The most interesting feature of this article is its nice combination of population ecology and the network approach. It focuses on the influence of industrial “environments” on organizations. The organizational position in the environment is called a “niche,” which considerably influences organizational performance. “Competition” between organizations in a niche is the focal process through which performance or survival is determined. All of the concepts such as environment, niche, and competition are from population ecology.

Then, where is network approach? Here it is. Niches have multiple domains and the authors identified a fundamental domain of the semiconductor industry which affects the organizations’ positions in other domains. That domain is technology. An organization's niche in the technological environment is fundamental in the semiconductor industry from 1984 to 1991. Until now, the whole story-line is from population ecology. Then, what is the technological environment and how can we identify it? Here starts the network approach.

The technological environment is a sort of network among innovations. Along the time axis, innovations in the industry have developed in connection with one another (see Fig.1 on p664). Nodes of the network are innovations and the relations between the nodes are citations of one innovation by another. The relation follows the reverse direction in time and is thus asymmetric because one innovation can cite only past innovations already known. Then, any given organization has several innovations as resources and thus is ”imbedded” in the network of the technological environment. Its position in the network is its niche in the domain.

If an organization has a common area of its niche with other organizations, it is located in a crowded niche and thus is in a severe competition which decreases its life chances or performance. In the case of the semiconductor industry, an organization is in a crowded niche if it relied on the same previous innovations as other organizations (see the definition of crowding on p666). In terms of network theory, the degree of crowding is an organization's structural equivalence with other organizations, or its degree of indirect ties with other organizations through the technological network. Direct ties between contemporary innovations have a different meaning from crowding. If an organization’s innovations are frequently cited by other organizations, it implies a high status for the organization. The high status helps its performance.

In sum, the authors identified the technological niches of organizations with two dimensions: competitive crowding and status. By the two dimensions, each organization can be positioned in the technological environment (see Fig.3 on p682). This identification of the environment and the two dimensions was possible owing to the network approach: the identification of relations between innovations and the distinction between direct and indirect ties between the innovations. First of all, organizations are imbedded in the network.

This combination of network approach and population ecology is not only theoretical but also methodological. It’s not an easy task to identify or operationalize the abstract concept of niche in population ecology. The network approach makes the task possible and allows empirical tests of theoretical hypotheses. The authors confirmed the negative effect of crowding and the positive effect of status on organizational performance. In addition, they found an interaction between the two effects: the positive effect of status declines with the crowding of its niche. Why? An uncrowded niche means that the niche is new and thus uncertain. In such an environment, citations from other organizations enhanced the perceived quality of an organization's technology. But a crowded niche implies that the organization’s technology is redundant. Citations from other organizations are not a strong indicator of quality in a field where a great deal of knowledge about organizations and their technologies exist.