IDEAS home Printed from https://ideas.repec.org/a/eee/respol/v46y2017i2p388-403.html
   My bibliography  Save this article

Preconditions, windows of opportunity and innovation strategies: Successive leadership changes in the regional jet industry

Author

Listed:
  • Vértesy, Dániel

Abstract

We analyse the drivers of two successive leadership changes in the regional, or mid-sized jet market, a particularly dynamic segment of the commercial aircraft industry. In the first instance, Bombardier, a Canadian newcomer, assumed leadership over the incumbents, BAe and Fokker, in 1995. In 2005, the Brazilian firm, Embraer, became the market leader in terms of number of regional jet deliveries. Our theoretical framework considers discontinuities in the building blocks of sectoral innovation systems as windows of opportunity for which challenger firms can devise strategic responses allowing them to assume market leadership. It also considers preconditions as necessary capabilities limiting the number of potential challenger companies. The analysis of leadership change shows that more efficient engines and technological improvements in subsystems, changing oil prices, business cycles, liberalization of air transport services, scope clauses and government interventions provided technological, demand and regulatory windows of opportunity. Launching new aircraft families (an architectural innovation), targeting the 50- and the 100–120-seat niche markets gave first Bombardier’s CRJ family and later Embraer’s E-Jet family the leadership. The fate of failed challengers and incumbents point to the importance of incumbent traps, technological and financial capabilities, the timing of windows of opportunity, speedy strategic response, a proper evaluation of future demand and sheer luck, as long lead times and sunk costs entrap incumbents and other inadequately responding companies.

Suggested Citation

  • Vértesy, Dániel, 2017. "Preconditions, windows of opportunity and innovation strategies: Successive leadership changes in the regional jet industry," Research Policy, Elsevier, vol. 46(2), pages 388-403.
    • Handle: RePEc:eee:respol:v:46:y:2017:i:2:p:388-403
    DOI: 10.1016/j.respol.2016.09.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0048733316301457
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.respol.2016.09.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Malerba, Franco, 2002. "Sectoral systems of innovation and production," Research Policy, Elsevier, vol. 31(2), pages 247-264, February.
    2. Lee, Keun & Lim, Chaisung, 2001. "Technological regimes, catching-up and leapfrogging: findings from the Korean industries," Research Policy, Elsevier, vol. 30(3), pages 459-483, March.
    3. Kim, Linsu, 1980. "Stages of development of industrial technology in a developing country: A model," Research Policy, Elsevier, vol. 9(3), pages 254-277, July.
    4. Frenken, Koen & Saviotti, Paolo P. & Trommetter, Michel, 1999. "Variety and niche creation in aircraft, helicopters, motorcycles and microcomputers," Research Policy, Elsevier, vol. 28(5), pages 469-488, June.
    5. Seishi Kimura, 2007. "The Challenges of Late Industrialization," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-62763-5.
    6. Franco Malerba & Sunil Mani (ed.), 2009. "Sectoral Systems of Innovation and Production in Developing Countries," Books, Edward Elgar Publishing, number 13634.
    7. Bonaccorsi, Andrea & Giuri, Paola, 2000. "When shakeout doesn't occur: The evolution of the turboprop engine industry," Research Policy, Elsevier, vol. 29(7-8), pages 847-870, August.
    8. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    9. Lall, Sanjaya, 1992. "Technological capabilities and industrialization," World Development, Elsevier, vol. 20(2), pages 165-186, February.
    10. Anonymous, 2013. "Introduction to the Issue," Journal of Wine Economics, Cambridge University Press, vol. 8(2), pages 129-130, November.
    11. Pang, Eng Fong. & Hill H., 1988. "State and industrial restructuring: a comparison of the aerospace industry in Indonesia and Singapore," ILO Working Papers 992590363402676, International Labour Organization.
    12. Sunil Mani, 2006. "The Sectoral system of innovation of Indian pharmaceutical industry," Centre for Development Studies, Trivendrum Working Papers 382, Centre for Development Studies, Trivendrum, India.
    13. repec:ilo:ilowps:259036 is not listed on IDEAS
    14. Richard Nelson, 1995. "Co-evolution of Industry Structure, Technology and Supporting Institutions, and the Making of Comparative Advantage," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 2(2), pages 171-184.
    15. Jan Ulijn & Hans Heerkens, 1999. "Fokker, A Clash Of Culture," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 269-298.
    16. Lee, Keun & Malerba, Franco, 2017. "Catch-up cycles and changes in industrial leadership:Windows of opportunity and responses of firms and countries in the evolution of sectoral systems," Research Policy, Elsevier, vol. 46(2), pages 338-351.
    17. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-583, June.
    18. Amann, Edmund & Cantwell, John (ed.), 2012. "Innovative Firms in Emerging Market Countries," OUP Catalogue, Oxford University Press, number 9780199646005.
    19. Andrea Goldstein, 2002. "The political economy of high-tech industries in developing countries: aerospace in Brazil, Indonesia and South Africa," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 26(4), pages 521-538, July.
    20. Andrea Goldstein, 2006. "The Political Economy of Industrial Policy in China: The Case of Aircraft Manufacturing," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 4(3), pages 259-273.
    21. Jorge Niosi & Majlinda Zhegu, 2005. "Aerospace Clusters: Local or Global Knowledge Spillovers?," Industry and Innovation, Taylor & Francis Journals, vol. 12(1), pages 5-29.
    22. Dosi,Giovanni & Galambos,Louis & Gambardella,Alfonso & Orsanigo,Luigi (ed.), 2013. "The Third Industrial Revolution in Global Business," Cambridge Books, Cambridge University Press, number 9781107028616, November.
    23. Rosane Argou Marques & L. Guilherme de Oliveira, 2009. "Sectoral system of innovation in Brazil: reflections about the accumulation of technological capabilities in the aeronautic sector (1990-2002)," Chapters, in: Franco Malerba & Sunil Mani (ed.), Sectoral Systems of Innovation and Production in Developing Countries, chapter 6, Edward Elgar Publishing.
    24. Murmann, Johann Peter & Frenken, Koen, 2006. "Toward a systematic framework for research on dominant designs, technological innovations, and industrial change," Research Policy, Elsevier, vol. 35(7), pages 925-952, September.
    25. Tom Broekel & Ron Boschma, 2012. "Knowledge networks in the Dutch aviation industry: the proximity paradox," Journal of Economic Geography, Oxford University Press, vol. 12(2), pages 409-433, March.
    26. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    27. Nina Pavcnik, 2002. "Trade Disputes in the Commercial Aircraft Industry," The World Economy, Wiley Blackwell, vol. 25(5), pages 733-751, May.
    28. Anonymous, 2013. "Introduction to the Issue," Journal of Wine Economics, Cambridge University Press, vol. 8(3), pages 243-243, December.
    29. Daaniel Vertesy & Adam Szirmai, 2010. "Interrupted Innovation: Innovation System Dynamics in Latecomer Aerospace Industries," Globelics Working Paper Series 2010-02, Globelics - Global Network for Economics of Learning, Innovation, and Competence Building Systems, Aalborg University, Department of Business and Management.
    30. Emilio Esposito & Lelio Raffa, 2007. "Global reorganisation in a high-technology industry: the aircraft industry," International Journal of Globalisation and Small Business, Inderscience Enterprises Ltd, vol. 2(2), pages 166-184.
    31. Mu, Qing & Lee, Keun, 2005. "Knowledge diffusion, market segmentation and technological catch-up: The case of the telecommunication industry in China," Research Policy, Elsevier, vol. 34(6), pages 759-783, August.
    32. Frenken, Koen & Leydesdorff, Loet, 2000. "Scaling trajectories in civil aircraft (1913-1997)," Research Policy, Elsevier, vol. 29(3), pages 331-348, March.
    33. François Texier, 2000. "Industrial Diversification and Innovation," Books, Edward Elgar Publishing, number 2153.
    34. Golich, Vicki L., 1992. "From competition to collaboration: the challenge of commercial-class aircraft manufacturing," International Organization, Cambridge University Press, vol. 46(4), pages 899-934, October.
    35. Frenken, Koen, 2000. "A complexity approach to innovation networks. The case of the aircraft industry (1909-1997)," Research Policy, Elsevier, vol. 29(2), pages 257-272, February.
    36. Frischtak, Claudio R., 1994. "Learning and technical progress in the commuter aircraft industry: an analysis of Embraer's experience," Research Policy, Elsevier, vol. 23(5), pages 601-612, September.
    37. Mowery,David C. & Nelson,Richard R. (ed.), 1999. "Sources of Industrial Leadership," Cambridge Books, Cambridge University Press, number 9780521645201, November.
    38. Goldstein, Andrea, 2002. "EMBRAER: from national champion to global player," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    39. Abernathy, William J. & Clark, Kim B., 1985. "Innovation: Mapping the winds of creative destruction," Research Policy, Elsevier, vol. 14(1), pages 3-22, February.
    40. Baskaran, Angathevar, 2005. "From science to commerce: the evolution of space development policy and technology accumulation in India," Technology in Society, Elsevier, vol. 27(2), pages 155-179.
    41. Andrea E. Goldstein & Steven M. McGuire, 2004. "The Political Economy of Strategic Trade Policy and the Brazil–Canada Export Subsidies Saga," The World Economy, Wiley Blackwell, vol. 27(4), pages 541-566, April.
    42. Michael Hobday & Andrew Davies & Andrea Prencipe, 2005. "Systems integration: a core capability of the modern corporation," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 14(6), pages 1109-1143, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vertesy, D., 2014. "Successive leadership changes in the regional jet industry," MERIT Working Papers 2014-046, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Vertesy, Daniel & Szirmai, Adam, 2010. "Interrupted innovation: Innovation system dynamics in latecomer aerospace industries," MERIT Working Papers 2010-059, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    4. Lee, Joosung J. & Yoon, Hyungseok, 2015. "A comparative study of technological learning and organizational capability development in complex products systems: Distinctive paths of three latecomers in military aircraft industry," Research Policy, Elsevier, vol. 44(7), pages 1296-1313.
    5. Figueiredo, Paulo N. & Cohen, Marcela, 2019. "Explaining early entry into path-creation technological catch-up in the forestry and pulp industry: Evidence from Brazil," Research Policy, Elsevier, vol. 48(7), pages 1694-1713.
    6. Lee, Keun & Malerba, Franco, 2017. "Catch-up cycles and changes in industrial leadership:Windows of opportunity and responses of firms and countries in the evolution of sectoral systems," Research Policy, Elsevier, vol. 46(2), pages 338-351.
    7. Franco Malerba & Richard R. Nelson, 2012. "Introduction," Chapters, in: Franco Malerba & Richard R. Nelson (ed.), Economic Development as a Learning Process, chapter 1, Edward Elgar Publishing.
    8. Malhotra, Abhishek & Zhang, Huiting & Beuse, Martin & Schmidt, Tobias, 2021. "How do new use environments influence a technology's knowledge trajectory? A patent citation network analysis of lithium-ion battery technology," Research Policy, Elsevier, vol. 50(9).
    9. Giovanni Dosi & Xiaodan Yu, 2018. "Capabilities Accumulation and Development: What History Tells the Theory," LEM Papers Series 2018/27, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    10. Lei Guo & Marina Yue Zhang & Mark Dodgson & David Gann & Hong Cai, 2019. "Seizing windows of opportunity by using technology-building and market-seeking strategies in tandem: Huawei’s sustained catch-up in the global market," Asia Pacific Journal of Management, Springer, vol. 36(3), pages 849-879, September.
    11. Murmann, Johann Peter & Frenken, Koen, 2006. "Toward a systematic framework for research on dominant designs, technological innovations, and industrial change," Research Policy, Elsevier, vol. 35(7), pages 925-952, September.
    12. Guo, Yanting & Zheng, Gang, 2019. "How do firms upgrade capabilities for systemic catch-up in the open innovation context? A multiple-case study of three leading home appliance companies in China," Technological Forecasting and Social Change, Elsevier, vol. 144(C), pages 36-48.
    13. Li, Daitian & Capone, Gianluca & Malerba, Franco, 2019. "The long march to catch-up: A history-friendly model of China’s mobile communications industry," Research Policy, Elsevier, vol. 48(3), pages 649-664.
    14. Narayanan, V.K. & Chen, Tianxu, 2012. "Research on technology standards: Accomplishment and challenges," Research Policy, Elsevier, vol. 41(8), pages 1375-1406.
    15. Figueiredo, Paulo N., 2016. "Evolution of the short-fiber technological trajectory in Brazil's pulp and paper industry: The role of firm-level innovative capability-building and indigenous institutions," Forest Policy and Economics, Elsevier, vol. 64(C), pages 1-14.
    16. Yu, Jiang & Liu, Rui & Chen, Feng, 2020. "Linking institutional environment with technological change: The rise of China's flat panel display industry," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    17. Ahmadvand, Emad & Salami, Seyed Reza & Soofi, Jahanyar Bamdad & Tabatabaeian, Seyed Habibollah, 2018. "Catch-up process in nanotechnology start-ups: The case of an Iranian electrospinning firm," Technology in Society, Elsevier, vol. 55(C), pages 1-8.
    18. van Rijnsoever, Frank J. & van den Berg, Jesse & Koch, Joost & Hekkert, Marko P., 2015. "Smart innovation policy: How network position and project composition affect the diversity of an emerging technology," Research Policy, Elsevier, vol. 44(5), pages 1094-1107.
    19. Yuzhe Miao & Jaeyong Song & Keun Lee & Chuyue Jin, 2018. "Technological catch-up by east Asian firms: Trends, issues, and future research agenda," Asia Pacific Journal of Management, Springer, vol. 35(3), pages 639-669, September.
    20. Lim, Chaisung & Kim, Y & Lee, Keun, 2015. "Changes in Industrial Leadership and Catch-Up by Latecomers in Shipbuilding Industry," MPRA Paper 109957, University Library of Munich, Germany.

    More about this item

    Keywords

    Industrial dynamics; Leadership change; Sectoral innovation systems; Aircraft industry; Regional jets; Windows of opportunity; Technological capability accumulation; Incumbent trap; Indicators;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:46:y:2017:i:2:p:388-403. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/respol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.