Abstract: Pitfalls of Open Innovation: The Technological Trajectory in Laser Diodes in the United States and Japan

Hiroshi Shimizu

Abstract

By exploring the technological development of laser diodes in the United States, this study examines how firms began to utilize external research and development resources and how the shift from the vertical integration model to the open innovation paradigm influenced technological development. U.S. firms led development on the technological trajectories until the 1970s. In the 1980s, however, innovation in laser diodes began to depart from the trajectories in the United States. The finding of this study suggests that cumulative features of technological development on the trajectory gradually vanished as a result of surges in entrepreneurial startups and the utilization of external resources and paths to markets in the industry. This implies that development on the technological trajectory will be retarded if firms are not in markets that have a high concentration of rival competitors and if they explore untapped product markets when technology is still in the nascent stage.

BEH On-Line Paper