Abstract for: Endogenous Transformation in the Automobile Industry

Established industries develop and mature along continuous trajectories defined by the underlying technological paradigm relevant to serve the value network of the industry. Technological discontinuities and/or preference shifts at the higher levels of the value network may trigger a technological transformation in the industry. Depending on different circumstances, the technological transformation process may have significant impact on the industry, reverting the continuous maturation process, creating new structures and changing the way business is done in the future. Here we describe the transformation process that is evident in today's automobile industry, which we call Endogenous Transformation, and compare it two transformation processes previously described in the literature (Disruptive and Radical Transformation). In an Endogenous Transformation process, a new technology is developed in a joint effort by most organizations in the industry to substitute the old technology, with which their value network cannot be served any longer in the future. Important conditions for an Endogenous Transformation process to develop is that new knowledge must be effectively protectable from being freely copied by the competition and that new knowledge is traded between organizations, preventing significant knowledge asymmetries in the industry.