Avoiding the Pitfalls of Emerging Technologies

by George Day, Paul Schoemaker


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Abstract

Despite their superior resources, incumbents have a poor track record in developing and managing emerging technologies. Established firms are prone to delay participation and stick with the familiar too long. Even if these pitfalls are sidestepped, incumbents are often unwilling to make a full-fledged commitment and find it difficult to persist in the face of uncertainty and adversity. Some established firms have been able to avoid these pitfalls by: attending closely to signals from the periphery of their markets; investing in a learning capacity so there is a diversity of viewpoints that challenge prevailing mind-sets and myopic views of new ventures; maintaining their flexibility by adopting a real options perspective, which lets the firm make informed investments when the time is right; and organizationally separating the fledging initiative pursuing the emerging technology from the mainstream activities.

California Management Review

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Published at Berkeley Haas for more than sixty years, California Management Review seeks to share knowledge that challenges convention and shows a better way of doing business.

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