We examine the performance differences among startups in nascent industries, taking account of the distinct knowledge contexts from which they arise. Specifically, we investigate the effect of pre-entry experience on the performance of startups originating within the same industry (i.e. inside-industry spinouts) and those from related knowledge contexts along the value chain (i.e. outside-industry spinouts). Analyzing a novel dataset that includes all U.S. artificial intelligence industry startup entrants during the period 1980 to 2014, we find that inside-industry spinouts and outside-industry spinouts have comparable survival and successful exit rates, outperforming startups with no pre-entry experience related to AI. Exploring the heterogeneity among outside-industry spinouts, we also find that the higher survival rate of this category of entrants is driven by startups founded by individuals who previously worked for firms operating in upstream supplier industries. We discuss the implications of our findings for research on strategy and industry evolution.

While much of the academic literature on spinouts focuses on new ventures launched by the ex-employees of incumbent firms within the same industry, recent research shows that spinouts may also enter a focal industry from “knowledge contexts” outside of the incumbent industry. In particular, recent studies show that spinouts may enter from both upstream and downstream industries related to a focal industry along the value chain. Such spinouts have been called user-industry and supplier-industry spinouts. In this article, evidence from existing studies is collected to provide an indication of the relevance of such spinouts across various industries. This survey also includes an analysis of industry studies in which user- and supplier-industry spinouts may have been present but were not identified as such by scholars due to a difference in focus. The paper then considers the evidence accumulated to date in order to explore the industry contexts in which these two types of spinouts appear and to develop propositions concerning differences in the entry timing and product/market strategies of these startups.

Journal Article Introduction to the Industrial and Corporate Change special issue on: “knowledge resources and the heterogeneity of entrants within and across industries” Get access Gino Cattani, Gino Cattani New York University Leonard N. Stern School of Business, Tisch Hall, 40 West Fourth Street, 714, New York, NY 10012, USA. e-mail: gc59@stern.nyu.edu *Main author for correspondence. https://orcid.org/0000-0002-8310-7182 Search for other works by this author on: Oxford Academic Google Scholar Roberto Fontana, Roberto Fontana University of Pavia and ICRIOS-Bocconi University, Via San Felice 5, Pavia 27100, Italy. e-mail: roberto.fontana@unipv.it https://orcid.org/0000-0002-0187-6309 Search for other works by this author on: Oxford Academic Google Scholar Franco Malerba Franco Malerba Bocconi University, Via Roentgen 1, Milano 20136, Italy. e-mail: franco.malerba@unibocconi.it https://orcid.org/0000-0003-4083-2365 Search for other works by this author on: Oxford Academic Google Scholar Industrial and Corporate Change, dtad068, https://doi.org/10.1093/icc/dtad068 Published: 30 November 2023 Article history Editorial decision: 30 October 2023 Received: 30 October 2023 Accepted: 17 November 2023 Published: 30 November 2023 Corrected and typeset: 01 December 2023

This paper advances a general and unified framework to explain the patterns of entry in an industry. The specificity of a type of entrant is examined based on the match between the entrant’s prior experience, in terms of knowledge endowment, and the target industry context. The knowledge endowment is analyzed by focusing on its content—market, technological, organizational, and scientific—and its generic and specific nature. The target industry context is examined by looking at four basic dimensions: the stage of development of the target industry (the time dimension); the specific technological regime and related innovation patterns (the technological dimension); the demand regime (the demand dimension); and the institutional regime (the institutional dimension). These dimensions moderate the matching between the knowledge endowment of the type of entrants and the features of the industrial contexts. Our newly proposed taxonomy offers a more systematic and nuanced explanation of how the complex relationship between pre-entry experience and knowledge, entrants and the chosen target industry evolves over time.

This study examines the role of technological change in affecting the evolution of the links across sectoral systems. Although the extant literature has investigated various aspects of the links among actors and institutions within sectoral systems, how a rather isolated sectoral system can evolve into a sectoral system vertically related with other ones still remains an unexplored terrain. This study shows how radical changes in knowledge and technology may open new links and connect previously unconnected sectoral systems. During this process, a previously isolated sector may drastically change and expand its links with the upstream and downstream sectors. Consequently, sectoral systems may evolve in becoming highly interconnected in terms of firms, non-firm actors, and institutions. We illustrate this process with a case study of the evolution of the mobile communications sector, which has witnessed increasing vertical linkages with two key related sectors: upstream (e.g., semiconductors) and downstream (e.g., automobiles). The focus on changing links across sectoral systems calls for a multi-sectoral analytical framework for policymakers and industry practitioners in an era of technological convergence, interdependence, and interdisciplinarity.

While scholarly discussions on technological discontinuities have primarily focused on the supply-side of radical technological changes, they can also cause demand-side market disruptions. Specifically, the characteristic of customers might change radically in a new technological generation due to their preference shifts and sometimes the emergence of a new set of customers. As such, we investigate the relationship between incumbent firms’ prior market experiences and their adaptation to technological discontinuities. We empirically test our hypotheses using longitudinal data of market entry and exit among multiple technological generations in the computer printer industry between 1951 and 2021. Our results suggest that the prior market experiences related to the new set of customers could be a source of incumbent heterogeneity in successfully continuing its business in new technological generations.

Research Summary We study how the value of depth and breadth of experience shifts across generational technology cycles and industry evolution. Experience breadth builds organizational flexibility that is valuable during technology transitions and when the industry is younger, while experience depth builds domain-specific resources that are important during periods of technology stability and later periods of industry evolution. We test our theory in the console game industry, where publishers face repeated periods of transition and stability across multiple console generations. We find support for most hypotheses, except that the value of breadth correlates with the magnitude of any transition instead of decreasing linearly over time. We contribute to research on the changing value of firm experience and to the understanding of generational technological change during industry evolution. Managerial Abstract Many industries face generational changes. How incumbent firms handle those transitions is important to firm survival and success. We study how the prior experience of video game publishers helps them navigate transitions. First, we find that firms with deep experience in a genre produce more successful games in that genre only during stable periods in the industry. Second, the benefits of deep experience increase over time as some of the experience-built capabilities of the firm survive technological transitions. Third, broad and diversified firms perform best during generational transitions as they successfully enter new domains made popular by the generational shift. We suggest that the product strategies of video game firms should depend on the relevant experience they possess and the degree of environmental change.

While previous management studies suggest that product complementarity may provide an important mechanism in firms' market entry behaviors, we still do not know whether this relationship may hold in industries characterized by discontinuous technological generations. In this study, we suggest that changes in technological generations are a critical source of misalignment among complementary firms by focusing on the entry decisions of complementary firms. Using a unique dataset drawn from the computer printer industry, we found that firms in a specific product complementary market, vis-à-vis a generic market, have a higher likelihood of market entry into the focal industry characterized by multiple discontinuous technological generations. More importantly, the empirical analyses suggest that acquiring recombinant capabilities facilitates market entry by allowing the firm to utilize the relevant knowledge associated with complementarity. In addition, we show evidence that entrepreneurial start-ups are quicker than diversifiers in new market entry, suggesting the importance of entrant types in market entry.

For several decades, China tried to catch up in the automotive industry, yet until recently with little success. Now, the paradigm shift from internal combustion to electric driving has opened a window of opportunity to catch up with global competitors. The Chinese government provided a strong policy push to become a lead market, allowing firms to accumulate technological capabilities and increasingly turn into lead manufacturers. This paper combines patent data and qualitative analyses of subsector trends to assess the technological capabilities and the international competitiveness of the Chinese industry in electromobility. We find that the country is indeed leapfrogging ahead in some domains (electric buses, lithium batteries) and rapidly catching up in others, including passenger vehicles. Ambitious green transformation policies can thus spur catch-up and competitiveness.

In high-technology industries, employee spinouts have increasingly been identified as attractive targets for acquisitions. Yet employee spinouts may originate from different knowledge contexts. This study adopts a resource base perspective to examine the impact of both the knowledge heritage and the product strategy of spinouts originating from different contexts (i.e. from the same industry or from a related downstream industry) on the potential to be acquired by firms in the same industry or in related industries. Our findings, based on data from the semiconductor industry and its related downstream industries, show that spinouts from firms in a focal industry represent appealing targets for a broad range of buyer firms from within the focal industry or from related, downstream industries, independent of their product strategy at entry. By contrast, spinouts from downstream, user industries that enter into an upstream industry, tend to appeal to a more limited set of buyers. Our study suggests that managers and academics should consider the acquisition of spinouts whose founders have origins in related industries as a channel to access critical knowledge from upstream or downstream contexts. Yet because many of the critical knowledge resources that spinouts possess are embodied in their founders, such acquisitions also require careful management of personnel decisions post-acquisition.

The role of knowledge, in particular its relatedness to that of the target industry, has often been emphasized as one of the main drivers in firms’ entry decisions. However, empirical analyses seem to show that knowledge relatedness may not always have a positive impact on entry, because the relationship is potentially nonlinear and may vary by entrant type. This study aims to explore these issues by proposing a perspective that may shed light on the mechanisms that govern the relationship between knowledge relatedness and firm entry. It then empirically tests these mechanisms by using a dataset constructed from the Western Electronics Manufacturer Association (WEMA) directory, spanning a time period from 1960 to 1990. The results suggest that the relationship takes an inverted U shape, which however can change drastically depending on the type of entrant.

We examine the issue of entrepreneurial gender bias by focusing on the underlying mechanisms that impact the likelihood of receiving external venture-capital financing. We claim that gender bias negatively affects socially attributed dimensions (such as the stigma ascribed to entrepreneurs who have previously suffered a failure), while it has no effect on objective dimensions (such as the experience gained by entrepreneurs). Our results, based on 2088 US firms, show that female entrepreneurs are less likely to attract external funds if they have previously encountered failure. This negative effect becomes less impactful when novel or serial successful entrepreneurs are considered. Consequently, novel or serial successful entrepreneurs are expected to suffer less from gender bias if compared to peers who experienced a failure during their entrepreneurial career.

This article explores how the components of the technological regime affect catching-up and leadership change in green technologies in countries that are leaders and successful latecomers. We look at the extent to which technological opportunity, cumulativeness, originality and complexity of the knowledge base, and the maturity of technology contribute to the growth of patenting in green technologies. We test the relationships using USPTO patent data in green technologies over a 40-year time span (1975–2015), distinguishing two periods (1975–1999 and 2000–2015) and controlling for country-specific variables. Our results show that opportunity, complexity, originality, and maturity of the technology are positively associated with countries’ growth of patenting in green technologies, while cumulativeness has a negative effect, but only in the second period (2000–2015). The stock of knowledge has a positive effect in the first period and a negative effect in the second one. Furthermore, we find confirmation that the process of growth in green patenting has been remarkable in successful latecomer countries (i.e., South Korea, Taiwan, and China).