Researchers in technology and innovation, organization research, and product standardization in economics have noted that innovations may become the dominant designs in their product classes for reasons that may have little to do with design. The emergence process for dominant designs has typically been viewed as a black box process involving a sophisticated interaction of technological and non‐technological factors. This paper shifts the discussion to a strategic perspective. It argues that firms can frame the emergence process and can systematically manage elements of it in the pursuit of competitive advantage from innovation. An analytical framework is developed and discussed, with particular emphasis on the roles of certain external conditions, non‐technological forces, and complementary assets, as well as the implications for R&D strategists and for future research. Four distinctive examples illustrate different aspects of the framework's utility.

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This chapter presents a conceptual model of strategic choice for high-technology start-up firms in the face of network externalities—the strength of the market’s preference for standardized technology. Our model suggests that the commercialization strategies followed by such a firm will depend on the type of network externalitites—direct vs. indirect—as well as the degree of appropriability—the firm’s ability to retain the value of innovation. We offer a number of propositions generated by the model and discuss their implications.

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