Changes in industrial leadership and catch-up by latecomers in shipbuilding industry

TLDR

The shipbuilding industry’s leadership shifts—from Japan’s early adoption of welding block and rapid path‑creation to Korea’s swift uptake of 3D CAD—illustrate how latecomers can adopt and reinvent technologies to overtake incumbents. This study examines the successive changes in industry leadership from a Schumpeterian perspective. The study reveals that the incumbent trap in shipbuilding stems from institutional factors rather than cost–benefit trade‑offs, and that the sector’s technological windows are unique, involving consolidated systematised technologies that reshape the entire production process.

Abstract

This study considers the shipbuilding industry to explain the successive changes in leadership from the Schumpeterian perspective. The window of opportunity for Japan to forge ahead of the UK was the arrival and employment of new technologies, a method referred to as welding block. The Japanese firms also adopted path-creation, a strategy that involves the use of innovations more promptly than the incumbent UK, which had delayed adoption due to the opposition of labour unions. The leadership shift from Japan to Korea also represents path-creation given that Korean firms responded quickly to the rise of a new window of opportunity (i.e. systematised 3D computer-aided design technologies) and met the newly rising demand in large vessels that was the second window of opportunity. Both of these cases of path-creation are an adoption and follow-on innovation mode because the latecomers not only adopted new technologies, but also reinvented them further into a new system of production. This study also finds the unique, institutional nature of the source of the incumbent trap in the shipbuilding industry, which is different from that associated with the relative costs and benefits of new versus old technologies. In addition, this study identifies the peculiarity of the technological regimes of the shipbuilding sector and the associated unique nature of the technological window of opportunity, which are not merely competence-destroying innovations of component technologies but a consolidation of a new systematised technology that has changed the entire process of shipbuilding.