Comment: Exploring the Context of Use

I am grateful to JoAnne Yates and to Hagley Mills for offering us the opportunity to focus on the subject of the role of user firms in developing technology. This theme has been implicit in much of my work on the history of innovating companies, but I have written my histories of innovation and innovative companies from the viewpoint of the primary innovators, the developers of technologies.¹ I agree with JoAnne that business historians have much to contribute to a more nuanced understanding of the role of the user firm. Thanks to management scholars like Eric von Hippel, 'user need' is a common notion in the management literature on innovation, but it is relatively rare for historians to examine innovations from the perspective of an adopting firm or industry, as JoAnne has done with the life insurance industry. It is rarer still for historians to examine both perspectives at the same time—to look at the nature of the innovating relationship.² In these comments I will draw examples from my own work on innovation—principally at RCA, Alcoa, Corning, and Xerox—to consider two different kinds of user firms that have influenced the shape of developing technologies. I want to suggest also that at the firm level the context of use extends beyond the physical and social dimensions that JoAnne has pushed us to consider, to encompass strategic and philosophical dimensions as well.

JoAnne points out that historians who have considered the influence of use in the past have tended to take a social constructionist point of view, primarily interested in the actual physical function and meaning of technologies for individual end users or operators. In this vein they have typically focused on consumers—such as early users of telephones or bicycles—although paying less attention to the commercial aspects of innovation. JoAnne urges us as business historians to focus on those who make the decision to acquire or invest in a technology for the purposes of the firm as a whole, stressing that each firm has a different way of configuring a technology for its own purposes.

First let me make a distinction between two types of user firms—the Innovating User and the Enterprise User. Both types have historically been active collaborators with major innovators. The first is the firm that takes an interest in a developing technology for its own sake, because the user firm has a need for the potential new functionality, or recognizes an opportunity it would create. I will refer to these firms as 'Innovating Users' and they are typically concerned with the performance of the technology itself—its ability to deliver beyond the current state of the art in some way. I want to suggest that the nature of its relationship with the primary innovator is quite different from that of the second type of firm user, the 'Enterprise User.' This firm takes an interest in a developing technology for strategic reasons of its own. Although the Innovating User tends to get involved with a supplier developer and make adoption decisions at the level where performance is likely to matter, the Enterprise User tends to make technology use decisions centrally.

The Enterprise User tends be more self-contained technologically, to define and specify its own requirements, and to prefer to deal with other enterprises as suppliers and customers. Primary developers of new technologies are often drawn to Enterprise Users for their high-volume needs and their defined sets of requirements. Enterprise Users are also attractive to technology developers because of their deep pockets and funds of expertise. Anxious to take advantage of these attributes, developers may pay less attention to the ulterior motives Enterprise Users may also have: strategic purposes that may not be optimal for the functionality of the technology. For Enterprise Users are generally interested in lowest capital cost and low-cost performance above everything else. This overriding concern tends to cause them to suppress leading edge performance in favor of greater certainty in terms of cost and timing. Some Enterprise Users may actually want to acquire or influence a technology to slow or control...