8.4 Incremental innovation

Although Henderson and Clark’s approach to understanding degrees of innovation helps us to understand the significance of a technological innovation in terms of its relationship to other technologies, it remains primarily ‘attribute focused’. That is, it understands the degree of innovation primarily in terms of the attributes of a particular technology, and the technological context in which it is used.

The distinction between radical and incremental innovations helps us to think not only about the attributes of a particular technological innovation but also about where the different types of innovation tend to take place. Large, established firms are (generally) less good at radical innovation, whereas smaller companies tend to be more able to make radical innovations. Much of the recent history of ICT appears to bear this out. In the 1980s, the (then) small start-up companies Microsoft and Apple responded to the radical innovation of the microcomputer in ways that larger established companies such as IBM could not. More recently, we have seen similar cases with the emergence of companies and products like Facebook and Twitter. To return to our hill-climbing metaphor, it is difficult to see how anyone would have arrived at an idea for either of these products by incrementally improving existing products; they represent rather different hills.