Coping with a Radical Technological Change: Modes of Knowledge Recombination and Inventive Impact in the Photography Industry

Emerging technologies and radical technological changes often render obsolete most of the knowledge held by firms. To cope with such changes, incumbent firms need to develop new knowledge. Such knowledge has been characterized along two key dimensions: its proximity to the industry knowledge basis—ranging from building on the emerging technology itself to drawing from industry-related or industry-unrelated domains—and whether it is created internally or sourced externally. What is still unclear is whether, and if so why, these types of knowledge can be differentially useful for firms facing radical technological changes. To shed light on these matters, we analyze patents granted within the photography industry, in the context of the industry’s 30-year paradigm shift from chemical to digital technology. We find that that leveraging knowledge within the emerging technological domain has positive but smaller effects (measured as forward citations) on firms’ inventive impact than leveraging knowledge from related, and––albeit to less extent—even unrelated industry domains. Moreover, leveraging external knowledge has superior effects than relying on internal knowledge across all the previously mentioned knowledge types