Innovation ecosystems and the pace of substitution: Re‐examining technology S‐curves

Abstract

Why do some new technologies emerge and quickly supplant incumbent technologies while others take years or decades to take off? We explore this question by presenting a framework that considers both the focal competing technologies as well as the ecosystems in which they are embedded. Within our framework, each episode of technology transition is characterized by the ecosystem emergence challenge that confronts the new technology and the ecosystem extension opportunity that is available to the old technology. We identify four qualitatively distinct regimes with clear predictions for the pace of substitution. Evidence from 10 episodes of technology transitions in the semiconductor lithography equipment industry from 1972 to 2009 offers strong support for our framework. We discuss the implication of our approach for firm strategy. Copyright

Maneuvering in Poor Visibility: How Firms Play the Ecosystem Game when Uncertainty is High

“…Firms understand clearly which assets they can leverage in ecosystems and derive a concomitant design of technological and social interdependencies by selecting the right partners (Adner & Kapoor, 2010;Adner, 2012;Adner & Kapoor, 2016;Kapoor & Lee, 2013;Kapoor & Furr, 2015). Alternatively, they discover technologies and industry-level value systems or architectures as given sets of interdependencies in which they need to identify and occupy the strategic bottlenecks to attain control (Baldwin & Woodard, 2007;Baldwin, 2015;Hannah & Eisenhardt, 2015;Iansiti & Levien, 2004;Jacobides & Tae, 2015;Pagani, 2013) (arrow A).…”

Managing Innovation Paradox in the Sustainable Innovation Ecosystem: A Case Study of Ambidextrous Capability in a Focal Firm

“…A sustainable innovation ecosystem includes four entities: the focal firm, upstream component suppliers, downstream customers, and complementors [17]. Moreover, component refers to the outputs of upstream suppliers bundled by the focal firm into its products and complement means other offers alongside the focal player's products bundled by downstream customers [18].…”

“…Adner and Kapoor [17] The pace of technology substitution is influenced by how the sustainable innovation ecosystem responds to challenges and takes advantage of opportunities. The focal firm promotes innovation ecosystems with other organizations.…”

“…Existing studies consider innovation ecosystems as the integration of focal firms and other complementary enterprises like their upstream and downstream suppliers or as three communities-research, development, and application [7,17]. These systems focus on focal firms' overall product development process and provide a macro view of the structure of innovation ecosystems and their interrelation; however, it is difficult for them to highlight the inherent characteristics and nature of themselves in space product innovation in the case of this research.…”

“…Few works have discussed focal firms' management of paradoxes in the sustainable innovation ecosystem from this perspective before [8,52]. For example, Adner and Kapoor claim that focal firms should conduct vertical integration management of key components in interdependent ecosystems and promote technological transformation and substitution [17]. However, they did not discuss the management of multiple innovation paradoxes.…”