Are there any first-mover advantages for pioneering firms?: Lead market orientated business strategies for environmental innovation

October 1, 2012 Editor 0

Abstract

Purpose – In environmental policy first mover advantages for environmental technologies are often taken for granted. It is a popular view to see the state as a political entrepreneur who introduces a certain environmental policy instrument and thus becomes the world market leader or the lead market for the respective technology. Against this background, the purpose of this paper is to find out if the idea of first mover and lead market advantages can be justified by theories and empirical evidence.

Design/methodology/approach – A wide range of theoretical and empirical papers from the business management and industrial economics literature were reviewed to provide success factors for different timing-to-market and lead market strategies of environmental innovations.

Findings – A successful innovator is not necessarily the first but very often one of the early movers within the competition of different innovation designs. The paper shows that the success of a timing strategy depends on country-specific lead market potentials, on market and technology characteristics and on the regime of the country-specific regulation. On this basis the paper derives options for environmental innovation strategies for firms under different circumstances of markets, technologies and regulations.

Research limitations/implications – Patent applications, R&D expenditure, etc. are not unimportant input factors for the innovation, but all these supply-side factors are beyond the focus of this article. Practical implications – Research on the lead market and the timing to market takes centre stage when product innovations are in the development phase. Companies in countries that do not have sufficient above-average lead market attributes must target product innovations to fit the preferences of users in the lead market.

Originality/value – This paper is the first to analyse if different timing to market advantages and lead market advantages for environmental innovation can be justified by theories and by empirical evidence.
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Categories: Innovation

Tags: first mover, lead market, strategies for environmental innovation, theories and empirical evidence