Innovating during disruption: An assessment of firms’ knowledge absorption from suppliers across disruptive and sustaining technologies

Incumbent firms facing technological disruption are challenged to modify their innovation pursuits and search for new knowledge. This means that product innovation developments must integrate potentially disruptive technologies together with innovations in sustaining technologies. In this study, we investigate how firms absorb knowledge from their supplier base to generate innovations in components experiencing ongoing technological disruption, as well as components comprising sustaining technologies. Using a longitudinal sample of global automotive manufacturers and their most relevant components, we distinguish innovations pertaining to disruptive and sustaining technologies. Our findings reveal that firms increasing absorption of innovation knowledge from current suppliers, in which the firm has an established supply agreement, only benefits value for sustaining technologies, whereas increasing knowledge absorption from potential suppliers with no previous supply agreement benefits value for disruptive technologies. We also found that retrieving back spilled knowledge from suppliers is only advantageous to innovations in sustaining technologies. We conclude with a theoretical assessment of innovation learning from suppliers in the context of technological disruption and its managerial implications.