ABSTRACT
This chapter shows that there are at least two distinct types of incremental innovations in product technology; cumulative and discrete, that has a major influence on the performance of industry incumbents during periods of relative design stability in an established industry. There is a wealth of literature in industrial organization, evolutionary economics, organizational theory and behavior, and strategic management that pertains to the industrial role, effects and characteristics of technology. Innovating and adopting cumulative changes, and being the first to market discrete changes in the product technology during the incremental era all indirectly improve an established firm’s chances of survival through the market share benefits associated with these actions. Some may argue that the empirical results obtained regarding the relationship between an established firm’s innovation choices and its subsequent market share and chances of survival are driven by firm size.
