Knowledge and Competitive Advantage

The Coevolution of Firms, Technology, and National Institutions


By Johann Peter Murmann

Published (November 2003) at Cambridge University Press

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You can download the introductory chapter to the book here: Introduction Download 

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Book Description:  Entrepreneurs, managers, and policy makers must make decisions about a future that is inherently uncertain. Since the only rational guide for the future is the past, analysis of previous episodes in industrial development can shape informed decisions about what the future will hold. Historical scholarship that seeks to uncover systematically the causal processes transforming industries is thus of vital importance to the executives and managers shaping business policy today. With this in mind, Johann Peter Murmann compares the development of the synthetic dye industry in Great Britain, Germany, and the United States through the lenses of evolutionary theory. The rise of this industry constitutes an important chapter in business, economic, and technological history because synthetic dyes, invented in 1856, were the first scientific discovery quickly to give rise to a new industry. Just as with contemporary high tech industries, the synthetic dye business faced considerable uncertainty that led to many surprises for the agents involved. After the discovery of synthetic dyes, British firms led the industry for the first eight years, but German firms came to dominate the industry for decades; American firms, in contrast, played only a minor role in this important development. Murmann identifies differences in educational institutions and patent laws as the key reasons for German leadership in the industry. Successful firms developed strong ties to the centers of organic chemistry knowledge. As Murmann demonstrates, a complex coevolutionary process linking firms, technology, and national institutions resulted in very different degrees of industrial success among the dye firms in the three countries.

Reflections on Knowledge and Competitive Advantage

"Rarely has any student of economic change combined impeccable scholarship, sophisticated theory, challenging ideas, and engaging narrative in the elegant manner of Johann Peter Murmann. Readers who have no interest whatsoever in industrial chemistry will nevertheless learn a great deal about economic processes from Murmann's original, ambitious work."
Charles Tilly
, Joseph L. Buttenwieser Professor of Social Science, Columbia University

"If evolutionary models are to be successful at all in the social sciences, it is in enhancing our understanding of technological and economic performance in the past. In this pioneering work, Johann Peter Murmann does exactly that, and immediately establishes himself as one of the most innovative and bold scholars in the field. Using evolutionary theory and management science, this book sheds important light on the nineteenth-century chemical industry. This is one of the most methodologically original books in interdisciplinary history to come out in recent years."
Joel Mokyr
, Robert H. Strotz Professor of Arts and Sciences and Professor of Economics and History, Northwestern University

"Murmann's study of the synthetic dye industry puts one in mind of some grand painting by an Old Master: not only is the main scene imposingly displayed, but fascinating, well-rendered details are to be found in every corner and shadow. His account of the early decades of the industry reveals the remarkable complexity of the social processes of industrial development. At the same time, his coevolutionary perspective transcends the details, organizes this complex story in a compelling fashion and leads the reader to a deeper understanding."
Sidney G. Winter
, Deloitte and Touche Professor of Management, The Wharton School, University of Pennsylvania

"Darwin not only set out his theory of biological evolution at some length but also provided as much empirical backing as was available at the time. In this remarkable book Johannn Peter Murmann sets out a general analysis of coevolution and provides a detailed example to back it up how quickly the discovery of synthetic dyes by an academic scientist gave rise to an industry that in turn influenced the development of academic science. Murmann provides a well-developed theory and evidence to support it. Who could ask for more?"
David L. Hull, Professor of Philosophy (Emeritus), Northwestern University

"Johann Peter Murmann's book is a major contribution to our understanding of the interrelations between technological change and industry evolution. This comparative study of the emergence of the synthetic dye industry wonderfully illustrates how differences in public policy, university traditions, and industry context affect both technical as well as industrial change. Murmann's book will have a major impact on coevolutionary theory as well as industrial policy. It is a book for researchers as well as for policy makers."
Michael Tushman, Paul R. Lawrence, Class of 1942 Professor, Harvard Business School

"Murmann's admirable book provides the most persuasive account, to date, for Germany's early leadership and long dominance of the synthetic dye industry after the momentous, serendipitous scientific discovery by a young Englishman in 1856. It is an account that employs a sharply focused, coevolutionary lens upon the differing historical experiences of Germany, Great Britain and the United States. The book calls attention to the ways in which the earlier development paths of the German states had equipped them, much more effectively than their potential competitors, to exploit the specialized research tools of synthetic organic chemistry, upon which commercial success was to become heavily dependent."
Nathan Rosenberg, Professor of Economics (Emeritus), Stanford University

"Johann Peter Murmann's book shows convincingly that competitive advantage, especially in the knowledge-intensive industries, is firmly rooted in national institutions. Blending quantitative analysis and case study evidence over a period of decades, he makes a major contribution to the fields of strategic management, organizational theory, and technological innovation."
Mauro F. Guillen, Dr. Felix Sandman Professor of International Management, The Wharton School, University of Pennsylvania

English Reviews

Journal of International Business Studies
Enterprise & Society
Academy of Management Review
STEP, American Political Science Association
Journal of Economic History

Economic History Net
Economic History Review
Contemporary Sociology
Chemical & Engineering News
Global Business Network

German Reviews



The Book in the News                 In English

ICIS Chemical Business, Issue 19, 2008
AGSM Magazine, Issue 1, 2006
Australian Financial Review, April 10, 2006
Book is featured in my Stanley Reiter Lecture, 2005
Book wins Schumpeter Prize, 2004
Klepper's Award Speech at Schumpeter 2004 (in pdf)  
Book wins Kellogg's Stanley Reiter Award, 2004
Kellogg World Spring 2004

                                                           In German WirtschaftsWoche   Page 1    Page 2  (in pdf)  
  Chemie in Unserer Zeit (in pdf)


You can order the book at Cambridge University Press or at:

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See some pictures from the synthetic dye industry and product labels from all over the world here.