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Emergence of entrepreneurs following exogenous technological change

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  • Richard J. Arend

Abstract

This paper explains how, after an exogenous technological change occurs, entrepreneurs displace incumbents who were ex ante capable of exploiting any innovations that resulted from the change. The model initially considers classical economic assumptions in the context of process innovations, and then its robustness to uncertainty, bounded rationality, firm asymmetry, and product innovations are discussed. The model is preliminarily tested against industry trends, using both results from an analysis of the information technology sector and from the literature. The paper does not suffer from the inconsistency of explaining how capable incumbents are displaced by resorting to characterizations of incumbents as incapable due to some inefficiency; the paper models incumbents as efficient yet rationally choosing, in some instances, to be displaced. Copyright © 1999 John Wiley & Sons, Ltd.

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  • Richard J. Arend, 1999. "Emergence of entrepreneurs following exogenous technological change," Strategic Management Journal, Wiley Blackwell, vol. 20(1), pages 31-47, January.
    • Handle: RePEc:bla:stratm:v:20:y:1999:i:1:p:31-47
    DOI: 10.1002/(SICI)1097-0266(199901)20:13.0.CO;2-O
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    Cited by:

    1. Christian Haddad & Lars Hornuf, 2016. "The Emergence of the Global Fintech Market: Economic and Technological Determinants," Research Papers in Economics 2016-10, University of Trier, Department of Economics.
    2. Lucio Fuentelsaz & Elisabet Garrido & Juan P. Maicas, 2015. "Incumbents, technological change and institutions: How the value of complementary resources varies across markets," Strategic Management Journal, Wiley Blackwell, vol. 36(12), pages 1778-1801, December.
    3. Olivier Meier & Aurélie Sannajust, 2021. "The smart contract revolution: a solution for the holdup problem?," Small Business Economics, Springer, vol. 57(2), pages 1073-1088, August.
    4. Burgers, J.H. & van den Bosch, F.A.J. & Volberda, H.W., 2007. "The Impact of Corporate Venturing on a Firm’s Competence Modes," ERIM Report Series Research in Management ERS-2007-061-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    5. Alkemade & Simona Negro & Neil Thompson & Marko Hekkert, 2011. "Towards a micro-level explanation of sustainability transitions: entrepreneurial strategies," Innovation Studies Utrecht (ISU) working paper series 11-01, Utrecht University, Department of Innovation Studies, revised Apr 2011.
    6. Christian Haddad & Lars Hornuf, 2019. "The emergence of the global fintech market: economic and technological determinants," Small Business Economics, Springer, vol. 53(1), pages 81-105, June.
    7. Nepelski, Daniel, 2010. "Competition and Innovation: ICT- and non-ICT-enabled Product and Process Innovations," MPRA Paper 26243, University Library of Munich, Germany.
    8. Lars Hornuf, 2016. "The Emergence of the Global Fintech Market: Economic and Technological Determinants," IAAEG Discussion Papers until 2011 201606, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    9. Shaker A. Zahra & Satish Nambisan, 2011. "Entrepreneurship in global innovation ecosystems," AMS Review, Springer;Academy of Marketing Science, vol. 1(1), pages 4-17, March.
    10. Christian Haddad & Lars Hornuf, 2016. "The Emergence of the Global Fintech Market: Economic and Technological Determinants," CESifo Working Paper Series 6131, CESifo.
    11. Alexandra Palzkill & Karoline Augenstein, 2017. "Business model resilience – understanding the role of companies in societal transformation processes [Geschäftsmodell-Resilienz – Zur Rolle von Unternehmen in gesellschaftlichen Transformationsproz," Sustainability Nexus Forum, Springer, vol. 25(1), pages 61-70, June.
    12. Lars Hornuf, 2016. "The Emergence of the Global Fintech Market: Economic and Technological Determinants," IAAEU Discussion Papers 201606, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    13. Olivier Meier & Aurélie Sannajust, 0. "The smart contract revolution: a solution for the holdup problem?," Small Business Economics, Springer, vol. 0, pages 1-16.

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