Dynamic Commercialization Strategies for Disruptive Technologies: Evidence from the Speech Recognition Industry

• Published in: Management science Vol. 60; no. 12; pp. 3103 - 3123
• Main Authors: Marx, Matt, Gans, Joshua S., Hsu, David H.
• Format: Journal Article
• Language: English
• Published: Linthicum INFORMS 01.12.2014; Institute for Operations Research and the Management Sciences
• Subjects: Business innovation; Commercialization; Competition; Cooperation; Costs; Disruptive innovation; Dynamic programming; Emerging technology; Entrepreneurs; Evidence; Hypotheses; Incumbency; Industry; Innovation; Innovations; Licenses; Management science; Market; Market entry; Startups; Strategic management; Studies; Technological change; Technological innovation; Technology; technology commercialization strategy; Technology transfer; Telecommunications equipment industry; Trade; Voice recognition; United States
• ISSN: 0025-1909; 1526-5501
• DOI: 10.1287/mnsc.2014.2035

When start-up 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 start-up. 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 to 2010 confirms our main hypothesis. This paper was accepted by Bruno Cassiman, business strategy .