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The Response of Old Technology Incumbents to Technological Competition – Does the Sailing Ship Effect Exist?

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  • John Howells

Abstract

This article investigates whether firms react to a radical technological substitution threat by a deliberate acceleration of innovation in their existing technology – the ‘sailing ship effect’. There have been repeated claims that the effect has been significant as a source of innovation (Foster, 1988; Rosenberg, 1976; Rothwell and Zegveld, 1985; Utterback, 1996). Detailed reexamination of two cases thought to be exemplars of the effect reveals that it existed in neither. It is suggested that the characteristics of historical, technological substitution processes prompt misinterpretation based on superficial knowledge. Brief review of two other cases further supports this position. It is argued that if the phenomenon occurs, it is likely to be rare.

Suggested Citation

  • John Howells, 2002. "The Response of Old Technology Incumbents to Technological Competition – Does the Sailing Ship Effect Exist?," Journal of Management Studies, Wiley Blackwell, vol. 39(7), pages 887-906, November.
    • Handle: RePEc:bla:jomstd:v:39:y:2002:i:7:p:887-906
    DOI: 10.1111/1467-6486.00316
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    Cited by:

    1. Frank Rijnsoever & Leon Welle & Sjoerd Bakker, 2014. "Credibility and legitimacy in policy-driven innovation networks: resource dependencies and expectations in Dutch electric vehicle subsidies," The Journal of Technology Transfer, Springer, vol. 39(4), pages 635-661, August.
    2. Bernhard Dachs & Martin Hud & Christian Koehler & Bettina Peters, 2017. "Innovation, creative destruction and structural change: firm-level evidence from European countries," Industry and Innovation, Taylor & Francis Journals, vol. 24(4), pages 346-381, May.
    3. Hinloopen, J. & Smrkolj, G. & Wagener, F.O.O., 2013. "In Defense of Trusts: R&D Cooperation in Global Perspective," CeNDEF Working Papers 13-05, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
    4. Diekhof, Josefine & Cantner, Uwe, 2017. "Incumbents' responses to innovative entrants: A multi-country dynamic analysis," ZEW Discussion Papers 17-052, ZEW - Leibniz Centre for European Economic Research.
    5. Pearson, Peter J.G. & Foxon, Timothy J., 2012. "A low carbon industrial revolution? Insights and challenges from past technological and economic transformations," Energy Policy, Elsevier, vol. 50(C), pages 117-127.
    6. Howells, John, 2003. "Competition Derived From Innovation As A Substitution Threat," Working Papers 2003-2, University of Aarhus, Aarhus School of Business, Department of Management.
    7. Martin, Ben R., 2012. "The evolution of science policy and innovation studies," Research Policy, Elsevier, vol. 41(7), pages 1219-1239.
    8. Fritsch, Michael & Changoluisa, Javier, 2017. "New business formation and the productivity of manufacturing incumbents: Effects and mechanisms," Journal of Business Venturing, Elsevier, vol. 32(3), pages 237-259.
    9. Uwe Cantner & Josefine Diekhof, 2017. "Incumbents' Asymmetric Responses to Environmentally Friendly Entrants in the Automotive Industry," Jena Economics Research Papers 2017-004, Friedrich-Schiller-University Jena, revised 13 Jul 2017.
    10. Jeroen Hinloopen & Grega Smrkolj & Florian Wagener, 2016. "R&D Cooperatives and Market Collusion: A Global Dynamic Approach," Tinbergen Institute Discussion Papers 16-048/II, Tinbergen Institute.
    11. Klenner, Philipp & Hüsig, Stefan & Dowling, Michael, 2013. "Ex-ante evaluation of disruptive susceptibility in established value networks—When are markets ready for disruptive innovations?," Research Policy, Elsevier, vol. 42(4), pages 914-927.
    12. Mendonça, Sandro, 2013. "The “sailing ship effect”: Reassessing history as a source of insight on technical change," Research Policy, Elsevier, vol. 42(10), pages 1724-1738.
    13. Zhao, Yuntong & Jian, Zhaoquan & Du, Yushen, 2024. "How can China's subsidy promote the transition to electric vehicles?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 189(PB).

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