Rewards and Functionality: Techno-Supply-Push and User-Demand-Pull R&D and Innovation

Purpose - This paper builds upon predominant theories of disruptive innovation and develops a framework for analysis in context of technology-push and end-user-pull interaction. The article takes a holistic view of the techno-supply-push (TSP) and user-demand-pull (UDP) innovation theories of disruptive innovation. The two-sides of the innovation market are considered in the context of a game-theoretic approach.

Approach – The approach of this research is to review the relevant literature in order to integrate key findings from two main bodies of theory referred to as TSP and UDP. The integration leads to statement of a conceptual model and its relevance is considered by suggesting examples.

Findings – The paper supports the idea that disruptive innovation is a consequence of both supply and demand side interactions. It expands upon and clarifies the dynamic and interactive nature of innovation and suggests a conceptual process model. Having clarified and integrated the TSP and UDP approaches to innovation, the article proposes that a key factor differentiating the two sides of the market relates not so much to the origin of ideation, but to the bargaining process and the relative strength of the players.
Originality/Value - This research analyzes disruptive innovation as a holistic, two-sided process requiring integration of TSP and UDP perspectives. The paper points toward recognizing differences in bargaining structures related to the market participants, i.e., firms or users. Examples are included in the paper as are management implications.