The Response of Old Technology Incumbents to Technological Competition : Does the Sailing Ship Effect Exist?

This article investigates whether firms react to a radical technological substitution threat by a deliberate acceleration of innovation in their existing technology - the "sailing ship effect". There have been repeated claims that the effect has been significant as a source of innovation (Foster, 1988; Rosenberg, 1976; Rothwell and Zegveld, 1985; Utterback, 1996). Detailed reexamination of two cases thought to be exemplars of the effect reveals that it existed in neither. It is suggested that the characteristics of historical, technological substitution processes prompt misinterpretation based on superficial knowledge. Brief review of two other cases further supports this position. It is argued that if the phenomenon occurs, it is likely to be rare