Absorptive capacity, knowledge circulation and coal cleaning innovation: The Netherlands in the 1930s

Abstract

Before World War II, Dutch State Mines, the national, state owned coal corporation, was confronted with major challenges, specifically that foreign coal was sold at dumping prices in the home market. At the same time, coal cleaning needed to be improved in order to offer higher quality coal against lower coal processing costs. In this paper we illustrate how State Mines relied on its innovative capacity in order to overcome the economic, technological and market changes. The coal cleaning innovations at State Mines show how absorptive capacity was of prime importance for the firm's innovative capacity. External knowledge acquisition as well as internal knowledge building proved to be relevant, although the balance changed over time. While initially acquisition and assimilation of external knowledge (potential absorptive capacity) were essential to improve the existing coal cleaning processes, internal knowledge building was needed to come to real improvements in coal cleaning. The establishment of a licensing company was essential to exploit this knowledge. An important feature was that State Mines was always well aware of its lack of capabilities and knowledge and open to search for and learn from knowledge outside its firm boundaries. Moreover, expectations determined the search for external knowledge.

Keywords:

• innovation
• knowledge
• absorptive capacity
• expectations
• Dutch State Mines
• coal cleaning
• hydrocyclone
• Tromp system
• loess washing system
• Barvoys system

Acknowledgements

This paper is part of the research programme ‘The co-evolution of the Dutch knowledge infrastructure and innovations in Dutch business of the Business in the Netherlands in the twentieth century' (BINT) ( http://www.bintproject.nl/innovatie). This project focuses on knowledge transfer in conjunction with innovations in Dutch businesses and is funded by the Netherlands Organisation for Scientific Research (NWO). The paper benefited greatly from the suggestions made by the participants in this project: Eric Berkers, Harry Lintsen, Arjan van Rooij and Frank Veraart. The authors thank the editor, Harm Schröter for his helpful comments.

Notes

1. The literal translation of Staatsmijnen is State Mines and will be used in this article. Staatsmijnen named itself Dutch State Mines in English. When the transition to the chemical industry was made, it was renamed DSM, as it is still known today.

2. According to Lane, Koka and Pathak (2006), who analysed almost 200 articles in this field, a major shortcoming of the literature on absorptive capacity is the limited attempts to revise and expand Cohen and Levinthal's (1990) original definition.

3. One of the shortcomings of the studies on absorptive capacity as signalled by Lane et al. (2006) is the lack of attention paid to the process by which absorptive capacity is developed. They find this very surprising because they stress that Cohen and Levinthal's (1999) view of the construct clearly encompasses the need to understand the dynamics within the organisation that could lead to the ability to recognise, assimilate and utilise useful external knowledge (Lane et al., 2006).

4. Van Lente (1993) calls these levels specifications, functions and scenarios.

5. This is a quote from 1 Thessalonians 5:20–22, ‘Put all things to the test, keep what is good and avoid every kind of evil.’ However, apostle Paul is not asking Christians for evolutionary innovation, but to test their beliefs in order to only keep the good.

6. The exploitation of the Sophia-Jacoba mine started in 1912. For the history of the Sophia-Jacoba mine and some background on coal cleaning development, see Farrenkopf and Przigoda (1997).

7. A number of follow-up visits were conducted, for example on 20 January 1934, 2 August 1935.

8. This washery had to process anthracite.

9. Coal exploitation in the area of Domaniale Mine started around 1115. In 1715 it produced 150,000 tonnes coal per year with 800 miners.

10. The visit was conducted before 14 March 1933. RHCL, 17.04/2162, Opmerkingen betreffende conclusie van ir. Tromp dd. 30.12.1949, 19.1.1950.

11. Reference is made to a letter which Domaniale Mine sent to Gewerkshaft Sophia-Jacoba, 14 March 1933 (RHCL, 17.04/2162).

12. The Tromp system was so successful that in the 1980s Sophia-Jacoba's new washery used a Tromp magnetite suspension instead of the De Vooys baryte-clay suspension.

13. For example, State Mines used it to evaluate the performance of its washeries.

14. This was later developed into another State Mines washing system.

15. This pilot installation was actually a Chance sand-suspension washing installation. This test was communicated by State Mines with De Vooys during a visit.

16. Probably State Mines also used cyclones for gas cleaning. But references are unclear or not dated.

17. Before Driessen, the paper industry had already experimented with cyclones and liquids, as patents show (1937).

18. In hindsight Driessen was lucky that he first tried the cyclone with a loess suspension. When the cyclone was tried with a baryte-clay suspension, it appeared that the baryte particles were too small to be separated (Driessen, 1939a, p. 931).

19. The Central Laboratory included the Research Department since 1940.

20. Argued by De Vooys to the Commissarissen of Barywa.

21. In October 1942 a contract was drafted to make it possible for State Mines to exploit coal cleaning licences.