Knowledge Production and Diffusion

In terms of the second driver that boosts industry life cycle evolution, which is knowledge production and diffusion, it is important to spotlight the meaning of the term knowledge and to investigate the knowledge creation process before discussing

how it can boost the industry life cycle. The term knowledge refers to “facts, information, and skills acquired by a person through experience or education. The theoretical or practical understanding of a subject” (Oxford English Dictionary, 2014). According to Grant (2005), an industry is born and starts its Introduction phase as a result of new knowledge creation, which is seen in the invention of new products and the availability of the basic skills required to produce such a product. In the animation industry, this can be seen when as a period of very basic skills and limited techniques such as 2D CGI and simple styles of animation with fewer character details. These basic skills and limited techniques appear are due to the limited knowledge available about animation. This clearly applies to current Saudi animation production, and in particular the work from several Saudi studios such as Masameir and Bakheeta, which both utilise very simple characters that do not require a high level of skills to create. In addition, they both use 2D techniques using Adobe Flash, which is a less complex technique compared to the 3D animation that requires higher skills and complex software such as Maya. However, Saudi animation productions that are outsourced to studios in countries with Growth stage animation industries are more advanced in terms of the techniques utilised, such as 3D. More information about these two animation studios and other Saudi animation productions studios will be covered in Chapter Four, within the Historical Development section (see section 4.1.7).

Grant (2005) pointed out that an industry will move to its Growth phase when more knowledge is generated in the form of gradual inventions that improve the design and technical standard of products as market entrants seek to increase the quality and diminish the cost of their products. The knowledge diffusion of this improvement in

design and technical standards will assist other firms, who will start applying this improvement to their products. Alongside this, knowledge diffusion facilitates new firms entering the market. Knowledge diffusion is also important for the customer because it increases recognition of the product’s value (Grant, 2005). This type of knowledge diffusion boosts the industry cycle because it increases firms’

competitiveness as they seek to satisfy these knowledgeable customers. Therefore, the more knowledge generated and diffused, the more additional quality and innovation are added to the product. Accordingly, more customers will want the product and more firms will enter the market to offer this product (Grant, 2005). In the animation industry, this type of improvement is reflected in new techniques and the skills to apply them appropriately, such as using more advanced techniques including 3D CGI or motion capture to portray realistic movement for characters. Besides this, in Growth stage animation industries, style can be seen to have improved, with assorted styles and more details on offer. This can be seen in the improvements that occurred within both the Emirates and Egyptian animation industries, and both of these now compete as providers for outsourcing services in the Arab World. More information regarding how Egyptian and Emirates animation has improved is presented in Chapter Four, within the Historical Development sections.

Knowledge creation and diffusion generally result in improvements to the product. In addition, knowledge diffusion facilitates more firms entering the market. This results in a shift within the industry to its Mature stage, once it has improved its product and many firms are competing and offering variety in terms of the industry product. In the Mature stage, animation firms apply a variety of techniques that require very advanced skills and utilise a variety of styles that reflect the advanced knowledge that

they have. In addition, there are many firms, which demonstrates how much this knowledge is diffused. In the UK, which has a Mature animation industry, the availability of advanced knowledge has affected the techniques and skills that apply to its animation production and resulted in great improvements. For example, UK animation that uses stop motion techniques such as the work of Aardman Animation, requires advanced skills that are not available in Egypt and the Emirates, which are only in the Growth stage of their animation industries.

Thus, it is essential to understand how to encourage knowledge creation and diffusion in the field of animation industry to evolve the industry life cycle for the Saudi animation. Therefore, this study will investigate how the multiple case study countries encourage knowledge diffusion within the animation industry and what are the factors that assist and facilitate this knowledge creation and diffusion.

It is widely assumed that knowledge is the rationale of competitive between firms (Malmberg and Power, 2005). Broadly speaking, that establishing industrial cluster encourages the knowledge diffusion. Thus, it has been highly recommended by policy makers for developing a given industry (Weber, 1929; Marshall, 1980; Porter, 1990;

Baptisa & Swann, 1998). Therefore, in this study it is essential to review cluster theory to understand how this phenomenon assists knowledge diffusion. In particular, it will consider the issue of establishing epistemological clusters (Hakanson, 2005;

Huggins, 2008; Evers et al, 2010).