J. Roland Ortt (Delft University of Technology) T ineke M. Egyedi (DIRoS)

1. Do Pre-existing Standards and Regulations Hamper or Stimulate the Development and Diffusion of Radically New High-tech Products? J. Roland Ortt (Delft University of Technology) Tineke M. Egyedi(DIRoS)

2. Introduction Theory Method Results Conclusions Cases Discussion • Introduction • Research question • Do pre-existing standards and regulations hamper or stimulate the development and diffusion of radically new high-tech products? • Does the effect depend on the degree of radicalness of the technology in the product? • Does the effect depend on the degree of interrelatedness of the technological system? • Radically new high-tech products • New type of performance and/or technology principle • Development and diffusion • Length of phases in innovation trajectory (Ortt, 2010) • 1. Development (1), invention to first introduction • 2. Adaptation (2), first introduction to large-scale production • 3. Stabilization (3), start of large-scale production • Pre-existing Standards and Regulation • set of standards, rules, laws and conventions available prior to the development of a new product Length phase 2 Length phase 1 Pre-existing standards & regulations

3. IntroTheory Method Results Conclusions Cases Discussion • Theory Standardization • Debate ‘Do standards and regulations hamper and/or stimulate innovation?’ • Reviews: Swann, 2000, 2010; Blind, 2004; SOU, 2007 • Constrain innovation: freeze technology development, limit product variety and choice • Enable innovation: codify knowledge, focus innovation, help create critical mass and economies of scale • False antithesis (Swann and Lambert, 2010) • Aim: Further clarify relation between standards/regulations and innovation & diffusion • What is new in our approach? • Look at different types of standards & regulations (timing)Pre-existing standards and regulations (specifying timing; Sherif, 2006) • Look at different effects on early innovation and diffusionEffect on speed of early innovation (development phase) and early diffusion (adaptation phase)(pre-diffusion phases) • Look at many cases in different industriesDifferent type of data: Many cases from different industries

4. IntroTheory Method Results Conclusions Cases Discussion Hypotheses Radicalness of the technology in product 3 1 Length of development phase Length of the adaptation phase Pre-existing standards and regulations 2 Interrelatedness of the technological system for the product

5. IntroTheory Method Results Conclusions Cases Discussion Method (1) Sample

6. Analyzed data Pattern Characteristics product technological system IntroTheory Method Results Conclusions Cases Discussion • Method (2) Data gathering • 50 historical cases of RNHP • For each case careful tracking of what happened over time • Establish pattern over time • For the first 25 cases we listed actors factors important for pattern • We specified these actors and factors (and the values for them) • We re-analyzed the first 25 cases using this coding scheme and • And then analyzed another 25 cases • Coding of the information regarding • the product, • the technological system • the (pre-existing) standards and regulations • 4 industries Timeframe:1850-2000 • Chemicals, metals and materials • Medicines • Telecommunication equipment • Electronic equipment Lit search Define unit Time table Pre-existing standards and regulations

7. IntroTheory Method Results Conclusions Cases Discussion • Method (3) Measuring the variables • Same approach to operationalization of • Interrelatedness of the technological system to which product innovation belongs • Radicalness of the technology in the product innovation

8. Length of the development phase Length of the adaptation phase Pre-existing standards and regulations IntroTheory Method Results Conclusions Cases Discussion Results (1) Dependent and independent variable Table 2: Correlation between pre-existing standards and regulations and the length of phases

9. IntroTheory Method Results Conclusions Cases Discussion Results (2) Moderating variable: Interrelatednesstechnological system

10. IntroTheory Method Results Conclusions Cases Discussion Results (3) Relationship dependent & independent variable taking moderating variable ‘Interrelatednessof the technological system’ into account Table 5: Correlation between ‘pre-existing standards and regulations’ and ‘the length of the adaptation phase’ for two sets of cases

11. IntroTheory Method Results Conclusions Cases Discussion Results (4) Relationship dependent & independent variable taking moderating variable ‘Radicalness of technology’ into account Table 6: Correlation between ‘pre-existing standards and regulations’ and ‘the length of the adaptation phase’ for two sets of cases

12. IntroTheory Method Results Conclusions CasesDiscussion Conclusion Pre-existing standards and regulations can shorten the adaptation phase, not the development phase; this is especially the case where innovative products are part of more inter-related technological systems and where more radically new technology is involved. Pre-existing standards & regulations No effect on development phase Shortening effect on adaptation phase Direct & moderated effects are only found for adaptation phase!

13. IntroTheory Method Results Conclusions Cases Discussion Cases to explain our findings (1) Why do pre-existing standards and regulations shorten early diffusion (adaptation phase) while they do not have such an effect on early innovation (development phase) Two cases: cellular mobile telephony and plasma screen Plasma screens Cellular mobile telephony

14. IntroTheory Method Results Conclusions Cases Discussion • Cases to explain our findings (2) • Why do pre-existing standards and regulations shorten early diffusion (adaptation phase) while they do not have such an effect on early innovation (development phase) • Two cases: cellular mobile telephony and plasma screen • Cellular mobile telephony • Why long development phase? • Long development phase can not be attributed to infrastructure. • AT&T perceived interests (King & West, 2002) • FCC blocked rapid introduction probably about 10 yrs (Gershon, 2003, p. 178) • Scarcity spectrum (public use: military, police, television; industrial use; private use) • Fear of AT&T monopoly position • Plasma screens • Very complex technology yet remarkably short development phase (patent delayed phase)(Weber, 2006) • Why a long adaptation phase? • Fragile technology not ready for commercialization (Weber, 2006) • Lack of standards (Uchiike, 2002; Mently, 2002) • Competition with LCD (Uchiike, 2002; Mently, 2002)

15. IntroTheory Method Results Conclusions Cases Discussion • Discussion • What do the results mean? • Standards and regulations can have a huge shortening effect on the adaptation phase; costly and risky phase (burnout of the pioneers) • Explanation lack of effect on development phase: effort to comply and vested interests seem to outweigh the effect of distributing the latest information and focussing the development efforts. (tentative based on 2 cases only) • Additional checks on results • Strong moderating effect of variable ‘Interrelatedness of technological system’ • Products from Telecom and electronics industry are relatively interrelated • ’Additional analysis shows no direct effect of infrastructure and compatibility on length adaptation phase. • Moderating effect of variable ‘Radicalness of technology • Further research • Development phase (test tentative findings from two cases) • Distinct effect of standards and regulations • Differentiation of standards • Timing of standardization & differentiation of innovation (Egyedi & Sherif, 2010)

16. Thank you! Questions?

17. Adaptation phase Stabilization phase Development phase Cumulative percentage of adoption ↑ Market Introduction T=0 (invention) → Time (in years) Pre-diffusion phases: development and adapation (Ortt, 2010)