IDEAS home Printed from https://ideas.repec.org/a/taf/indinn/v19y2012i5p415-435.html
   My bibliography  Save this article

The Impact of a Radical Innovation on Business Models: Incremental Adjustments or Big Bang?

Author

Listed:
  • Marc Bourreau
  • Michel Gensollen
  • François Moreau

Abstract

In this paper we study the impact of a radical technological innovation on business models. Do firms react by adjusting their business models incrementally, through iterative steps? Or do such innovations lead, instead, to a big bang of new innovative business models that are all adopted and experimented with by the industry? To answer these questions, we analyze the impact of digitization—a radical innovation—on business models in the recorded music industry. Using an economic analysis of the effects of digitization, we begin by building five potential digital business models for the music industry. Then, using data from a survey on a sample of French record companies, we map these record labels on our digital business models. Our analysis suggests that digitization has led to a big bang of business models in the music industry, rather than to incremental adjustments of the existing business model.

Suggested Citation

  • Marc Bourreau & Michel Gensollen & François Moreau, 2012. "The Impact of a Radical Innovation on Business Models: Incremental Adjustments or Big Bang?," Industry and Innovation, Taylor & Francis Journals, vol. 19(5), pages 415-435, July.
  • Handle: RePEc:taf:indinn:v:19:y:2012:i:5:p:415-435 DOI: 10.1080/13662716.2012.711026
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13662716.2012.711026
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jordan, Declan & O'Leary, Eoin, 2005. "The Roles of Interaction and Proximity for Innovation by Irish High-Technology Businesses: Policy Implications," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2005(2-Summer), pages 86-100.
    2. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications 98.15, Université Panthéon-Sorbonne (Paris 1).
    3. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
    4. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 22(4), pages 483-498, Winter.
    5. Peters, Bettina & Lööf, Hans & Janz, Norbert, 2003. "Firm Level Innovation and Productivity: Is there a Common Story Across Countries?," ZEW Discussion Papers 03-26, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    6. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    7. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-1152, December.
      • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
      • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    8. Anet Weterings & Roderik Ponds, 2009. "Do Regional and Non-regional Knowledge Flows Differ? An Empirical Study on Clustered Firms in the Dutch Life Sciences and Computing Services Industry," Industry and Innovation, Taylor & Francis Journals, vol. 16(1), pages 11-31.
    9. Michael Storper & Anthony J. Venables, 2004. "Buzz: face-to-face contact and the urban economy," Journal of Economic Geography, Oxford University Press, vol. 4(4), pages 351-370, August.
    10. Roper, Stephen & Du, Jun & Love, James H., 2008. "Modelling the innovation value chain," Research Policy, Elsevier, vol. 37(6-7), pages 961-977, July.
    11. Cameron,A. Colin & Trivedi,Pravin K., 2008. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9787111235767, November.
    12. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    13. M. S. Gertler & Y. M. Levitte, 2005. "Local Nodes in Global Networks: The Geography of Knowledge Flows in Biotechnology Innovation," Industry and Innovation, Taylor & Francis Journals, vol. 12(4), pages 487-507.
    14. Justin Doran & Eoin O'Leary, 2011. "External Interaction, Innovation and Productivity: An Application of the Innovation Value Chain to Ireland," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(2), pages 199-222.
    15. Joel L. Horowitz & N. E. Savin, 2001. "Binary Response Models: Logits, Probits and Semiparametrics," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 43-56, Fall.
    16. Weterings, Anet & Boschma, Ron, 2009. "Does spatial proximity to customers matter for innovative performance?: Evidence from the Dutch software sector," Research Policy, Elsevier, vol. 38(5), pages 746-755, June.
    17. Ian R. Gordon & Philip McCann, 2005. "Innovation, agglomeration, and regional development," Journal of Economic Geography, Oxford University Press, vol. 5(5), pages 523-543, October.
    18. Meric S. Gertler, 2003. "Tacit knowledge and the economic geography of context, or The undefinable tacitness of being (there)," Journal of Economic Geography, Oxford University Press, vol. 3(1), pages 75-99, January.
    19. Stephen Roper & Jan Youtie & Philip Shapira & Andrea Fernandez-Ribas, 2010. "Knowledge, Capabilities and Manufacturing Innovation: A USA-Europe Comparison," Regional Studies, Taylor & Francis Journals, vol. 44(3), pages 253-279.
    20. Ron Boschma, 2005. "Proximity and Innovation: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 61-74.
    21. repec:crs:wpaper:9833 is not listed on IDEAS
    22. Stephen Roper, 2001. "Innovation, Networks and Plant Location: Some Evidence for Ireland," Regional Studies, Taylor & Francis Journals, vol. 35(3), pages 215-228.
    23. Lissoni, Francesco, 2001. "Knowledge codification and the geography of innovation: the case of Brescia mechanical cluster," Research Policy, Elsevier, vol. 30(9), pages 1479-1500, December.
    24. Leon A.G. Oerlemans & Marius T.H. Meeus & Frans W.M. Boekema, 1998. "Do Networks Matter for Innovation? The usefulness of the economic network approach in analysing innovation," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 89(3), pages 298-309, August.
    25. Freel, Mark S., 2003. "Sectoral patterns of small firm innovation, networking and proximity," Research Policy, Elsevier, vol. 32(5), pages 751-770, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:spr:infosf:v:19:y:2017:i:4:d:10.1007_s10796-016-9638-x is not listed on IDEAS
    2. Prabhakaran, Thara & Lathabai, Hiran H. & Changat, Manoj, 2015. "Detection of paradigm shifts and emerging fields using scientific network: A case study of Information Technology for Engineering," Technological Forecasting and Social Change, Elsevier, vol. 91(C), pages 124-145.
    3. Gamble, Jordan Robert & Brennan, Michael & McAdam, Rodney, 2017. "A rewarding experience? Exploring how crowdfunding is affecting music industry business models," Journal of Business Research, Elsevier, vol. 70(C), pages 25-36.
    4. Michaela Sprenger & Tobias Mettler & Robert Winter, 0. "A viability theory for digital businesses: Exploring the evolutionary changes of revenue mechanisms to support managerial decisions," Information Systems Frontiers, Springer, vol. 0, pages 1-24.
    5. Charlotte Krychowski & Bertrand Quelin & Bulat Sanditov, 2017. "Experimenting business models with network effects : a real options perspective," Post-Print hal-01582498, HAL.
    6. Athena Roumboutsos & Stéphane Saussier, 2014. "Public-private partnerships and investments in innovation: the influence of the contractual arrangement," Construction Management and Economics, Taylor & Francis Journals, vol. 32(4), pages 349-361, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:indinn:v:19:y:2012:i:5:p:415-435. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/CIAI20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.