consumer computing emergence, the civilian sector has progressively become the main engine of this industry, while the military sector became a follower engaging in off-the-shelf purchase in the semiconductors field (for example, Alic et al. 1992). Moreover, users do not have the same understanding of technology as manufacturers, and are not necessarily concerned by its origin. Therefore, a technology that best meets their need is preferred to the one originally developed to meet that need. Taking their expectation into account is an important element in the dissemination and development of duality, initiating transfers from one sector to another (similar to the example of lead users).

Next, financing constraints should be considered: the financing structure of defense companies is characterized by specific constraints marked by the state’s dominant role, fluctuating financial markets, less involved banks, etc. (Goyal et al. 2002; Besancenot and Vranceanu 2006). Nevertheless, due to the dualization of defense, financing structures seem to converge. One question formulated in the literature is how this technological duality can modify the financing structure of defense industries and bring them closer to the civilian sector. The works conducted by Jean Belin seem to show that, for a defense company, duality appears to facilitate its access to private capital and therefore improve its financing capacity (Belin and Guille 2008).

      Finally, constraints related to the management of competences: the more or less efficient use of this knowledge depends on the competences within organizations; knowledge management becomes a key competence in the implementation of duality (Versailles and Mérindol 2014). Companies active in the defense sector rethink the limits within which they draw and use their knowledge. Consequently, the limits of a secrecy-based knowledge management strategy, formerly prevailing in this sector, become obvious. Some studies even indicate a stronger tendency for patent filing in the companies active in defense (Guillou et al. 2009). According to innovation economics, there is an interest in new strategies for knowledge management and more widely for the management of competences (Lazaric et al. 2011).

      Depending on the type of company, these constraints weigh differently on the strategies. Nowadays, more than in the past, following the large-scale privatization taking place in the 1990s in the major arms producing countries (Bellais 2005; Lazaric et al. 2011), top manufacturers play the role of Lead System Integrators (LSI), and the dual potential of armament systems depends on their capacity to integrate a wide variety of subsystems from various horizons (Mérindol 2010). It is worth noting that the integrator role can also be assumed by a public organization. As such, the French National Aerospace Research Center (Office national d’études et de recherches aérospatiales (ONERA)), which absorbs and develops technologies from both civilian and military sectors to the benefit of both, is a good example (Lafon 2001). Unlike large organizations, entrepreneurship or spin-off strategies can also be platforms that facilitate the dissemination of technologies between civilian and defense sectors (Azulay et al. 2002).

      Referring to innovation in general and dual innovation in particular, one part of the literature points out the importance of knowledge networks and learning processes. On this subject, innovation sociology enables the significant expansion of the analysis framework by studying innovation networks. They show that their organization plays a role in the use of technological potentialities, and in particular in the use of dual potential.

Guichard (2004a) recalls the interest of sociological approaches that understand the encounter between different social worlds in terms of processes. Her analysis relies particularly on “technoeconomic networks”. These are defined as “a set of heterogeneous actors – public laboratories, technical research centers, industrial firms, financial organizations, users, and public authorities – which participate collectively in the development and the diffusion of innovation and which via numerous interactions organize the relationships between scientifico-technical research and the marketplace” (Callon 1991, p. 220). Guichard points out the role of an actor who “shifts and transforms ideas, means, objects, СКАЧАТЬ