Start-Up Commercialisation Strategy and Innovative Dynamics

32 Pages Posted: 23 Jan 2006

See all articles by Joshua S. Gans

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

Date Written: January 2006

Abstract

This paper endogenises a start-up's choice between competitive and cooperative commercialisation in a dynamic environment. It is demonstrated that, depending upon firms' dynamic capabilities, there may or may not be gains to trade between incumbents and start-ups in a cumulative innovation environment; that is, start-ups may not be adequately compensated for losses in future innovative potential. Because of this, there is no clear relationship between observed inter-industry innovation and commercialisation choice unless dynamic capabilities of firms are taken into account. In addition, the analysis demonstrates subtle and novel insights into the relationship between dynamic capabilities and rates of innovation.

Keywords: innovation, incumbency, dynamic capabilities, licensing, commercialisation

JEL Classification: O34

Suggested Citation

Gans, Joshua S., Start-Up Commercialisation Strategy and Innovative Dynamics (January 2006). Available at SSRN: https://ssrn.com/abstract=877761 or http://dx.doi.org/10.2139/ssrn.877761

Joshua S. Gans (Contact Author)

University of Toronto - Rotman School of Management ( email )

Canada

HOME PAGE: http://www.joshuagans.com

NBER ( email )

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United States

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