too rapid adoption of new technologies can jeopardize the survival of organizations (Anderson and Tushman 1990; Musso 2009). One example is Rosenberg’s (1976) pioneering study on the aviation industry. Within the framework of this evolutionary work, there is also a debate about whether organizational change promotes organizational survival or mortality (Hannan and Freeman 1984; Nelson and Winter 1982). In this book, we consider that these different perspectives about the effects of innovation on organizations’ survival must be seen as complementary (Carroll and Teo 1996).
The study of innovation strategies of space firms leads us to highlight the existence of a positive link between slow adoption of innovations, product reliability and organizational survival. On the one hand, we show that the slow adoption of technological innovations is rational behavior when it allows reliability to be maintained. This strategy is mainly explained by risk aversion. On the other hand, it appears that the slow adoption of organizational innovations promotes the survival of organizations when the environment is risky. This strategy aims to maintain the high levels of reliability achieved during successful space missions by achieving rigorous organizational replication (i.e. replication of processes, rules, and methods). There are several similarities between these two strategies, which we call inertia strategies. First, the inertia strategy is not immobility but a prudent adoption of innovations. Then, these strategies are observed in a risky context as is the case in space activities. Finally, these strategies generally lead to delays in the adoption of innovations, even in the case of a high-tech industry.
These results explain why the slow adoption of innovations is a key success factor in the space industry. In a risky environment, this ensures the high levels of reliability required. We consider inertia strategies to be a rational response of space organizations. It is, therefore, necessary to reinterpret the notion of inertia within innovation management. As Rosenberg (1976) suggested, adopting innovations carefully can be more effective for the survival of organizations than adopting them too quickly. As a result, some technological and organizational delays reflect the control of a key success factor and not a weakness that must be reduced by accelerating innovation.
By studying the advantages of prudent adoption, we can interpret the conservatism displayed by a high-tech industry. However, our work ignores the risks of overly rigorous inertia strategies that would lead to underestimating high-potential innovations. The current acceleration of the commercialization of space forces existing firms to question whether they are facing innovations of this type.
Strategic diagnosis of new technologies
Artificial intelligence, big data, 3D printing, Internet of things, and miniaturization of satellites: these technologies feed into the last phase of the acceleration of the commercialization of space and could also be substitutes for some existing space technologies. In this context, existing firms are seeking to determine whether these technological promises are threats to be taken seriously or are rather a fad, which often exists with new technologies.
To help existing space firms make this diagnosis, we turn to the theory of disruptive innovations. This theory, introduced by Christensen (1997), is currently one of the most widely used to understand technological discontinuities. It indicates that when it is launched, disruptive innovation is not a threat because it is not purchased by the customers of existing firms. Existing customers do not value the new performance criteria introduced by disruptive innovation. Only a small group of customers with a limited budget value these new criteria. In addition to not posing a threat to existing firms, disruptive innovation also does not present an opportunity because it involves low margins and volumes. Therefore, disruptive innovation is only proposed by new entrants. In the medium term, disruptive innovation becomes a major threat. On the one hand, the performance of the disruptive innovation increases, which encourages the customers of the existing firm to buy it. On the other hand, due to the existence of a first mover advantage, existing firms are unable to catch up with new entrants who will gradually dominate the market. To avoid the fate of companies like Kodak and Nokia, when a technological discontinuity is introduced, existing firms must determine whether it will become a disruptive innovation.
Faced with this imperative, the theory of disruptive innovations has two weaknesses. The first is a confusing definition of the concept of disruptive innovation. All discontinuous innovations tend to be too quickly assimilated to disruptive innovations (Schmidt and Druehl 2008). This theory also presents a low predictive value for existing firms. The latter must act when the new technology is introduced; however, at that time, there are no criteria for making a decision. Indeed, it is difficult to identify among the technological promises those that will fail and those that will become disruptive innovations (Danneels 2004; Tellis 2006).
To address these weaknesses, we explore the concept of potential disruptive innovation suggested by Danneels (2004). We propose a precise definition by identifying the short-term characteristics of disruptive innovations. By studying the case of satellite miniaturization in light of this definition, we show that small satellites are imperfect substitutes for traditional satellites. This new technology, which is part of the current acceleration of the commercialization of space, represents a low threat to existing firms.
By precisely defining potential disruptive innovations, we help reduce the confusion surrounding the concept of disruptive innovation. We also propose an analysis grid to improve the diagnosis of the threat of potential substitutes.
Structure of the book
In Chapter 1, we introduce the theoretical and empirical framework of this book. We first present the definitions and theories used in innovation management. We then describe the space industry. In the following chapters, we successively study the three innovation trajectories mentioned above: the evolution of the space industry in light of economic considerations (Chapter 2), the innovation strategies of space firms (Chapter 3), and the strategic diagnosis of new technologies (Chapter 4).
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