incremental may be supplied on the basis of intensified

incremental customer specific machinery development towards basic research andradical innovation in the field of microelectronics. As a result he observed a growingneed for and practice of diagonal cooperation between, for instance electrotechnicalfirms like Bosch and machine tool firms like Trumpf in Stuttgart (ibid: 93). As statedabove, this was challenged by statistical data on the actual relevance of diagonalcooperation (Heidenreich and Krauss 1998; Knodt 1998). Against the latter we claimthat such statistics do not take account of the exchange of collective goods. Anotherreason why this analysis could be misleading is that machinery parts are moreregularly supplied and visible in these statistics than are steering components. Thelatter may be supplied on the basis of intensified cooperation. In our interviews wefound that such cooperation was becoming increasingly frequent.It has not been sufficient for firms to cooperate with customers, because these didnot have knowledge of microprocessor technology. The influence on machinerydesign changed towards a greater importance of visions for automation andflexibility created in universities, big firms and research institutes. Because themoney for technology policy and innovation was going to both public supportorganizations as well as big firms, the embedded networked firm model becameincreasingly relevant for Stuttgart as a paradigm. In our empirical research we foundthat such cooperation was essential for the survival of the local economy. Firmswhich specialized in automatic grinding cooperated with a large electrotechnicalfirm; if a machine tool firm ran into serious problems during the phase in whichengineers constructed the grinding machine and even later, experts from the big firmcame to help on a non-contractual basis (Interview BW-F-06). Another interviewrevealed how both sides gained from such cooperation, because the big firms did notknow how to adapt their software products to the specialized machinery – forinstance hydraulic presses – while the machinery firms lacked the capacity todevelop CNC technology entirely on their own (Interview BW-F-15). After havingcooperated both firms would establish a regular supply relationship. Thus, theadaptation of this technology was not a big problem for Stuttgart firms. Workers hadbeen qualified in-house as well as in seminars of the big firms. (Courses forretraining had simply been bought by SMEs and are thus a good example ofstraightforward market governance.)However, the shift towards a ‘technology-push paradigm’ in innovation, which wasnecessary to sustain the competitiveness of high quality machine tool products,created the later criticized effect of over engineering (Cooke and Morgan 1998). This


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