Absorptive capacity of demand in sports innovation

Almudi, I, Fatas-Villafranca, F, Potts, J and Thomas, S 2017, 'Absorptive capacity of demand in sports innovation', Economics of Innovation and New Technology, vol. 27, pp. 328-342.


Document type: Journal Article
Collection: Journal Articles

Title Absorptive capacity of demand in sports innovation
Author(s) Almudi, I
Fatas-Villafranca, F
Potts, J
Thomas, S
Year 2017
Journal name Economics of Innovation and New Technology
Volume number 27
Start page 328
End page 342
Total pages 15
Publisher Routledge
Abstract We propose a stylized and tractable Neo-Schumpeterian model of sectorial transformations in which demand side knowledge constraints inhibit innovation diffusion and industrial change, causing structural instability. Evolutionary competition in the model implies that innovation can overshoot the absorptive capacity of demand, leading to a slowdown in sectorial dynamism and even to structural collapse. Closed-form analytical results prove the existence of a unique stationary state in the dynamic model that is (globally) asymptotically stable. We show how the dynamic paths and the stationary rest-point depend on the trade-off between innovation and demand absorptive capacity parameters. To illustrate the plausibility and relevance of our results, we examine the Australian windsurfing industry in which diminished demand absorptive capacity (in the terms of the model) was a factor underlying sectoral collapse. We discuss how development of absorptive capacity of demand presents a collective action problem for an industry sector, and the role of demand side factors as constraints in industry and innovation policy.
Subject Industry Economics and Industrial Organisation
Economic Development and Growth
Heterodox Economics
Keyword(s) Industrial dynamics
sports industries
Absorptive capacity
Innovation models
Demand
DOI - identifier 10.1080/10438599.2017.1356045
Copyright notice © 2017 Informa UK Limited, trading as Taylor and Francis Group
ISSN 1043-8599
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