Technology Dynamics in Multi-Technology Industries : Selection and Variety Creation through the Lens of Path Dependency and Path Generation

Abstract: This thesis studies technological development in multi-technology industries, or industries characterized by co-existence of several technological alternatives that are used in the same or largely overlapping applications and markets. Although a lot of industries can be considered as multi-technological, they are understudied in the current research. Therefore, thesis purpose is to explain the processes of variety creation and selection in such industries. These two processes, considered in evolutionary economics literature as central for understanding technology dynamics, have specific characteristics in multi-technology industries and require a separate conceptualization.As theoretical tools to consider the processes of selection and variety creation, the concepts of path dependency and path generation are chosen, respectively. To account for the specifics of the selection process, the framework of multiple paths and path interaction is suggested. This framework acknowledges the existence of persistence and self-reinforcing mechanisms at the level of narrowly defined technologies as well as at the overall industry level. The specifics of the process of variety creation are found to be defined by the influence from the process of selection. Therefore, variety creation is studied by analyzing how path dependency affects path generation. Three types of such influence are suggested: negative, neutral and positive.Using the suggested concepts, the empirical case of the multi-technology lighting industry is considered with the help of patents analysis as well as the study of secondary data sources. As a result, several specific characteristics of the processes of selection and variety creation are revealed and explained.The process of selection is found to be present at two levels: the level of narrowly defined technologies and the overall industry level. While the former level is well in line with traditional conceptualizations of selection mechanisms, it is the latter one that represents the specifics of multi-technology industries. The overall industry-level selection is based on partial overlaps between technologies and helps to explain why selection is not fully based on technology competition, but allows for positive interaction between alternatives.For the process of variety creation, it is found to be influenced by the process of selection in three different ways. First, negative influence is found in the form of barriers imposed on the process of new technology development. Second, neutral influence is observed in the way how the established technology shaped some of the characteristics of the new ones. This type of influence explains the cumulative nature of variety creation in multi-technology industries. Third, positive influence is seen in the form of opportunities provided for new technology development, which also explains the on-going and industry-internal character of variety creation.In sum, both processes are found to be different from traditional conceptualizations, and the interplay between them helps to sustain the multi-technological character of such industries.