Davids vs Goliaths in the small satellite industry: the role of technological innovation dynamics in firm competitiveness

In this paper, a conceptual framework of the nature, structure, and dynamic s of technological innovation is developed and applied to the small satelli te industry. Important components of this framework include: a) the speed a nd acceleration of technological innovation, and b) the linear and non-line ar interactions between technology producers and users (technology and mark et push and pull mechanisms). We conceptualize technology development and commercialization as an ongoing cooperative and competitive (co-opetitive) process involving enabling and inhibiting factors or mechanisms which govern the speed and acceleration of technological innovation. Enabling factors may include CRADAs, strategic a lliances, spin-offs, intellectual property rights, SBIRs, and mentor-proteg e relationships. Inhibiting factors may include excessive regulation at sta te, national, and international levels, technological, structural or financ ial barriers to market entry, competitor response to market entry, and cult ure clashes such as engineering versus marketing culture or firm versus gov ernment Versus university cultures. These enabling and inhibiting factors i nfluence and are also influenced by technological and market pulling and pu shing forces. We postulate that the size of a firm, in addition to its ability to adapt t o and/or absorb technological and market discontinuities, determines the ra te at which it innovates (speed of innovation), as well as the rate at whic h it varies its innovation speed (acceleration of innovation). It is also p ostulated that a firm's speed and acceleration of innovation are directly p roportional to its long-term competitiveness and market success. This conceptual framework was employed to evaluate the capability of small and large firms to develop and commercialize new technologies in the small satellite industry. Three firms that are active players in the small satell ite industry were examined. These firms are small relative to the large aer ospace giants (such as Lockheed Martin and Boeing) but they vary in size an d age. Two of the firms studied are US start-ups and one is a British unive rsity spin-off. Our findings were synthesized to derive insights that could be generalized for the benefit of technology entrepreneurs as well as poli cy makers in other technology-driven and alliance-rich industries (C) 2000 Elsevier Science Ltd. All rights reserved.