Knowledge Flows

Codified knowledge, such as experimental results can be exchanged through networks and in relationships of trust. These are forms of social capital that do not directly fall under the scope of intellectual gravity. The distinction in this instance, although minor, is that gravity will provide a firm with opportunities to exchange knowledge with others whom they previously were not engaged in a relationship with. Codified knowledge is usually purchased or exchanged. We believe that intellectual gravity primarily facilitates the exchange of tacit knowledge between parties. This is more difficult to transfer than codified knowledge, particularly between organizations (Catherine 2004; Zucker et al. 2002a).

One technique is to simply purchase tacit knowledge and assist its diffusion through the firm. Senior management of the pharmaceutical companies who adopted biotechnology hired many new scientists who embodied the technology allowing existing personnel to acquire the expertise or leave (Liebeskind et al. 1996). Another method would be to merge or acquire entire firms developing a technology. Alternatively, firms can undertake collaborative research with external scientists. When performed successfully, knowledge is integrated directly into the ongoing R&D programmes of both organizations, something that cannot occur through pure market exchanges (Zucker and Darby 1997). The role of management in R&D intensive firms has gone from 'coordinating the on-going internal activities of the firm through a command and control structure' to 'providing appropriate organizational support for both the internal and external exchanges' that are essential to the firm's survival and success (Cohen and Levinthal 1990, p. 131). In either instance, the acquisition of tacit knowledge from outside the firm is reliant upon its absorptive capacity.

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