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A new perspective on the innovator’s dilemma

Author

Listed:
  • Berglund, Henrik

    (Chalmers University of Technology)

  • Sandström, Christian

    (The Rato institute)

Abstract

Why do entrant firms sometimes gain the upper hand under conditions of discontinuous technological change? Previous research on this topic has either looked at the role of established competencies and/or firm incentives to invest in a new technology. In this paper we explore an alternative explanation. Drawing upon evidence from the ongoing transition from CCTV to digital, IP based video surveillance, we argue that entrant firms may be more prone to act entrepreneurially, i.e. more inclined to proactively create or transform markets and build ecosystems. As new technologies frequently require altered behaviour among customers and stakeholders, this capability is sometimes critical in order to succeed in a technological transition. Our contribution therefore lies in pointing out that not only may incentives to allocate R&D resources differ among entrants and incumbents, firms might also have different incentives to engage in entrepreneurial activities of creating or transforming markets.

Suggested Citation

  • Berglund, Henrik & Sandström, Christian, 2014. "A new perspective on the innovator’s dilemma," Ratio Working Papers 239, The Ratio Institute.
    • Handle: RePEc:hhs:ratioi:0239
    as

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    References listed on IDEAS

    as
    1. Julie Battilana & Bernard Leca & Eva Boxenbaum, 2009. "How actors change institutions : Towards a theory of institutional entrepreneurship," Post-Print hal-00576509, HAL.
    2. Cliff, Jennifer E. & Jennings, P. Devereaux & Greenwood, Royston, 2006. "New to the game and questioning the rules: The experiences and beliefs of founders who start imitative versus innovative firms," Journal of Business Venturing, Elsevier, vol. 21(5), pages 633-663, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Disruptive Innovation; Entrepreneurship; Incentives; Technological Discontinuities; business model; ecosystem.;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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