The Role of Industry-Specific Capabilities during the Diffusion of a General Purpose Technology: The Case of Digital Cameras

Many studies support the view that firm capabilities that are developed via experience in the traditional industry are major determinants of success for entrants to new product markets. However, where new product innovations are not isolated occurrences, but part of the diffusion of a general purpose technology (GPT), traditional capabilities may be downgraded when new start-ups and outsiders with generic technology expertise or brand-name advantages enter the industry. Using the digital camera as a typical example of a GPT-induced innovation and a sample of 82 early entrants to that market, I find that experience in the precursor industry remains a key determinant of success and survival for new market entrants, although entrants with experience of the new technology also appear to be disproportionately successful.