Exploring technological innovation trajectories through latecomers: evidence from Taiwan's bicycle industry

Abstract

By examining the technological innovation trajectories of Taiwan's bicycle industry over the last 30 years, this paper identifies three specific periods that constitute industry cycles with peaks occurring in 1980, 1990 and 2002. In each period, innovation capabilities within the six bicycle subsystems shifted, accompanied by variations in the needs of international markets and in export performance. The empirical results demonstrate that innovation activity in the production of key components by technological latecomers increases only when that of the market leaders is in decline. It is also demonstrated that through incremental technological innovations, taking advantage of modularity and appropriate strategic organisational innovations, such latecomers can become and remain competitive in the international market. By providing an understanding of the sequences that make up modularised technological trajectories and of the cycles experienced by the global bicycle market, this study is able to elicit some practical insights into the policy and managerial implications for latecomers involved in technological innovation.