Impact of Industry Conditions on Innovation

Abstract

This chapter underscores the importance of timing by focusing on the effect of pre-existing standards and regulations on the innovation and diffusion of new high-tech product innovations. The effect is assessed in terms of the time interval between the invention of a technological principle and the introduction of the first marketable product (development phase), and the successive time interval up to the start of large-scale industrial production and diffusion (adaptation phase). Fifty heterogeneous cases of new high-tech product innovations from 1850 onward are analysed. Results indicate that pre-existing standards and regulations significantly shorten the adaptation phase, an effect not found for the development phase. The shortening effect on the adaptation phase is particularly evident for more radical innovations and for innovations that are more interrelated with a larger technological system. This accelerating effect on the diffusion of innovations is highly relevant for innovation managers and policy makers alike.