Inter-generational Hybrids: Spillbacks, Spillforwards, and Surviving Technology Discontinuities

Although technology discontinuities represent one of the most challenging organization events, the micro-processes by which incumbent organizations adapt to such technology transitions remain remarkably opaque. Some prior research has observed that during such discontinuities incumbents develop hybrid recombinations of the old and new technology. Although some work implies that such inter-generational hybrids may be the result of organizational dysfunction, we propose that these hybrids may be sophisticated learning tools that shape organization adaptation to a technological discontinuity. In this paper we explore this tension, suggesting two ways in which inter-generational hybrids may impact organization adaptation: spillbacks and spillforwards. In an empirical test among the population of U.S. carburetor manufacturers during a technological discontinuity, we observe that, dependent on their knowledge investments, some organizations developing inter-generational hybrids capture spillback benefits: knowledge spillovers from a competing technology generation to the current generation. Furthermore, we find that these same organizations also capture spillforwards: spillover benefits from developing inter-generational hybrids that improve their survival chances and their product performance in the future technology generation. These results suggest that inter-generational hybrids may be a missing stepping stone, within boundary conditions, for organizations to learn about and adapt to a technology discontinuity.