Specializing in general purpose technologies as a firm long-term strategy

Abstract

An important legacy of Nathan Rosenberg’s work is the notion of general purpose technologies (GPTs). This paper studies whether and when firms specialize in developing GPTs and trading them in intermediate markets, a strategy we call “specialization in generality.” In particular, we address whether this is a strategy adopted by young firms or instead a long-term strategy adopted by established firms—against the “common wisdom” that such firms specialize in downstream product markets.