Velocity shifts in the creative economy: incumbent-entrant dynamics in the emergence of Japanese social games

Mirko Ernkvist ()
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Mirko Ernkvist: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden, http://ratio.se/medarbetare/mirko-ernkvist/

No 267, Ratio Working Papers from The Ratio Institute

Abstract: The Japanese innovation system has been characterized as more prone to disruptive innovation by incumbent firms rather than de novo entrepreneurial entrants (H. W. Chesbrough, 1999). We draw upon the notion that creative industry competition in a high velocity environment is fundamentally different from an environment of more moderate velocity, exploring the notion that velocity shifts following disruptive innovation could be a key underlying mechanism for transformation by entrants in institutional settings that favor incumbents. A higher velocity environment provides a cognitive barrier to incumbent firms’ R&D by making established design heuristics obsolete, introducing novel market analytic methods and shifting established industry logics towards speed, constant iteration and services. The velocity shift in the transition from video games to social games required new specialized assets and new ways of accessing customer preferences though real-time data mining techniques that also challenged engrained cognitive frames of how game design should be pursued. Unlike previous disruptive innovation in the game industry, social games enabled new entrants to rapidly become market leaders. The case points towards a more nuanced view of the influence of disruptive innovation during velocity shifts in creative industries. For studies of technological entrepreneurship, this implies that the velocity shifts following disruptive innovation could provide a previously overlooked important mechanism in understanding how entrants have been able to challenge incumbent firms in Japan.

Keywords: disruptive innovation; social games; velocity shifts; industry emergence (search for similar items in EconPapers)
JEL-codes: L26 L82 M12 N85 O32 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2015-12-31
New Economics Papers: this item is included in nep-ent, nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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