The effect of path-dependence and uncertainty on the value of mature technologies

Lars Alkærsig; Karin Beukel; Giancarlo Lauto

doi:10.1142/S1363919618500056

The effect of path-dependence and uncertainty on the value of mature technologies

Lars Alkærsig, Karin Beukel, Giancarlo Lauto

Section for Production, Markets and Policy

Abstract

This paper examines whether technological advances benefit more from path-dependent or path-creating capabilities. Consistently with recent advances in the literature, we argue that multiple technological trajectories can coexist in a field; therefore, firms may contribute to technological development by recombining in novel ways the capabilities that are widespread in the field, or by building novel and rare capabilities. The paper also conceptualises how technological uncertainty affects the value of such capabilities. Using patent data from 1977 to 2007 for firms developing the hydrocracking technology, the paper finds that both rare and widespread capabilities are valuable to the invention process, thereby suggesting that both path-dependent and path-creating strategies are beneficial for technological development. The paper shows that uncertainty has an inverted U-shaped effect on invention value. In particular, under conditions of low uncertainty, path-dependent capabilities tend to be more valuable.

Original language	English
Article number	1850005
Journal	International Journal of Innovation Management
Volume	22
Issue number	01
ISSN	1363-9196
DOIs	https://doi.org/10.1142/S1363919618500056
Publication status	Published - 1 Jan 2018

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abstract = "This paper examines whether technological advances benefit more from path-dependent or path-creating capabilities. Consistently with recent advances in the literature, we argue that multiple technological trajectories can coexist in a field; therefore, firms may contribute to technological development by recombining in novel ways the capabilities that are widespread in the field, or by building novel and rare capabilities. The paper also conceptualises how technological uncertainty affects the value of such capabilities. Using patent data from 1977 to 2007 for firms developing the hydrocracking technology, the paper finds that both rare and widespread capabilities are valuable to the invention process, thereby suggesting that both path-dependent and path-creating strategies are beneficial for technological development. The paper shows that uncertainty has an inverted U-shaped effect on invention value. In particular, under conditions of low uncertainty, path-dependent capabilities tend to be more valuable.",

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The effect of path-dependence and uncertainty on the value of mature technologies

Abstract

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