Pathways for the co-evolution of new product development and strategy formation processes: Empirical evidence from major Austrian innovations

The purpose of this paper is to examine the intermingling of new product development and strategy making which are interpreted as co-evolutionary processes where self-organisation and emergence are significant phenomena.

The paper is based on an empirical study of 50 major Austrian innovations in various manufacturing industries developed by small and large firms in the 1980s and 1990s. The theoretical arguments for studying the innovation and strategy process are based on the findings of the complexity science.

The paper shows that emerging opportunities, self-organisation and strategic intentions are equally important for the development of new major product innovations as deliberate search processes and rational decision making. The author identifies three strategy paths concerning the innovation and strategy process which are described as “strategically managed innovations”, “strategically enabled self-organized innovations” and “purely self-organised innovations”.

While empirical studies investigating the emergent nature of strategy and innovation have so far mostly been analysed for very specific industries and firm types, this paper aims to deliver a broader empirical base for the question as to how strategy enables and guides the emergence of product innovations and how the development of new products contributes to the formation of innovation strategies.