Managing Technological Transitions by Building Bridges

Abstract

While much research has demonstrated that radical technological transitions challenge incumbents, surprisingly little empirical work has examined which factors drive variation in their ability to invent in the new domain. Through a longitudinal study of photography firms transitioning from analog to digital technologies, we examine a key source of heterogeneity: whether and how incumbents integrate knowledge related to both old and new technologies to bridge generations. Specifically, we explore how the use of three types of intergenerational knowledge bridges—(1) inventor bridges, (2) technology bridges, and (3) hybrid product bridges—influences inventive performance in the new generation. Consistent with theories of inertia, we find that, on average, inventor and technology bridges are associated with lower performance in the new generation. However, the strength of a firm’s inventive performance in the old generation positively moderates this effect. When performance in the old technology is strong, both technology and hybrid product bridges are associated with higher inventive performance in the new generation. This finding suggests that, when combined with a strong R&D program, old-technology knowledge forms a foundation that incumbents can leverage to learn new technologies as they navigate transitions.

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