‘Push-to-focus’: How Convergence of Enabling Technologies Influences Specialization in Generality?

Abstract

Specialization in generality is a strategy, which allows inventing firms to capture value from their R&D activities, by contracting license of enabling technologies to diverse downstream application industries. This strategy helps firms to benefit from the economies of scope and latent gains by trading in intermediate market, without having to own complementary assets. However, due to pervasiveness and generality nature of enabling technology, it tends to converge into or with other technologies. Hence, we revise Rosenberg’s work and ask: how types of convergence influence firm’s choice to specialize in generality? Conversely to prior research, we argue that firms inventing in a converging environment do not perpetually opt to integrate their technologies. Our contribution to literature is threefold. First, we find strong associations between convergence types and firm’s choice to specialize in generality. Second, we develop a novel measure for specialization in generality based patent bibliographic and textual data. Third, we explore the role of cospecialized assets and technological relatedness in both one-way and two-way convergence of enabling technologies. Consequently, we discuss on how managers should commercialize their firm’s enabling technology, in light of our findings for both types of convergence.