Dynamic Commercialization Strategies for Disruptive Technologies: Evidence from the Speech Recognition Industry
37 Pages Posted: 20 Dec 2013 Last revised: 13 Mar 2015
Date Written: December 2013
When startup innovation involves a potentially disruptive technology - initially lagging in the predominant performance metric, but with a potentially favorable trajectory of improvement - incumbents may be wary of engaging in cooperative commercialization with the startup. While the prevailing theory of disruptive innovation suggests that this will lead to (exclusively) competitive commercialization and the eventual replacement of incumbents, we consider a dynamic strategy involving product market entry before switching to a cooperative commercialization strategy. Empirical evidence from the automated speech recognition industry from 1952-2010 confirms the main prediction of the model.
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