NSTI Nanotech 2009

Innovation Policy in Emerging Domains of Activity: First-Mover Advantage or Curse?

J.L. Woolley
Santa Clara University, US

Keywords: innovation policy, first-mover advantage


Do first-mover advantages exist for public policy? The theory of the first-mover advantage has been well studied in organization theory and marketing science. It is generally accepted that first-mover firms have multiple benefits such as technological leadership, asset preemption, and heightened buyer switching costs (Lieberman & Montgomery, 1988; 1998). First-mover firms also have the disadvantages of free-ridership, technology uncertainty resolution, enabling new entrants, and incumbent inertia (Lieberman & Montgomery, 1988; 1998). Previous work has focused on the application of the first-mover theory to firms. However, the author argues that much can be gained in the application of first-mover advantage theory to other areas. Specifically, this study applies the arguments of first-movers to innovation policy in nanotechnology. Using the development of innovation policy in the nanotechnology field, the author examines all first and second-mover nanotechnology innovation initiatives in the United States form 1990-2005. These initiatives include science and technology-based (S&T) initiatives and economic-based innovation initiatives. The study finds that we must consider a broader range of conditions when examining the order of entry in innovation policy. For example, S&T initiatives gain a first-mover advantage from preempting academic resources while economic initiatives gain from preempting corporate resources. The findings also show that the benefits gained by first-mover advantage is specific to the level at which the policy is implemented. For instance, national innovation initiatives gain a first-mover advantage compared to other technologies. Local and state level innovation initiatives gain a first-mover advantage from clustering resources. The article concludes with a discussion of what follower policies can learn from first-movers. The maximization of second-mover advantages is also discussed. Oral presentation is preferred
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