Exploration, exploitation and innovation performance: disentangling the evolution of industry

Abstract

The evolution of industry has recently attracted the attention of scholars studying the relationships between exploration and exploitation strategies and innovation performance. Surprisingly, although extant research has already acknowledged its multidimensional character, it has only been analyzed in an aggregate fashion. In this paper, we distinguish two components of the evolution of industry, the pace of market evolution and the pace of technology evolution, and we elaborate on their different impacts in the context of exploration and exploitation strategies. More precisely, we argue that while a rapid pace of technology evolution has opposite impacts on the relationships between exploration (positive), exploitation (negative) and innovation performance, a rapid pace of market evolution positively affects both exploration and exploitation. Our findings provide substantial support for our prediction using a large panel of Spanish innovating firms for the period 2008-2012.

The Dynamic Process of Ambidexterity in Eco-Innovation

“…Furthermore, although the literature argues that firms have better results when they perform exploration [82] and can thus pull ahead of their competitors [83], our analysis of data over five years suggests that firms that perform eco-innovation maintain a balance, focusing on new products in some years and on unmodified products in others.…”

“…Govindarajan and Trimble [81] argue that firms with exploitation strategies are oriented to achieving short-term results, which are safer. Organizations that choose the logic of exploration, in contrast, can achieve greater economic returns [82], since they develop processes and products before their competitors do [83].…”

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“…So, in India there is an Aadhaar system. Aadhaar is a 12-digit unique identification number that can be obtained by residents of India based on their biometric and demographic data (Borman et al, 1992;Bernal et al, 2019).…”

The Impact of Research and Development and Professional New Hiring on Organizational Innovation

“…We adopted Bedford, Bisbe, and Sweeney's (2019) performance measurement system that broadly categorizes organizational innovation into incremental achievements and radical achievements. Thus, radical achievements in context were viewed as entirely new processes or products/services while incremental achievements represented improved processes or products/services, (Bernal, Maicas, & Vargas, 2019;Holmquist & Johansson, 2019).…”