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From old competence destruction to new competence access: evidence from the comparison of two discontinuities in anticancer drug discovery

Sosa, M. Lourdes (2011) From old competence destruction to new competence access: evidence from the comparison of two discontinuities in anticancer drug discovery. Organization Science, 22 (6). pp. 1500-1516. ISSN 1047-7039

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Identification Number: 10.1287/orsc.1100.0616

Abstract

Research in creative destruction has argued that competence-destroying discontinuities result in incumbents' underperformance in research and development (R&D) with respect to entrants, even if complementary assets aid incumbents in retaining market share. In this paper, I propose that attention to the extent of competence destruction is necessary but not sufficient. An analysis of differences in R&D performance through a discontinuity requires assessment not only of old competence destruction but also of new competence access; that is, it requires assessment of both old capability obsolescence and new capability acquisition. I find evidence for this proposition in data from the biotechnology disruption to the anticancer drug market. In particular, my research design is a within-market matched pair of discontinuities: from chemotherapy to small-molecule targeted drugs, and from chemotherapy to large-molecule targeted drugs. Although equally competence destroying, the two discontinuities differ in the access incumbents have to the new capabilities required: whereas all new capabilities are available in the former, one new capability is inaccessible to incumbents (and to many entrants) in the latter. The contrasting results of these two discontinuities support my proposition: in the competence-destroying discontinuity with full access to new capabilities, incumbents did not fall behind entrants; in the other discontinuity, incumbents fell behind only those entrants that owned the difficult-to-access new capability. I close with implications for research in creative destruction, in rational adaptation to environmental change, and in strategic renewal.

Item Type: Article
Official URL: http://pubsonline.informs.org/journal/orsc
Additional Information: © 2011 INFORMS
Divisions: LSE
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Q Science > QR Microbiology
Date Deposited: 11 Sep 2014 09:18
Last Modified: 08 Oct 2019 11:15
URI: http://eprints.lse.ac.uk/id/eprint/59438

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