In the literature on path dependency in processes of innovation and technical change, two partly conflicting perspectives are presented. Within the first perspective, it is argued that the cumulative nature of technical change creates persistence in innovative activities: accumulated competencies and learning within a specific field generate new research questions and opportunities for innovation and create entry barriers, which works in favour of incumbent firms and limits the role of new innovators in an industry (Malerba et al., 1997). In contrast, the other perspective emphasises that path dependency gradually decreases the number of available future options (Aminzade, 1992; Araujo and Harrison, 2002) and eventually leads to lock-in to inefficient, inferior or unsustainable technology paths (Cowan and Gunby, 1996; David, 1985; Unruh, 2000).
Within both these perspectives, paths tend to be conceptualised as single technological trajectories. However, in some industries multiple trajectories are pursued in parallel and new trajectories are added over time. This raises the questions of whether such industries still can be path dependent and, in that case, where path dependency occurs: within or across trajectories and at the company or industry level. To what extent does the incumbents’ development of newly added trajectories build on their existing knowledge base? The purpose of this paper is to answer these questions by analysing technological activities of three leading firms in the lighting industry.
The paper is based on an analysis of lighting patents granted to General Electric (GE), Osram/Siemens and Philips and their key subsidiaries by the US Patent and Trademark Office (USPTO) over a period of 35 years (1976-2011). Lighting-related patents were identified through a combination of class-based search and title- and abstract-based keyword search.
Our analysis shows a common patenting pattern between the three companies: about 70% of all the patents in the dataset belong to seven most frequently used classes and about 50% - to the top three classes. Most of these classes can be described as traditional since companies used them during the whole period of analysis. While some of them are declining both in terms of patent shares and numbers (H01K – Incandescent lamps), others are stable or growing (H01J – Discharge lamps, F21 – Lighting, H05B – Electric lighting, C09K – Materials for applications). Such long-term stability of traditional classes and similarity of patenting patterns between the three companies indicate technological persistence both at the company and the industry levels.
The most recent addition to the companies’ patent stock is the semiconductors class (H01L). It has been intensively developed since the late 1990s, when industry incumbents joined the LED technology which was pioneered by new entrants. However, about 30-40% of the LED-related patents of GE, Osram/Siemens and Philips still belong to traditional lighting classes. Companies have, thus, been able to use their previously accumulated expertise in the development of LED lighting, in spite of its discontinuous character. While technological persistence in terms of LED development can be observed at both industry and company levels, there are some differences among the three companies.
An analysis of patent references shows that when a patent cites one of the company’s own lighting patents, in 60-70% of the cases both patents belong to the same first class, which is a clear sign of path dependency inside trajectories. However, pairwise usage of patent classes indicates not only persistence inside technological trajectories, but also a complex relation between them since patents frequently belong to several classes simultaneously. In particular, H01J (discharge lamps) is the most frequently used secondary class.
The main conclusions of the paper are the following: first, we have found signs of path dependency in the lighting industry at the company level in a form of technological persistence. Although persistence inside technological trajectories is especially strong, there is also a complex interconnection between trajectories which indicates that previous association of paths with single trajectories is too simplified. Second, a similarity of companies’ patenting patterns in almost every aspect of the analysis provides a clear evidence of path dependency at the industry level. Third, the LED example shows, on the one hand, a break with previous activities, and on the other hand, the ability of incumbents to use their accumulated expertise when developing a new, even radically different, technology. Overall, it can be concluded that path dependency can exist in industries with multiple technological trajectories. However, whether this path dependency is productive and efficient or will lead to unsustainable lock-in remains to be seen.
Path dependency, technological trajectories, technological persistence, industry incumbents, lighting industry, patent study
The 2012 International Schumpeter Society Conference, 2-5 July, Brisbane, Australia