IDEAS home Printed from https://ideas.repec.org/a/eee/techno/v50-51y2016ip79-88.html
   My bibliography  Save this article

Innovation and de facto standardization: The influence of dominant design on innovative performance, radical innovation, and process innovation

Author

Listed:
  • Brem, Alexander
  • Nylund, Petra A.
  • Schuster, Gerd

Abstract

Setting technology standards is the route to market growth and to potentially influencing the performance of a whole industry. When a market accepts a particular technology as one that defines the specifications for products in the entire industry, a dominant design is set. In this article, we investigate how the existence of a dominant design affects subsequent innovation in an industry. In particular, we study the influence on innovative performance, radical innovation, and process innovation. Analyzing longitudinal, cross-sectional patent data for more than 2.6 million patents filed from 1978 to 2013, we find support for our hypotheses that an industry's innovative performance and degree of radical innovation are negatively influenced by dominant design in that industry, and that process innovation is fostered by the occurrence of a dominant design. We discuss the findings in the light of the increasing speed of technological development and standardization. Additionally, results from a sensitivity analysis for different threshold values of dominant design call for adjusting a binary definition of dominant design with different threshold values depending on the effects under study.

Suggested Citation

  • Brem, Alexander & Nylund, Petra A. & Schuster, Gerd, 2016. "Innovation and de facto standardization: The influence of dominant design on innovative performance, radical innovation, and process innovation," Technovation, Elsevier, vol. 50, pages 79-88.
  • Handle: RePEc:eee:techno:v:50-51:y:2016:i::p:79-88
    DOI: 10.1016/j.technovation.2015.11.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0166497215000760
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.technovation.2015.11.002?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. Christian Horn & Alexander Brem, 2013. "Strategic directions on innovation management – a conceptual framework," Management Research Review, Emerald Group Publishing Limited, vol. 36(10), pages 939-954, September.
    2. Iain M. Cockburn & Megan J. MacGarvie & Elisabeth Müller, 2010. "Patent thickets, licensing and innovative performance," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(3), pages 899-925, June.
    3. Joseph Farrell & Garth Saloner, 1985. "Standardization, Compatibility, and Innovation," RAND Journal of Economics, The RAND Corporation, vol. 16(1), pages 70-83, Spring.
    4. Manuel Trajtenberg, 1990. "A Penny for Your Quotes: Patent Citations and the Value of Innovations," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 172-187, Spring.
    5. Bruno van Pottelsberghe de la Potterie & Didier François, 2009. "The Cost Factor in Patent Systems," Journal of Industry, Competition and Trade, Springer, vol. 9(4), pages 329-355, December.
    6. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 577-598.
    7. 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.
    8. repec:fth:harver:1473 is not listed on IDEAS
    9. Narayanan, V.K. & Chen, Tianxu, 2012. "Research on technology standards: Accomplishment and challenges," Research Policy, Elsevier, vol. 41(8), pages 1375-1406.
    10. Hagedoorn, John & Cloodt, Myriam, 2003. "Measuring innovative performance: is there an advantage in using multiple indicators?," Research Policy, Elsevier, vol. 32(8), pages 1365-1379, September.
    11. Utterback, James M & Abernathy, William J, 1975. "A dynamic model of process and product innovation," Omega, Elsevier, vol. 3(6), pages 639-656, December.
    12. Dachs, Bernhard & Peters, Bettina, 2014. "Innovation, employment growth, and foreign ownership of firms," Research Policy, Elsevier, vol. 43(1), pages 214-232.
    13. Cohen, Wesley M & Klepper, Steven, 1996. "Firm Size and the Nature of Innovation within Industries: The Case of Process and Product R&D," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 232-243, May.
    14. Tassey, Gregory, 2000. "Standardization in technology-based markets," Research Policy, Elsevier, vol. 29(4-5), pages 587-602, April.
    15. Singh, Jasjit, 2008. "Distributed R&D, cross-regional knowledge integration and quality of innovative output," Research Policy, Elsevier, vol. 37(1), pages 77-96, February.
    16. 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.
    17. Gautam Ahuja & Riitta Katila, 2001. "Technological acquisitions and the innovation performance of acquiring firms: a longitudinal study," Strategic Management Journal, Wiley Blackwell, vol. 22(3), pages 197-220, March.
    18. Ariel Pakes & Zvi Griliches, 1980. "Patents and R and D at the Firm Level: A First Look," NBER Working Papers 0561, National Bureau of Economic Research, Inc.
    19. Clayton M. Christensen & Fernando F. Suárez & James M. Utterback, 1998. "Strategies for Survival in Fast-Changing Industries," Management Science, INFORMS, vol. 44(12-Part-2), pages 207-220, December.
    20. Katz, Michael L & Shapiro, Carl, 1992. "Product Introduction with Network Externalities," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 55-83, March.
    21. Cloodt, Myriam & Hagedoorn, John & Van Kranenburg, Hans, 2006. "Mergers and acquisitions: Their effect on the innovative performance of companies in high-tech industries," Research Policy, Elsevier, vol. 35(5), pages 642-654, June.
    22. Toby E. Stuart, 2000. "Interorganizational alliances and the performance of firms: a study of growth and innovation rates in a high‐technology industry," Strategic Management Journal, Wiley Blackwell, vol. 21(8), pages 791-811, August.
    23. Pakes, Ariel & Griliches, Zvi, 1980. "Patents and R&D at the firm level: A first report," Economics Letters, Elsevier, vol. 5(4), pages 377-381.
    24. Riitta Katila, 2000. "Using patent data to measure innovation performance," International Journal of Business Performance Management, Inderscience Enterprises Ltd, vol. 2(1/2/3), pages 180-193.
    25. Olav Sorenson & Jan W. Rivkin & Lee Fleming, 2010. "Complexity, Networks and Knowledge Flows," Chapters, in: Ron Boschma & Ron Martin (ed.), The Handbook of Evolutionary Economic Geography, chapter 15, Edward Elgar Publishing.
    26. Pek‐Hooi Soh, 2010. "Network patterns and competitive advantage before the emergence of a dominant design," Strategic Management Journal, Wiley Blackwell, vol. 31(4), pages 438-461, April.
    27. Belderbos, René & Cassiman, Bruno & Faems, Dries & Leten, Bart & Van Looy, Bart, 2014. "Co-ownership of intellectual property: Exploring the value-appropriation and value-creation implications of co-patenting with different partners," Research Policy, Elsevier, vol. 43(5), pages 841-852.
    28. Lee Fleming, 2001. "Recombinant Uncertainty in Technological Search," Management Science, INFORMS, vol. 47(1), pages 117-132, January.
    29. Guellec, Dominique & Pottelsberghe de la Potterie, Bruno v., 2001. "The internationalisation of technology analysed with patent data," Research Policy, Elsevier, vol. 30(8), pages 1253-1266, October.
    30. Fernando F. Suárez & James M. Utterback, 1995. "Dominant designs and the survival of firms," Strategic Management Journal, Wiley Blackwell, vol. 16(6), pages 415-430.
    31. Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-841, August.
    32. Thomas Keil & Markku Maula & Henri Schildt & Shaker A. Zahra, 2008. "The effect of governance modes and relatedness of external business development activities on innovative performance," Strategic Management Journal, Wiley Blackwell, vol. 29(8), pages 895-907, August.
    33. Brouwer, Erik & Kleinknecht, Alfred, 1999. "Innovative output, and a firm's propensity to patent.: An exploration of CIS micro data," Research Policy, Elsevier, vol. 28(6), pages 615-624, August.
    34. 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.
    35. Hipp, Christiane & Grupp, Hariolf, 2005. "Innovation in the service sector: The demand for service-specific innovation measurement concepts and typologies," Research Policy, Elsevier, vol. 34(4), pages 517-535, May.
    36. Hall, Bronwyn H & Ziedonis, Rosemarie Ham, 2001. "The Patent Paradox Revisited: An Empirical Study of Patenting in the U.S. Semiconductor Industry, 1979-1995," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 101-128, Spring.
    37. Paul H. Jensen & Elizabeth Webster, 2009. "Knowledge management: does capture impede creation?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 18(4), pages 701-727, August.
    38. Joshua Lerner, 1994. "The Importance of Patent Scope: An Empirical Analysis," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 319-333, Summer.
    39. Frederic Scherer, 1984. "Using Linked Patent and R&D Data to Measure Interindustry Technology Flows," NBER Chapters, in: R&D, Patents, and Productivity, pages 417-464, National Bureau of Economic Research, Inc.
    40. Grimpe, Christoph & Hussinger, Katrin, 2014. "Pre-empted patents, infringed patents and firms’ participation in markets for technology," Research Policy, Elsevier, vol. 43(3), pages 543-554.
    41. Horstmann, Ignatius & MacDonald, Glenn M & Slivinski, Alan, 1985. "Patents as Information Transfer Mechanisms: To Patent or (Maybe) Not to Patent," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 837-858, October.
    42. Stanley M. Besen & Joseph Farrell, 1994. "Choosing How to Compete: Strategies and Tactics in Standardization," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 117-131, Spring.
    43. Brian S. Silverman, 1999. "Technological Resources and the Direction of Corporate Diversification: Toward an Integration of the Resource-Based View and Transaction Cost Economics," Management Science, INFORMS, vol. 45(8), pages 1109-1124, August.
    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. Brem, Alexander & Nylund, Petra & Viardot, Eric, 2020. "The impact of the 2008 financial crisis on innovation: A dominant design perspective," Journal of Business Research, Elsevier, vol. 110(C), pages 360-369.
    2. Narayanan, V.K. & Chen, Tianxu, 2012. "Research on technology standards: Accomplishment and challenges," Research Policy, Elsevier, vol. 41(8), pages 1375-1406.
    3. 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.
    4. Yang, Hongyan & Steensma, H. Kevin, 2014. "When do firms rely on their knowledge spillover recipients for guidance in exploring unfamiliar knowledge?," Research Policy, Elsevier, vol. 43(9), pages 1496-1507.
    5. Dziallas, Marisa & Blind, Knut, 2019. "Innovation indicators throughout the innovation process: An extensive literature analysis," Technovation, Elsevier, vol. 80, pages 3-29.
    6. Foucart, Renaud & Li, Qian Cher, 2021. "The role of technology standards in product innovation: Theory and evidence from UK manufacturing firms," Research Policy, Elsevier, vol. 50(2).
    7. Maria Chiara Di Guardo & Kathryn Rudie Harrigan & Elona Marku, 2019. "M&A and diversification strategies: what effect on quality of inventive activity?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(3), pages 669-692, September.
    8. Manuel Acosta & Daniel Coronado & Esther Ferrándiz & Manuel Jiménez, 2022. "Effects of knowledge spillovers between competitors on patent quality: what patent citations reveal about a global duopoly," The Journal of Technology Transfer, Springer, vol. 47(5), pages 1451-1487, October.
    9. Nicolas van Zeebroeck & Bruno van Pottelsberghe de la Potterie, 2011. "Filing strategies and patent value," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 20(6), pages 539-561, February.
    10. Feng Zhang & Guohua Jiang, 2019. "Combination of Complementary Technological Knowledge to Generate “Hard to Imitate” Technologies," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 18(02), pages 1-24, June.
    11. Wadhwa, Anu & Phelps, Corey & Kotha, Suresh, 2016. "Corporate venture capital portfolios and firm innovation," Journal of Business Venturing, Elsevier, vol. 31(1), pages 95-112.
    12. Ufuk Akcigit & William R. Kerr, 2018. "Growth through Heterogeneous Innovations," Journal of Political Economy, University of Chicago Press, vol. 126(4), pages 1374-1443.
    13. Li, Zhengyu, 2016. "Essays on knowledge sourcing and technological capability : A knowledge structure perspective," Other publications TiSEM b8ff31fc-c57b-4bc3-b5a4-0, Tilburg University, School of Economics and Management.
    14. Gino Cattani, 2005. "Preadaptation, Firm Heterogeneity, and Technological Performance: A Study on the Evolution of Fiber Optics, 1970–1995," Organization Science, INFORMS, vol. 16(6), pages 563-580, December.
    15. repec:zbw:bofrdp:2013_028 is not listed on IDEAS
    16. Ufuk Akcigit & William R. Kerr, 2018. "Growth through Heterogeneous Innovations," Journal of Political Economy, University of Chicago Press, vol. 126(4), pages 1374-1443.
    17. Armin Anzenbacher & Marcus Wagner, 2020. "The role of exploration and exploitation for innovation success: effects of business models on organizational ambidexterity in the semiconductor industry," International Entrepreneurship and Management Journal, Springer, vol. 16(2), pages 571-594, June.
    18. Appio, Francesco Paolo & Baglieri, Daniela & Cesaroni, Fabrizio & Spicuzza, Lucia & Donato, Alessia, 2022. "Patent design strategies: Empirical evidence from European patents," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    19. Suarez, Fernando F., 2004. "Battles for technological dominance: an integrative framework," Research Policy, Elsevier, vol. 33(2), pages 271-286, March.
    20. Peeters, T.J.G., 2013. "External knowledge search and use in new product development," Other publications TiSEM 300ebb34-b090-4210-b95e-f, Tilburg University, School of Economics and Management.
    21. Emma L. Hitchen & Petra A. Nylund & Eric Viardot, 2017. "The Effectiveness Of Open Innovation: Do Size And Performance Of Open Innovation Groups Matter?," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 21(03), pages 1-24, April.

    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:techno:v:50-51:y:2016:i::p:79-88. 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.sciencedirect.com/science/journal/01664972 .

    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.