When markets are dynamic, it’s important that firms become dynamic too. Listening and understanding what's going on in the environment, outlining what the opportunities are, what the threats are is extremely important. Host George LaBlanc and Organizational Economist, David Teece unpack his Dynamic Capabilities Framework.
In this episode, David and Greg tackle the importance of making sense of the organization’s learning, formulating a view of what this means for your investment behavior, quickly deciding and investing behind those opportunities, or protecting against those threats. When the economic and entrepreneurial activities revolve around innovation and market power, these things will help firms pivot quickly.
Tune in to the end as they talk about the Schumpeterian model and what Neo-Brandesian can learn from an innovative and entrepreneurial-centric economy. Make sure you’re all ears to understand the basic assumptions of the dynamic capabilities framework. Pick up ideas on how your organization’s core competencies can be used to modify short-term competitive positions, later on using them to build a longer-term competitive advantage.

Episode Quotes:
What are Dynamic Capabilities?

“I've found it useful to begin describing dynamic capabilities by telling you what it's not. First of all, it's a capability but there are ordinary capabilities, which we all know we can walk, we can talk, and organizations can do certain things. Those very important capabilities. If there are other kinds that result in you getting everyday work done, it's ordinary capabilities. When it's about change and when it's about actually figuring out what the next big thing is and effectuating change, that's a capability that I call dynamic.”

On R&D and Economics Being Often Overlooked by Firms:

“Capture the biggest share of the spillovers. That way, you know, you get the rewards higher and you can continue to invest more in research and development, in the discovery [...] and this is another area where I think economics is not paid sufficient attention. There's an assumption that if you invent something everything's patentable and protectable when it’s that motivated.”

Why is doing the best form of learning?

“I do think that in a world of deep uncertainty, you're never going to know the answer through market research. You never gonna know the answer with certainty at any point in time. So you've got to start and that's the whole lean startup idea. In doubt, do. Why? Because you'll learn and then you can adjust and pivot.”

Show Links:
David Teece Official Dynamic Capabilities Website: https://www.davidjteece.com/dynamic-c...
David Teece on LinkedIn:   / davidteece  
David Teece Profile on U.C. Berkeley Haas School of Business: https://haas.berkeley.edu/faculty/tee...
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Order Book: Economic Performance and the Theory of the Firm: Selected Papers of David J. Teece: https://amzn.to/3cyBe6k
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Order Book: The Multinational Corporation and the Resource Cost of International Technology Transfer: https://amzn.to/3wifbbN