Influence of risk on technology adoption: inertia strategy in the space industry

Abstract

Purpose – The topic of the risk associated with innovation is being investigated through the influence of technological risk on technology adoption. Design/methodology/approach – The paper analyses the dynamics of technology adoption in high technology products thanks to several regressions. The paper uses data gathered from a major European space integrator. Findings – The paper shows that a firm may implement a reliability-based inertia strategy under a specific context. This type of inertia strategy is rational and leads a firm to limit the adoption of new technologies and favours the reuse of proven technologies. This strategy is relevant to facing a risk of decrease in technical reliability. Research limitations/implications – While the space industry displays some similarities with other capital good industries, it remains specific compared to mass production industries. The current paper should be considered as a preliminary research that aims at structuring the notion of inertia strategy. Practical implications – In order to increase the commercial demand, the paper proposes that satellite manufactures adopt more intensive reliability-based inertia strategy and institutional demand asks for less experimental satellites. Originality/value – This paper contributes to show that delays in technology adoption should not systematically be regarded as a weakness. Implementing a strategy that aims at slowing down technology adoption may sometimes improve firm survival. The paper also intends to provide a new insight to the paradoxical nature of change.