The Response of Old Technology Incumbents to Technological Competition - Does the Sailing Ship Effect Exist?

This article investigates whether firms react to a radical technological substitution threat by a deliberate acceleration of innovation in their existing technology – the ‘sailing ship effect’. It has been argued that the effect is both significant and widespread and warrants a reexamination of our assumptions about the working of the competitive process (Rosenberg 1972). Reexamination of two cases thought to be exemplars of the effect shows that it existed in neither. It is argued that if the phenomenon occurs, it is likely to be rare.