Abstract
Switching to a new technological path is often a serious economic challenge for companies. Incumbents, in particular, are often led by their organizational routines, traditional technological orientation, and experience, and run the risk of losing contact with new technologies, which can decrease their competitiveness. We analyze whether opening up the innovation process to external knowledge partners can help to overcome such path dependence and enable firms to operate successfully on a new technological path. We develop a theoretical concept that shows the potential of external knowledge sources for operating successfully on a new technological path and test it empirically using the example of green technologies. Green technologies are not only relevant for addressing the current environmental problems, but they are also an example of a new technological path that is proving difficult for companies to switch to. Overall, we find strong direct effects of external (green) knowledge on green innovation success. The results even indicate that the direct effect of external knowledge tends to be larger for green than for non-green innovation.
Highlights
Firms are bounded in their perception of commercial opportunities [1,2]
We see a direct effect of search breadth and depth and green innovation performance and the inverted U-shaped relationship indicated by the interaction terms of breadth
We argue that access to external knowledge sources can help to overcome path dependence as it reduces both the costs of building new knowledge and increases the usefulness of traditional knowledge in the new technological path
Summary
Firms are bounded in their perception of commercial opportunities [1,2] They are guided by their organizational routines and their traditional technological orientation and experiences, which limits their ability to adapt to changing market circumstances [3,4]. In the literature, this phenomenon is referred to as technological path dependence [5]. The pharmaceutical industry missed the early days of biotechnology [7]: it was the start-up company Genentech, rather than the traditional pharmaceutical companies, that first invented biotech drugs [8], and the European car industry has great difficulties adapting to the possibilities provided by alternative propulsion technologies (electric propulsion, hydrogen fuel cell technologies) [9]. While technological path dependence and the difficulty of breaking out of it are hardly disputed facts in the empirical literature [5,10], it is widely acknowledged that companies have not found efficient ways to overcome it [11,12]
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