How do firms respond to innovation shocks in the incubation phase of an industry?

Lyda Bigelow and Alice Min

Chapter 13 in Strategy in a Turbulent Era, 2024, pp 270-288 from Edward Elgar Publishing

Abstract: Recent research has led to renewed attention as to how firms respond to innovation shocks using the theory of comparative adjustment, transaction, and opportunity costs. This work hypothesizes when and to where firms in a growing market chose to reposition in response to an innovation shock. However, this new approach has not considered how firms might reposition in response to a shock in the incubation or pre-commercialization period of an industry. Using insights from a new set of research studies on this very early period of industry evolution, we develop propositions about firm response in this highly uncertain phase, with an appreciation for the enduring impact such decisions have on future positioning in the industry. We develop our ideas in the context of the innovation shock of the blue LED technology in the solid-state lighting industry.

Keywords: Business and Management; Economics and Finance (search for similar items in EconPapers)
Date: 2024
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