Introduction From Technological Gap to Adoption Lead Theory

Introduction From Technological Gap to Adoption Lead Theory 

The entrepreneurial failure of countries to generate innovations has been discussed widely and especially made responsible for the decline of the British industry in the 20 century, see Tbirtle and Ruttan (1987, p. 125). 

This lag occurs because users in other countries have to be aware of the new product or process and new foreign products may not be regarded, for some reasons, as perfect substitutes for home-produced goods until some time elapses (Posner 1961, p. 333). Even the early technology gap studies find that demand factors influence the invention effort of firms. Poser (1961) notes that complementarities in consumption may lead to pressure for innovations in products jointly demanded with that just innovated (Posner 1961, p. 338). 

For most of the innovations studied by Gort and Klepper (1982), the first phase between invention and market take-off was the longest phase in the whole life cycle. The mean of the first phase for 46 products studied was 14.4 years. 

This chapter assesses a broad range of literature for the theory of lead markets. Chapter 3 will build on the wealth to develop the lead market theory as a new approach to leads of countries in the international diffusion of innovations. 

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