The interplay between standardization and technological change

Standardization is an important yet underrated economic alignment mechanism, where the rate and direction of technological change is being negotiated between firms. An important aspect is the knowledge positions that firms have in such technologies. Strong knowledge positions can increase bargaining power to get access to other parties’ knowledge, and/or generate licensing revenues. In the recent literature, so-called essential patents have been used as an indicator for firms’ knowledge positions in standardized technologies. These patents are found to be ore valuable and have a longer citation tail than ‘average’ patents. In this paper, we explore alternative ways to determine firms’ knowledge position, based on network analysis and trajectories. We also propose extensions to already known methodologies. Our aim is to determine whether this alternative methodology better matches the technical/historical accounts of the technology field. To do so, we also look in detail at the strategic conduct of the firms in question. We present empirical results based on data from the field of mobile telecommunications. We conclude that, for our case, the various network-based methodologies offer better insights into actual knowledge positions. We expect our findings to hold in standard-based industries but likely also in other high-tech industries.