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From creative destruction to creative appropriation: A comprehensive framework

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  • Xing, Jack Linzhou
  • Sharif, Naubahar

Abstract

This paper introduces a conceptual modification of Schumpeter's concept of creative destruction. Identifying a Kuhnian anomaly in a case of creative destruction in the ‘new economy’, we analyze a case study of the Chinese e-hailing firm DiDi Chuxing to show that this firm used a strategy we term ‘creative appropriation’, whereby a new firm utilizes incumbent firms’ complementary assets but without cooperating with the incumbent, to disrupt a market. This exploitation of complementary assets is based on recombining prevailing technological infrastructure(s) as well as flexible business models that facilitate open innovation. Employing documentary analysis, participant-observation, face-to-face interviews with informants, and a quantitative survey, the study finds that DiDi deployed its e-hailing app to disrupt the taxi market in Xi'an, China (as it did elsewhere in China) as a means of creative destruction, appropriating human-resource-based complementary assets (social and personal reputations, tacit knowledge, and connections) of taxi companies in Xi'an, first to dominate e-hailing in the taxi industry and then to destroy that industry by shifting its focus to private cars.

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  • Xing, Jack Linzhou & Sharif, Naubahar, 2020. "From creative destruction to creative appropriation: A comprehensive framework," Research Policy, Elsevier, vol. 49(7).
    • Handle: RePEc:eee:respol:v:49:y:2020:i:7:s0048733320301384
    DOI: 10.1016/j.respol.2020.104060
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    Cited by:

    1. Chen, Long & Huang, Jiahui & Jing, Peng & Wang, Bichen & Yu, Xiaozhou & Zha, Ye & Jiang, Chengxi, 2023. "Changing or unchanging Chinese attitudes toward ride-hailing? A social media analytics perspective from 2018 to 2021," Transportation Research Part A: Policy and Practice, Elsevier, vol. 178(C).
    2. Thanos Fragkandreas, 2021. "Innovation Systems and Income Inequality: In Search of Causal Mechanisms," Working Papers 56, Birkbeck Centre for Innovation Management Research, revised Nov 2021.
    3. Ogink, Ruben H.A.J. & Goossen, Martin C. & Romme, A. Georges L. & Akkermans, Henk, 2023. "Mechanisms in open innovation: A review and synthesis of the literature," Technovation, Elsevier, vol. 119(C).
    4. Honorine Harlé & Pascal Le Masson & Benoit Weil, 2021. "A model of creative heritage for industry: designing new rules while preserving the present system of rules [Un modèle de patrimoine de création pour l'industrie: concevoir de nouvelles règles dans," Post-Print hal-03406761, HAL.

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