Michel Callois

Innovation And Reliability Strategies In The Defense, Space And Semiconductor Industries: A Comparative Analysis

The objective of this paper is to understand why the pace of technical change has been slower in the defense and space industries than in semiconductors. To answer this question, we adopt an inductive method that exploits historical facts and patent statistics to provide empirical data. Basing our rationale on the appropriation and structural inertia arguments, we show that the constraints imposed by reliability in the defense and space industries impedes the appropriation of supra profits from innovation and thus slows the pace of technical change. The main managerial implication of this result is that technical inertia contributes to competitive success when the reliability constraint reaches high levels.