Walter W. Powell

Sociologists and anthropologists have long been concerned with how individuals are linked to one another and how these bonds of affiliation serve as both a lubricant for getting things done and a glue that provides order and meaning to social life. The attention to networks of association, which began in earnest in the 1970s, provided welcome texture and dynamism to portraits of social life. This work stood in stark contrast to the reigning approaches in the social sciences. In contrast to deterministic cultural (oversocialized) accounts, network analysis afforded room for human agency, and in contrast to individualist, atomized (undersocialized) approaches, networks emphasized structure and constraint (Granovetter, 1985). Network studies offered a middle ground, a third way, even if no one was quite sure whether networks were a metaphor, a method, or a theory (Barnes 1979). But the sociologists and anthropologists who initially studied networks did not pay sustained attention to economic activity, although some industrial sociologists (Roy, 1954; Dalton, 1959) had long stressed the role of informal networks as an antidote to formal organization practices and structures.

Our contribution to the study of organisations will be greatly enriched if we are able to discern the sources of institutional patterns, their subsequent elaboration and potency, the degree to which these forces are sustained, and the kinds of settings where they operate with the greatest resonance. This agenda is consonant with the core insights of the institutional approach: modern organisations are more likely to arise, expand, and survive in those settings where the social environment creates and sustains the basic building blocks of formal, rational organisation.

We define the knowledge economy as production and services based on knowledge-intensive activities that contribute to an accelerated pace of technical and scientific advance, as well as rapid obsolescence. The key component of a knowledge economy is a greater reliance on intellectual capabilities than on physical inputs or natural resources.

Powerfully positioned middlemen extract value by interrupting or distorting information.

When the knowledge base of an industry is both complex and expanding and the sources of expertise are widely dispersed, the locus of innovation will be found in networks of learning, rather than in individual firms.