View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Nottingham Trent Institutional Repository (IRep) Technological discontinuities, outsiders and social capital: A case study from Formula 1 David J. Smith Nottingham Business School, Nottingham Trent University, Nottingham NG1 4BU, United Kingdom Abstract Purpose – The purpose of this paper is to examine how and why outsiders, rather than incumbents, are able to take advantage of technological discontinuities. Design/ methodology/approach – The paper employs a case study of a single innovation that transformed the technology of Formula 1 motor racing. Findings – The findings show how social capital made up of ‘weak ties’ in the form of informal personal networks, enabled an outsider to successfully make the leap to a new technological regime. Practical implications – The findings show that where new product development involves a shift to new technologies, social capital can have an important part to play. Originality/value – It is widely accepted that radical innovations are often competence destroying, making it difficult for incumbents to make the transition to a new technology. The findings show how the social capital of outsiders can place them at a particular advantage in utilizing new technologies. Keywords: Innovation; Outsiders; Social Capital; Technological Discontinuities; Paper type Research paper Biographical note: David Smith is Professor of Innovation Management at Nottingham BusinesPostprints School, Nottingham Trent University, Nottingham NG1 4BU UK. Email:
[email protected]; Tel 00 44 115 8484745. His research interests include: innovation, technology management, technology strategy and cluster theories. 1 1. Introduction Studies of a number of industry sectors (Christensen, 1997) have shown that radical innovations are significantly more likely to originate with firms that are outsiders rather than industry incumbents, especially if the innovations involve competence destroying rather than competence enhancing technological discontinuities.