On the dynamics of appropriability, of tacit and of codified knowledge

Abstract

The main objective of this paper is to study the relationship between codification and appropriability. Both codification and appropriability are not interpreted here as discrete variables, but as describing a range of possible situations, from the completely tacit to the completely codified, and similarly for appropriability. It is argued that the degree of codification increases with the age and maturity of a discipline/research tradition. Appropriability is found to depend on: (a) the degree of codification, (b) the fraction of the population of agents knowing the code, and (c) the distribution of knowledge among the agents who are potential users of knowledge. Thus, we can expect the intrinsic appropriability of a discipline/research tradition to fall both with the degree of codification, which increases with the maturity of the discipline/research tradition, and with the fraction of the population of agents knowing the code. Such tendency can be counteracted by the strategies of some agents attempting to advance the knowledge frontier fast enough to leave behind other agents. The analysis contained in this paper refers only to the internal or intrinsic appropriability of a discipline/research tradition. However, the appropriability of a discipline/research tradition can be raised by other means, for example, by combining what could be considered the core knowledge of an organization with complementary assets (e.g., legal, marketing, financial competencies, etc). Such further mechanisms of creation of appropriability are not studied in this paper. © 1998 Published by Elsevier Science B.V.