‘Built to last’ or ‘new and improved’? Trajectories of industrial evolution in the European motorcycle industry, 1885–1993

Technological innovation is widely considered as one of the major determinants of industrial evolution and corporate change. The distinction between competence enhancing and competence destroying innovation provides a suggestive theoretical link between technological change and the dynamics of organizational populations and industries. Yet, empirical evidence in support of this theoretical distinction is relatively weak, and agreement is still lacking about the long-term consequences of technological innovation for the demography of corporations and industries. In this paper we use data collected on the evolution of the motorcycle manufacturing industries in Great Britain, Germany, France and Italy during the period 1895 and 1993 to analyze the relationship between innovation and demographic rotation in organizational populations. The findings that we report corroborate selected aspects of the theoretical distinction between competence-enhancing and competence-destroying innovation. While we find the survival experience of organizations in different countries to be roughly similar, we also discover relevant elements of differentiation across them with respect to radical technological innovation, and to the competitive experience of incumbent companies. European Management Review (2009) 6, 107-119. doi:10.1057/emr.2009.10