Path Dependence and Creation Quotes

“Although routines and standards are clearly related, they are not identical. As Kindleberger (1983) pointed out, standards are public goods; they reflect interpersonally shared knowledge. We might even say that a standard is a certain kind of “public” routine that helps to coordinate private (individual or intraorganizational) routines. But routines are not only about coordination. As we saw, routines embody potentially useful—we might even say productive—knowledge. In the terminology of Ryle (1949), they reflect “knowledge how.” In some cases, such useful knowledge can be knowledge about how to transact, the possession of which thus reduces transaction costs. My internalized knowledge that I always ought to keep to the right (not the left) as another car approaches might be an example, at least if we construe the interaction between oncoming drivers metaphorically as a transaction. But the skillful exercise of a particular technique for suturing an incision would also be a routine, and not one obviously involving the reduction of transaction costs. Useful knowledge applied to problems of transacting is a special case of a more general phenomenon. As Winter (1988) has suggested, one needs to have economic capabilities (an effective repertoire of routines) in order to be able to transact as well as to be able to produce.6 Like standards, routines can be both enabling and constraining. The possession of an effective repertoire of routines would be crucial to the successful production of product A; but possessing that repertoire might also inhibit a transition to the production of product B. Routines are generally as hard to unlearn as to learn, which may give the advantage in situations of radical innovation to those who have never learned the routines in the first place.7 This is no doubt what Schumpeter (1934) had in mind when he wrote that “new combinations are, as a rule, embodied, as it were, in new firms which generally do not arise out of the old ones but start producing beside them;... in general it is not the”
― Raghu Garud, Path Dependence and Creation