Organizational foundations of economic learning

This paper extends the concept of organizational learning to take into account the effects of institutional and economic structures that impinge on the firm's capacity to acquire new competences. Examples from East Asia, where firms have led the process of high-technology industrialization, illustrate the proposition that such economic structures can have the effect of greatly accelerating organizational learning. The paper makes a novel contribution in treating such structures (networks, clusters, alliances) as entities in themselves, and the learning that takes place by firms within them as the acquisition of higher-order competences. Three such forms are identified: first-order economic learning takes place within organizations; second-order economic learning takes place between organizations, and third-order economic learning takes place in structures that transcend firms and networks. National variations in such structures are illustrated utilising national VLSI programs in Japan, Korea and Taiwan in the semiconductor industry.