Patterns of Industrial Evolution, Dominant Designs, and Firms' Survival

This paper surveys recent research on the concept of a dominant product design. The point of departure for the survey is the idea that dominant designs occur which shift the terms of competition in an industry. A dominant design is defined as a specific path along a design hierarchy, which establishes primacy among competing design paths. The way in which this might occur and its implications for innovation and competition are then explored. Evidence from the literature covering a number of industries in the United States is then surveyed and compared with original evidence, first presented here, from some of the same industries in Japan. The dominant design which emerges in each industry is not necessarily the result solely of technical potentials, but also of timing, collateral assets, and other circumstances. In several cases dominant designs have not or have not yet occurred. Once a degree of standardization is accepted, major innovations in an industry seem less and less likely to occur short of a wave of new entrants and increasing competition. In contrast, entry and innovation in Japan seem to occur following appearance of the dominant design, and implies that firms can pursue widely different strategies so long as their strategy is linked to the state of evolution of their core technology. Implications for further research are discussed, and the idea that a dominant design is related to information economies for users is introduced. Thus, for a design to be dominant or a standard requires a degree of experimentation and a rich collaboration between producers and users, not simply a synthesis of parts and functions in a product.