IDEAS home Printed from https://ideas.repec.org/a/eee/respol/v49y2020i1s0048733319301933.html
   My bibliography  Save this article

Progress and setbacks: The two faces of technology emergence

Author

Listed:
  • Kapoor, Rahul
  • Klueter, Thomas

Abstract

Emerging technologies are an important driver of economic growth. However, the process of their emergence may not only be characterized by technological progress but also by setbacks. We offer a perspective on technology emergence that explicitly incorporates setbacks into the technology's evolution and explains how industry participants may react to setbacks in emerging technologies. We consider that the locus of innovation in an emerging technology encompasses different types of organizations (industry incumbents, entrants and public research organizations (PROs)) who operate in different institutional environments, and explore how these organizations react to setbacks in terms of their R&D efforts. We study two emerging biotechnologies in the global pharmaceutical industry - gene therapy (GT) and monoclonal antibodies (mAbs). The emergence of both technologies during the 1990s was punctuated by periods of setbacks. We observe a gradual increase in industry participants' R&D efforts during periods of progress and a significant decline in those efforts immediately following setbacks. The decline in R&D efforts was more pronounced for firms than for PROs as well as for those firms that were listed on the stock market in contrast to those that were privately financed. Finally, the decline in R&D efforts towards GT was much more pronounced for those organizations located in countries with high capital fluidity. These findings reinforce that organizational and institutional characteristics that are typically attributed to facilitate R&D efforts towards emerging technologies do induce greater levels of those efforts during periods of progress. However, the same characteristics are also associated with a significant decline in R&D efforts immediately following periods of setbacks. Overall, the study illustrates how setbacks reconfigure the locus of innovation in emerging technologies and offers a richer perspective on technology emergence as one that is rooted in both progress and setbacks. In so doing, it highlights the challenges of sustaining technological progress and offers guidance for policy.

Suggested Citation

  • Kapoor, Rahul & Klueter, Thomas, 2020. "Progress and setbacks: The two faces of technology emergence," Research Policy, Elsevier, vol. 49(1).
    • Handle: RePEc:eee:respol:v:49:y:2020:i:1:s0048733319301933
    DOI: 10.1016/j.respol.2019.103874
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0048733319301933
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.respol.2019.103874?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. Gustavo Manso, 2011. "Motivating Innovation," Journal of Finance, American Finance Association, vol. 66(5), pages 1823-1860, October.
    2. David Williams & Christopher Baum, 2004. "Gene therapy needs both trials and new strategies," Nature, Nature, vol. 429(6988), pages 129-129, May.
    3. Cameron,A. Colin & Trivedi,Pravin K., 2013. "Regression Analysis of Count Data," Cambridge Books, Cambridge University Press, number 9781107667273.
    4. Susan Bartholomew, 1997. "National Systems of Biotechnology Innovation: Complex Interdependence in the Global System," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 28(2), pages 241-266, June.
    5. Salter, Ammon J. & Martin, Ben R., 2001. "The economic benefits of publicly funded basic research: a critical review," Research Policy, Elsevier, vol. 30(3), pages 509-532, March.
    6. Bakker, Sjoerd, 2010. "The car industry and the blow-out of the hydrogen hype," Energy Policy, Elsevier, vol. 38(11), pages 6540-6544, November.
    7. Kaplan, Sarah & Tripsas, Mary, 2008. "Thinking about technology: Applying a cognitive lens to technical change," Research Policy, Elsevier, vol. 37(5), pages 790-805, June.
    8. repec:fth:harver:1473 is not listed on IDEAS
    9. Ron Adner & Rahul Kapoor, 2016. "Innovation ecosystems and the pace of substitution: Re-examining technology S-curves," Strategic Management Journal, Wiley Blackwell, vol. 37(4), pages 625-648, April.
    10. Paul Gompers & Josh Lerner, 2003. "Short-Term America Revisited? Boom and Bust in the Venture Capital Industry and the Impact on Innovation," NBER Chapters, in: Innovation Policy and the Economy, Volume 3, pages 1-28, National Bureau of Economic Research, Inc.
    11. Anonymous, 1964. "Economic and Social Council," International Organization, Cambridge University Press, vol. 18(3), pages 592-598, July.
    12. Kapoor, Rahul & McGrath, Patia J., 2014. "Unmasking the interplay between technology evolution and R&D collaboration: Evidence from the global semiconductor manufacturing industry, 1990–2010," Research Policy, Elsevier, vol. 43(3), pages 555-569.
    13. Jerker Denrell & James G. March, 2001. "Adaptation as Information Restriction: The Hot Stove Effect," Organization Science, INFORMS, vol. 12(5), pages 523-538, October.
    14. Lim, Kwanghui, 2004. "The relationship between research and innovation in the semiconductor and pharmaceutical industries (1981-1997)," Research Policy, Elsevier, vol. 33(2), pages 287-321, March.
    15. Freeman, Chris, 1995. "The 'National System of Innovation' in Historical Perspective," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 19(1), pages 5-24, February.
    16. repec:bla:jindec:v:46:y:1998:i:2:p:157-82 is not listed on IDEAS
    17. Godoe, Helge, 2000. "Innovation regimes, R&D and radical innovations in telecommunications," Research Policy, Elsevier, vol. 29(9), pages 1033-1046, December.
    18. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2003. "Links and Impacts: The Influence of Public Research on Industrial R&D," Chapters, in: Aldo Geuna & Ammon J. Salter & W. Edward Steinmueller (ed.), Science and Innovation, chapter 4, Edward Elgar Publishing.
    19. Jean-Luc Arrègle & Toyah Miller & Michael Hitt & Paul Beamish, 2013. "Do regions matter? An integrated institutional and semiglobalisation perspective on the internationalization of MNEs," Post-Print hal-02313035, HAL.
    20. James R. Brown & Steven M. Fazzari & Bruce C. Petersen, 2009. "Financing Innovation and Growth: Cash Flow, External Equity, and the 1990s R&D Boom," Journal of Finance, American Finance Association, vol. 64(1), pages 151-185, February.
    21. Martin, Stephen & Scott, John T., 2000. "The nature of innovation market failure and the design of public support for private innovation," Research Policy, Elsevier, vol. 29(4-5), pages 437-447, April.
    22. Romain Rancière & Aaron Tornell & Frank Westermann, 2008. "Systemic Crises and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(1), pages 359-406.
    23. Sarah Kaplan & Fiona Murray & Rebecca Henderson, 2003. "Discontinuities and senior management: assessing the role of recognition in pharmaceutical firm response to biotechnology," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 12(2), pages 203-233, April.
    24. Levine, Ross, 1998. "The Legal Environment, Banks, and Long-Run Economic Growth," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(3), pages 596-613, August.
    25. Ashish Arora & Alfonso Gambardella & Laura Magazzini & Fabio Pammolli, 2009. "A Breath of Fresh Air? Firm Type, Scale, Scope, and Selection Effects in Drug Development," Management Science, INFORMS, vol. 55(10), pages 1638-1653, October.
    26. Ron Martin & Peter Sunley, 1998. "Slow Convergence? The New Endogenous Growth Theory and Regional Development," Economic Geography, Taylor & Francis Journals, vol. 74(3), pages 201-227, July.
    27. Geels, Frank W., 2002. "Technological transitions as evolutionary reconfiguration processes: a multi-level perspective and a case-study," Research Policy, Elsevier, vol. 31(8-9), pages 1257-1274, December.
    28. Rotolo, Daniele & Hicks, Diana & Martin, Ben R., 2015. "What is an emerging technology?," Research Policy, Elsevier, vol. 44(10), pages 1827-1843.
    29. Inder M. Verma & Nikunj Somia, 1997. "Gene therapy - promises, problems and prospects," Nature, Nature, vol. 389(6648), pages 239-242, September.
    30. Marie Thursby & Richard Jensen, 2001. "Proofs and Prototypes for Sale: The Licensing of University Inventions," American Economic Review, American Economic Association, vol. 91(1), pages 240-259, March.
    31. Frank T. Rothaermel, 2001. "Incumbent's advantage through exploiting complementary assets via interfirm cooperation," Strategic Management Journal, Wiley Blackwell, vol. 22(6‐7), pages 687-699, June.
    32. Paul Smaglik, 2000. "Congress gets tough with gene therapy," Nature, Nature, vol. 403(6770), pages 583-584, February.
    33. Kaiser, Robert & Prange, Heiko, 2004. "The reconfiguration of National Innovation Systems--the example of German biotechnology," Research Policy, Elsevier, vol. 33(3), pages 395-408, April.
    34. Christensen, Clayton M. & Rosenbloom, Richard S., 1995. "Explaining the attacker's advantage: Technological paradigms, organizational dynamics, and the value network," Research Policy, Elsevier, vol. 24(2), pages 233-257, March.
    35. Iain M. Cockburn & Rebecca M. Henderson, 1998. "Absorptive Capacity, Coauthoring Behavior, and the Organization of Research in Drug Discovery," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 157-182, June.
    36. Henderson, Rebecca, 1995. "Of life cycles real and imaginary: The unexpectedly long old age of optical lithography," Research Policy, Elsevier, vol. 24(4), pages 631-643, July.
    37. Arnoud W. A. Boot & Radhakrishnan Gopalan & Anjan V. Thakor, 2006. "The Entrepreneur's Choice between Private and Public Ownership," Journal of Finance, American Finance Association, vol. 61(2), pages 803-836, April.
    38. Anonymous, 1964. "Economic and Social Council," International Organization, Cambridge University Press, vol. 18(4), pages 814-827, October.
    39. Michael M. Hopkins & Philippa A. Crane & Paul Nightingale & Charles Baden-Fuller, 2013. "Buying big into biotech: scale, financing, and the industrial dynamics of UK biotech, 1980--2009," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(4), pages 903-952, August.
    40. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    41. Asli Demeirgüç-Kunt & Ross Levine (ed.), 0. "Finance and Growth," Books, Edward Elgar Publishing, number 17119.
    42. Anthony Goerzen & Paul W. Beamish, 2003. "Geographic scope and multinational enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 24(13), pages 1289-1306, December.
    43. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 287-343, National Bureau of Economic Research, Inc.
    44. Andújar, J.M. & Segura, F., 2009. "Fuel cells: History and updating. A walk along two centuries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(9), pages 2309-2322, December.
    45. Josh Lerner & Joacim Tåg, 2013. "Institutions and venture capital," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(1), pages 153-182, February.
    46. Geels, Frank W., 2004. "From sectoral systems of innovation to socio-technical systems: Insights about dynamics and change from sociology and institutional theory," Research Policy, Elsevier, vol. 33(6-7), pages 897-920, September.
    47. Beck, Thorsten & Levine, Ross & Loayza, Norman, 2000. "Finance and the sources of growth," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 261-300.
    48. Hannah Hoag, 2005. "Gene therapy rising?," Nature, Nature, vol. 435(7041), pages 530-531, May.
    49. Richard R. Nelson, 1959. "The Simple Economics of Basic Scientific Research," Journal of Political Economy, University of Chicago Press, vol. 67(3), pages 297-297.
    50. Sahal, Devendra, 1985. "Technological guideposts and innovation avenues," Research Policy, Elsevier, vol. 14(2), pages 61-82, April.
    51. Nelson, Richard R, 1986. "Institutions Supporting Technical Advance in Industry," American Economic Review, American Economic Association, vol. 76(2), pages 186-189, May.
    52. Dedehayir, Ozgur & Steinert, Martin, 2016. "The hype cycle model: A review and future directions," Technological Forecasting and Social Change, Elsevier, vol. 108(C), pages 28-41.
    53. Rosenberg, Nathan & Nelson, Richard R., 1994. "American universities and technical advance in industry," Research Policy, Elsevier, vol. 23(3), pages 323-348, May.
    54. Levinthal, Daniel A, 1998. "The Slow Pace of Rapid Technological Change: Gradualism and Punctuation in Technological Change," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 7(2), pages 217-247, June.
    55. Donna Marie DeCarolis & David L. Deeds, 1999. "The impact of stocks and flows of organizational knowledge on firm performance: an empirical investigation of the biotechnology industry," Strategic Management Journal, Wiley Blackwell, vol. 20(10), pages 953-968, October.
    56. Garud, Raghu & Gehman, Joel, 2012. "Metatheoretical perspectives on sustainability journeys: Evolutionary, relational and durational," Research Policy, Elsevier, vol. 41(6), pages 980-995.
    57. Daniel Ferreira & Gustavo Manso & André C. Silva, 2014. "Incentives to Innovate and the Decision to Go Public or Private," The Review of Financial Studies, Society for Financial Studies, vol. 27(1), pages 256-300, January.
    58. Mary J. Benner, 2010. "Securities Analysts and Incumbent Response to Radical Technological Change: Evidence from Digital Photography and Internet Telephony," Organization Science, INFORMS, vol. 21(1), pages 42-62, February.
    59. Klaus E. Meyer & Saul Estrin & Sumon Kumar Bhaumik & Mike W. Peng, 2009. "Institutions, resources, and entry strategies in emerging economies," Strategic Management Journal, Wiley Blackwell, vol. 30(1), pages 61-80, January.
    60. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, April.
    61. Jason Owen-Smith & Walter W. Powell, 2004. "Knowledge Networks as Channels and Conduits: The Effects of Spillovers in the Boston Biotechnology Community," Organization Science, INFORMS, vol. 15(1), pages 5-21, February.
    62. Anonymous, 1964. "Economic and Social Council," International Organization, Cambridge University Press, vol. 18(1), pages 132-167, January.
    63. Deeds, David L. & Decarolis, DONA & Coombs, Joseph, 2000. "Dynamic capabilities and new product development in high technology ventures: An empirical analysis of new biotechnology firms," Journal of Business Venturing, Elsevier, vol. 15(3), pages 211-229, May.
    64. Marina Cavazzana-Calvo & Adrian Thrasher & Fulvio Mavilio, 2004. "The future of gene therapy," Nature, Nature, vol. 427(6977), pages 779-781, February.
    65. Zucker, Lynne G & Darby, Michael R & Brewer, Marilynn B, 1998. "Intellectual Human Capital and the Birth of U.S. Biotechnology Enterprises," American Economic Review, American Economic Association, vol. 88(1), pages 290-306, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rahul Kapoor & David J. Teece, 2021. "Three Faces of Technology’s Value Creation: Emerging, Enabling, Embedding," Strategy Science, INFORMS, vol. 6(1), pages 1-4, March.
    2. Kanger, Laur & Bone, Frédérique & Rotolo, Daniele & Steinmueller, W. Edward & Schot, Johan, 2022. "Deep transitions: A mixed methods study of the historical evolution of mass production," Technological Forecasting and Social Change, Elsevier, vol. 177(C).
    3. Anindya Ghosh & Thomas Klueter, 2022. "The Role of Frictions due to Top Management in Alliance Termination Decisions: Insights from Established Bio‐Pharmaceutical Firms," Journal of Management Studies, Wiley Blackwell, vol. 59(5), pages 1315-1353, July.
    4. Rahul Kapoor & Daniel Wilde, 2023. "Peering into a crystal ball: Forecasting behavior and industry foresight," Strategic Management Journal, Wiley Blackwell, vol. 44(3), pages 704-736, March.
    5. Ghosh, Anindya & Klueter, Thomas, 2022. "The role of frictions due to top management in alliance termination decisions: Insights from established bio-pharmaceutical firms," Other publications TiSEM 9faa19d2-d1a8-4490-befb-d, Tilburg University, School of Economics and Management.

    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. Beck, Mathias & Junge, Martin & Kaiser, Ulrich, 2017. "Public Funding and Corporate Innovation," IZA Discussion Papers 11196, Institute of Labor Economics (IZA).
    2. Leten, Bart & Landoni, Paolo & Van Looy, Bart, 2014. "Science or graduates: How do firms benefit from the proximity of universities?," Research Policy, Elsevier, vol. 43(8), pages 1398-1412.
    3. Nicola Lacetera, 2003. "Incentives and spillovers in R&D activities: an agency-theoretic analysis of industry-university relations," Microeconomics 0312004, University Library of Munich, Germany.
    4. Foray, Dominique & Lissoni, Francesco, 2010. "University Research and Public–Private Interaction," 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 275-314, Elsevier.
    5. Rahul Kapoor & Thomas Klueter, 2021. "Unbundling and Managing Uncertainty Surrounding Emerging Technologies," Strategy Science, INFORMS, vol. 6(1), pages 62-74, March.
    6. Leten, Bart & Kelchtermans, Stijn & Belderbos, Ren, 2010. "Internal Basic Research, External Basic Research and the Technological Performance of Pharmaceutical Firms," Working Papers 2010/12, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    7. Simeth, Markus & Raffo, Julio D., 2013. "What makes companies pursue an Open Science strategy?," Research Policy, Elsevier, vol. 42(9), pages 1531-1543.
    8. Michaël Bikard & Keyvan Vakili & Florenta Teodoridis, 2019. "When Collaboration Bridges Institutions: The Impact of University–Industry Collaboration on Academic Productivity," Organization Science, INFORMS, vol. 30(2), pages 426-445, March.
    9. Gersbach, Hans & Sorger, Gerhard & Amon, Christian, 2018. "Hierarchical growth: Basic and applied research," Journal of Economic Dynamics and Control, Elsevier, vol. 90(C), pages 434-459.
    10. Choi, Jin-Uk & Lee, Chang-Yang, 2022. "The differential effects of basic research on firm R&D productivity: The conditioning role of technological diversification," Technovation, Elsevier, vol. 118(C).
    11. Bruce Rasmussen, 2010. "Innovation and Commercialisation in the Biopharmaceutical Industry," Books, Edward Elgar Publishing, number 13680.
    12. Subtil Lacerda, Juliana & van den Bergh, Jeroen C.J.M., 2020. "Effectiveness of an ‘open innovation’ approach in renewable energy: Empirical evidence from a survey on solar and wind power," Renewable and Sustainable Energy Reviews, Elsevier, vol. 118(C).
    13. 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.
    14. Larsen, Maria Theresa, 2011. "The implications of academic enterprise for public science: An overview of the empirical evidence," Research Policy, Elsevier, vol. 40(1), pages 6-19, February.
    15. Michaël Bikard, 2018. "Made in Academia: The Effect of Institutional Origin on Inventors’ Attention to Science," Organization Science, INFORMS, vol. 29(5), pages 818-836, October.
    16. repec:wip:wpaper:6 is not listed on IDEAS
    17. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," 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 129-213, Elsevier.
    18. Funk, Jeffery, 2009. "Components, systems and discontinuities: The case of magnetic recording and playback equipment," Research Policy, Elsevier, vol. 38(7), pages 1192-1202, September.
    19. 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.
    20. Pinar Ozcan & Douglas Hannah, 2020. "Social Origins of Great Strategies Advertising Suppliers to Realize Disruptive Social Media Technology," Strategy Science, INFORMS, vol. 5(3), pages 193-217, September.
    21. Malo, Stéphane, 2009. "The contribution of (not so) public research to commercial innovations in the field of combinatorial chemistry," Research Policy, Elsevier, vol. 38(6), pages 957-970, July.

    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:49:y:2020:i:1:s0048733319301933. 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.