Entrepreneurial Tweaking: An Empirical Study of Technology Diffusion Through Secondary Inventions and Design Modifications by Start-Ups
European Journal of Innovation Management, Vol. 16, No. 2, 2013, pp. 148-170
23 Pages Posted: 2 May 2014
Date Written: 2013
Existing theories of technological innovation posit a split between the incremental innovations produced by large incumbents and the radical innovations produced by entrepreneurial start-ups. This study presents empirical evidence challenging this foundational assumption by demonstrating that entrepreneurs play a leading role, not a subordinate role, in sourcing incremental innovations through secondary inventions and design modifications. Among the highest-ranked incremental innovations leading to the commercialization of the mechanized reaper and cloud computing services, nearly 90% were attributable to entrepreneurial start-ups. Paradoxically, however, an entrepreneurial start-up had only a one in fourteen chance of garnering returns from a reaper innovation and a one in nine chance of gains from a cloud computing improvement.
Keywords: Innovation, Diffusion, Value appropriation, Entrepreneurial tweaking, Entrepreneurialism, Start-ups, Technology
JEL Classification: O31, M13, O32, O33, N81
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