NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

Matt Marx, Joshua S. Gans, David H. Hsu

NBER Working Paper No. 19764
Issued in December 2013
NBER Program(s):   PR

When startup 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 startup. 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 1952-2010 confirms the main prediction of the model.

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Document Object Identifier (DOI): 10.3386/w19764

Published: “Dynamic Commercialization Strategies for Disruptive Technologies: Evidence from the Speech Recognition Industry,” (with Matt Marx and David Hsu), Management Science, Vol.60, No.12, 2014, pp.3103-3123.

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