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Market Shaping through Radical Technological Innovation
Authors: Julia A. Fehrer (University of Auckland, New Zealand), Julia M. Jonas (University Erlangen-Nuremberg), Suvi Nenonen (University of Auckland, New Zealand), Kaj Storbacka (University of Auckland, New Zealand), Roderick J. Brodie (University of Auckland, New Zealand)
For radical technological innovations markets are largely absent. This is because radical technological innovation often comes with a huge variety of application fields and outputs that are unpredictable and uncertain (Frishammar et al., 2016). Thus, we suggest to rethink markets by viewing them as systems, where versatile actors learn, discover, and acquire information from one another in the system (Vargo et al., 2015), and thereby shape this system (Nenonen and Storbacka, 2018). Radical technological innovation is particularly insightful and rich for understanding how markets evolve in perpetual reciprocal processes through the interplay of versatile actors, including founders, incubators, potential customers, universities, policy makers and investors. With this research project, we aim to understand how networks, centred in radical technological innovation evolve and how these networks shape of ready markets.
We analysed two embedded case studies – displaying the New Zealand and the North Bavarian innovation ecosystem, including three deep-tech(nology) start-up cases each. We are using an abductive reasoning approach and systematically combine literature on radical innovation in networks (e.g. Aarrikka-Stenroos et al., 2014), entrepreneurial networks (e.g. Ferrary and Granovetter, 2009) and market innovation (e.g. Araujo, 2007; Kjellberg et al., 2012) with expert knowledge extracted from the cases (Dubios & Gadde; Nenonen et al., 2017).
To understand the complex innovative capability of New Zealand’s and the North Bavarian innovation ecosystems, we first mapped networks of influential actors. In drawing the relationships and putting them on a timeline, we got a grasp of the heterogeneity of actors and the multiplexity of ties that support the creation and development of deep-tech start-ups (Ferrary and Granovetter, 2009). We examined the multiplexity of ties on a dyadic level and on a system level. Particularly interesting seems the dyadic relationship between the visionary founding team and their mentors. Mentors – which are usually successful (serial) entrepreneurs or business angles – open their network to the founding team, speed up the transition process to position in a market and help to find or create the market. In order to attract mentors, founders need the ability and desire to scale fast; show openness and willingness to learn; and to develop ‘split’ personalities of tech-savvy engineers and confident marketeers.
On a system level, systemic learning appears to be one central process, including building up awareness and acceptance of an entrepreneurial culture; learning as a system to invest in start-ups and to deal with intellectual property; and developing an inclusive infrastructure. As a central contribution, we develop an alternative framework for entrepreneurs, managers, investors and public policy makers to assess the shaping potential of markets in the context of radical technological innovation.