Shifting the Localized Innovation: Moderating Role of the Founders’ Prior Work Experience

Abstract

We address the question of how the evolutionary tendency of localized innovation can be shifted by work backgrounds of the founders in the context of emerging technology domain. While the localized nature of technology development has been under heavy scrutiny in the innovation research, we have limited understanding about the founders’ role in altering or continuing such trajectory. To address this issue, we investigate the emerging firms and their founders in the autonomous driving (AD), a highly-anticipated field that combines diverse areas of automotive and computing technologies. Using the patent data of 85 emerging AD firms that were recently founded in the U.S., we confirm the tendency to develop new technologies in the neighborhood of their knowledge base. This tendency of localized innovation is stronger in automotive technologies, as compared to computing technologies. Our findings further show that localized innovation in computing technologies is reduced by the founders’ work backgrounds in the relevant domains. Our findings highlight the importance of the founders’ role in shifting the innovation trajectories in the emerging technological domains.