Influence of risk on technology adoption: inertia strategy in the space industry

Victor Dos Santos Paulino

European Journal of Innovation Management, 2014, vol. 17, issue 1, 41-60

Abstract: Purpose - – The topic of the risk associated with innovation is being investigated through the influence of technological risk on technology adoption. Design/methodology/approach - – The paper analyses the dynamics of technology adoption in high technology products thanks to several regressions. The paper uses data gathered from a major European space integrator. Findings - – The paper shows that a firm may implement a reliability-based inertia strategy under a specific context. This type of inertia strategy is rational and leads a firm to limit the adoption of new technologies and favours the reuse of proven technologies. This strategy is relevant to facing a risk of decrease in technical reliability. Research limitations/implications - – While the space industry displays some similarities with other capital good industries, it remains specific compared to mass production industries. The current paper should be considered as a preliminary research that aims at structuring the notion of inertia strategy. Practical implications - – In order to increase the commercial demand, the paper proposes that satellite manufactures adopt more intensive reliability-based inertia strategy and institutional demand asks for less experimental satellites. Originality/value - – This paper contributes to show that delays in technology adoption should not systematically be regarded as a weakness. Implementing a strategy that aims at slowing down technology adoption may sometimes improve firm survival. The paper also intends to provide a new insight to the paradoxical nature of change.

Keywords: Reliability; Strategy; Risk; Inertia; Space industry; Technology adoption (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ejimpp:ejim-07-2012-0075

DOI: 10.1108/EJIM-07-2012-0075

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