The Response of Old Technology Incumbents to Technological Competition Does the Sailing Ship Effect Exist?
Aarhus School of Business, Department of Organization and Management Working Paper No. 1
44 Pages Posted: 6 Nov 2007
Date Written: 2000
This article investigates whether firms react to a radical technological substitution threat by a deliberate acceleration of innovation in their existing technology - the 'sailing ship effect'. There have been repeated claims that the effect has been significant as a source of innovation (Rosenberg 1976, Rothwell and Zegveld 1985, Foster 1988, Utterback 1996). Detailed reexamination of two cases thought to be exemplars of the effect, sail versus steam in ships and the Solvay versus Leblanc methods for alkali manufacture, reveals that it existed in neither. It is suggested that the characteristics of historical, technological substitution processes prompt misinterpretation based on superficial knowledge. Brief review of three other cases further supports this position. It is argued that if the phenomenon occurs, it is likely to be rare.
Keywords: Solvay, Leblanc, sailing ship effect, creative destruction, technological substitution
JEL Classification: O31, O32, O33, O34
Suggested Citation: Suggested Citation