Page 130 - ENTREPRENEURSHIP Innovation and entrepreneurship

53231_Innovation and Entrepreneurship.qxd 11/8/2002 10:50 AM Page 123

Source: New Knowledge 123

The first “window” in computers lasted from 1949 until 1955 or
so. During this period, every single electrical apparatus company in
the world went into computers—G.E., Westinghouse, and RCA in the
United States; the British General Electric Company, Plessey, and
Ferranti in Great Britain; Siemens and AEG in Germany; Philips in
Holland; and so on. By 1970, every single one of the “biggies” was
out of computers, ignominiously. The field was occupied by compa-
nies that had either not existed at all in 1949 or had been small and
marginal: IBM, of course, and the “Seven Dwarfs,” the seven small-
er computer companies in the United States; ICL, the remnant of the
computer businesses of the General Electric Company, of Plessey,
and of Ferranti in Great Britain; some fragments sustained by heavy
government subsidies in France; and a total newcomer, Nixdorf, in
Germany. The Japanese companies were sustained for a long time
through government support.
Then, in the late seventies, a second “window” opened with the
invention of micro-chips, which led to word processors, minicomput-
ers, personal computers, and the merging of computer and telephone
switchboard.
But the companies that had failed in the first round did not come
back in the second one. Even those that survived the first round
stayed out of the second, or came in late and reluctantly. Neither
Univac nor Control Data, nor Honeywell nor Burroughs, nor Fujitsu
nor Hitachi took leadership in minicomputers or personal computers.
The one exception was IBM, the undisputed champion of the first
round. And this has been the pattern too in earlier knowledge-based
innovations.
2. Because the “window” is much more crowded, any one knowl-
edge-based innovator has far less chance of survival.
The number of entrants during the “window” period is likely
to be much larger. But the structure of the industries, once they
stabilize and mature, seems to have remained remarkably
unchanged, at least for a century now. Of course there are great
differences in structure between various industries, depending
on technology, capital requirements, and ease of entry, on
whether the product can be shipped or distributed only locally,
and so on. But at any one time any given industry has a typical
structure: in any given market there are so many companies alto-
gether, so many big ones, so many medium-sized ones, so many
small ones, so many specialists. And increasingly there is only