Market Trajectory and Catching-up Evidences from China

Abstract

The traditional technological paradigm and trajectory theory illustrates the rationale of technological advancement, and implies how latecomer companies can seize the windows of opportunity of catching up and leapfrogging while new technological trajectory emerges. Yet, evidences from emerging markets have shown that industrial entry barriers are widely persist, and sometimes insurmountable for latecomers as they are often restrained by limited resources basis especially technological resource foundations. This study proposes market-based innovation paradigm and trajectories as a complementary approach to the technological dimension of trajectory theories. Illustrative cases of Chinese firms’ industrial entry and development show how latecomers can exploit a market trajectory perspective to continuously create value for the evolutionary consumer preferences, and gain competitiveness. Besides managerial implications for latecomer firms’ innovation and catching-up, this study also contributes to and bridges theories and literature such as trajectory, disruptive innovation, innovation ecosystem and reverse innovation.