The creative destruction of existing industries as a consequence of discontinuous technological change is a central theme in the literature on industrial innovation and technological development. Established competence-based and market-based explanations of this phenomenon argue that incumbents are seriously challenged only by 'competence-destroying' or 'disruptive' innovations, which make their existing knowledge base or business models obsolete and leave them vulnerable to attacks from new entrants. This paper challenges these arguments. With detailed empirical analyses of the automotive and gas turbine industries, we demonstrate that these explanations overestimate the ability of new entrants to destroy and disrupt established industries and underestimate the capacity of incumbents to perceive the potential of new technologies and integrate them with existing capabilities. Moreover, we show how intense competition in the wake of technological discontinuities, driven entirely by incumbents, may instead result in late industry shakeouts. We develop and extend the notion of 'creative accumulation' as a way of conceptualizing the innovating capacity of the incumbents that appear to master such turbulence. Specifically, we argue that creative accumulation requires firms to handle a triple challenge of simultaneously (a) fine-tuning and evolving existing technologies at a rapid pace, (b) acquiring and developing new technologies and resources and (c) integrating novel and existing knowledge into superior products and solutions.
The creative destruction of existing industries as a consequence of discontinuous technological change is a central theme in the literature on industrial innovation and technological development. Established competence-based and market-based explanations of this phenomenon argue that incumbents are seriously challenged only by 'competence-destroying' or 'disruptive' innovations, which make their existing knowledge base or business models obsolete and leave them vulnerable to attacks from new entrants. This paper challenges these arguments. With detailed empirical analyses of the automotive and gas turbine industries, we demonstrate that these explanations overestimate the ability of new entrants to destroy and disrupt established industries and underestimate the capacity of incumbents to perceive the potential of new technologies and integrate them with existing capabilities. Moreover, we show how intense competition in the wake of technological discontinuities, driven entirely by incumbents, may instead result in late industry shakeouts. We develop and extend the notion of 'creative accumulation' as a way of conceptualizing the innovating capacity of the incumbents that appear to master such turbulence. Specifically, we argue that creative accumulation requires firms to handle a triple challenge of simultaneously (a) fine-tuning and evolving existing technologies at a rapid pace, (b) acquiring and developing new technologies and resources and (c) integrating novel and existing knowledge into superior products and solutions.
The multi-level perspective on sustainability transitions positions established firms (incumbents) as defenders of existing technologies at the "regime level". By contrast, it positions new entrants at the niche level, as promoters of new technologies. This paper challenges the positioning of firms as actors on either regime or niche levels. Based on a comparative analysis of technology strategies in the heavy vehicle industry, the paper shows that established firms are active at both levels, developing several technology alternatives simultaneously. This means that incumbents' technology strategies determine important parts of the required niche-regime interactions. The paper also shows how incumbents may pursue contrasting technology strategies. While some adopt a dualistic approach, keeping regime and niche level activities technologically and commercially separate, others develop integrated strategies where niche activities are leveraged to impact upon the regime level. The cases studied illustrate how the success of these integrated strategies depends on the emergence of bridging policies. Such policies are relevant both for linking early niche markets to broader regime-level markets, and for supporting the further technological advancements of niche markets.
In order to avoid misfits between technology and product concepts and prevent problems related to the fit of the product design and the production process, the interfaces between technology development, product development and production must be managed. In this paper the critical challenges related to these interfaces are analysed and discussed and a tentative model is formulated. The study builds on in-depth case studies of ten product development projects at five manufacturing firms, two workshops and a questionnaire. Results indicate that in the technology development/product development interface factors related to the synchronization (i.e. timing) and transfer management are ranked as most important. For the product development/production interface factors related to transfer management seem to be most important. The tentative interface management model includes a risk assessment of six contextual factors; the complexity and degree of change in the product, the complexity and degree of change in the production process, the degree of technological novelty, the geographical and organizational dispersion between technology development and product development, the organizational and geographical dispersion between product development and production and the market uncertainty in the project, and appropriate recommendations are devised to handle the specific risks related to these factors.
Reducing transport emissions, in particular vehicular emissions, is a key element for mitigating the risks of climate change. In much of the academic and public discourse the focus has been on alternative vehicle technologies and fuels (e.g. electric cars, fuel cells and hydrogen), whereas vehicles based on internal combustion engines have been perceived as close to their development limits. This paper offers a different perspective by demonstrating the accelerated improvement processes taking place in established combustion technologies as a result of a new competition between manufacturers and technologies, encouraged both by more stringent EU legislation and new CAFE levels in the US. The short-term perspective is complemented by an analysis of future improvement potentials in internal combustion technologies, which may be realized if efficient regulation is in place. Based on a comparison of four different regulatory approaches, the paper identifies the need for a long-term technology-neutral framework with stepwise increasing stringencies, arguing that this will encourage continual innovation and diffusion in the most effective way.
Purpose – The purpose of this paper is to provide a comprehensive overview of challenges related to interfaces in industrial innovation processes, together with suggestions on how these interface challenges can be managed. The paper investigates similarities and differences between the interfaces and identified challenges in terms of required managerial issues. Design/methodology/approach – The result presented in this paper is based on in-depth case studies of ten product development projects from five different manufacturing firms in Sweden. The empirical results are supplemented with results from a review of relevant literature. Findings – To manage the interface challenges market uncertainty, technological uncertainty, product complexity and/or degree of change in product, production complexity and/or degree of change in production, geographical and/or organisational dispersion between technology development and product development, and between product development and production, it was found that several issues have to be considered. Most of the identified managerial issues concern transfer synchronisation, transfer management and transfer scope. The authors have shown that despite many differences between the different phases in the innovation process, a quite concordant picture emerges when it comes to how to manage interface challenges. Practical implications – The classification of managerial issues into transfer synchronisation, transfer management and transfer scope provides an overview of areas that need to be addressed to manage interface challenges during the industrial innovation process. This knowledge provides some guidance for managers aiming at a smooth transition process, from technology development to production. Originality/value – By addressing both the interface between technology development and product development, and between product development and production in the same study, the authors have been able to provide a comprehensive overview of managerial issues related to interfaces challenges in industrial innovation processes in manufacturing firms.
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