Technological discontinuities and the challenge for incumbent firms: Destruction, disruption or creative accumulation?
•The concept of creative accumulation (CA) captures main challenges for incumbents in discontinuous innovation processes.•CA complements theories of disruptive and competence-destroying innovation.•CA is used to analyse discontinuous innovation in two industries: cars and gas turbines.•CA can explai...
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| Published in: | Research policy 2013-07, Vol.42 (6-7), p.1210-1224 |
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| Main Authors: | , , , |
| Format: | Article |
| Language: | eng |
| Subjects: | |
| Online Access: | Get full text |
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| Summary: | •The concept of creative accumulation (CA) captures main challenges for incumbents in discontinuous innovation processes.•CA complements theories of disruptive and competence-destroying innovation.•CA is used to analyse discontinuous innovation in two industries: cars and gas turbines.•CA can explain why new entrants failed and why only some incumbents kept their market positions.•CA implies a triple challenge: develop old technology, source new technology and integrate old and new at a rapid pace.
The creative destruction of existing industries as a consequence of discontinuous technological change is a central theme in the literature on industrial innovation and technological development. Established competence-based and market-based explanations of this phenomenon argue that incumbents are seriously challenged only by ‘competence-destroying’ or ‘disruptive’ innovations, which make their existing knowledge base or business models obsolete and leave them vulnerable to attacks from new entrants. This paper challenges these arguments. With detailed empirical analyses of the automotive and gas turbine industries, we demonstrate that these explanations overestimate the ability of new entrants to destroy and disrupt established industries and underestimate the capacity of incumbents to perceive the potential of new technologies and integrate them with existing capabilities. Moreover, we show how intense competition in the wake of technological discontinuities, driven entirely by incumbents, may instead result in late industry shakeouts. We develop and extend the notion of ‘creative accumulation’ as a way of conceptualizing the innovating capacity of the incumbents that appear to master such turbulence. Specifically, we argue that creative accumulation requires firms to handle a triple challenge of simultaneously (a) fine-tuning and evolving existing technologies at a rapid pace, (b) acquiring and developing new technologies and resources and (c) integrating novel and existing knowledge into superior products and solutions. |
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| ISSN: | 0048-7333 1873-7625 1873-7625 |