Understanding disruptive technology transitions in the global
logistics industry: the role of ecosystems
Author
Mikl, Jasmin, Herold, David M, Pilch, Kamila, #wiklicki, Marek, Kummer, Sebastian
Published
2020
Journal Title
Review of International Business and Strategy
Version
Version of Record (VoR)
DOI
https://doi.org/10.1108/ribs-07-2020-0078
Copyright Statement
© Jasmin Mikl, David M. Herold, Kamila Pilch, Marek ##Cwiklicki and Sebastian Kummer.
Published by Emerald Publishing Limited. This article is published under the Creative Commons
Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create
derivative works of this article (for both commercial and non-commercial purposes), subject to
full attribution to the original publication and authors.
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Understanding disruptive
technology transitions in the
global logistics industry: the
role of ecosystems
Jasmin Mikl
Institute for Transport and Logistics Management,
Vienna University of Economics and Business, Vienna, Austria
David M. Herold
Institute for Transport and Logistics Management,
Vienna University of Economics and Business, Vienna, Austria and
Business Strat egy and Inno vation, Gri ffith University , Southp ort/Gol d Coast, Aus tralia
Kamila Pilch and Marek
Cwiklicki
Department for Management of Public Organizations,
Cracow University of Economics, Cracow, Poland, and
Sebastian Kummer
Department of Logistics, School of Management, Jilin University, Changchun, China
Abstract
Purpose – Disruptive technologies in the global logistics industry are often regarded as a threat to the
existing business models of incumbents’ companies. Existing research, however, focuses mainly on whether
technologies have disruptive potential, thereby neglecting when such disruptive transitions occur. To
understand the timing of potential disruptive technological change, this paper aims to investigate the
elements of the underlying ecosystem shaping these transitions.
Design/methodology/approach – Building on the established ecosystem framework from Adner and
Kapoor (2016a), this paper constructs four categories of tech nology substitution to assess how quickly disruptive
change may occur in the global logistics industry and defines key technology substitution determina nts in
logistics to emphasize the role of ecosystems for further consideration into disruptive innovation theory.
Findings – Based on the key determinants, this paper proposes first definitio ns of distinct ive ecosystems
elements linked to the three types of innovations, namely, sustaining innovati ons, low-end disruptions and
new-market disrupt ions, thereby int egrating eco systems into Chri stensen’s (1997) disruptive inno vation theo ry.
Originality/value – By developing a framework that conceptualizes the pace of technology substitution,
this paper contributes to a more nuanced understanding of how logistics managers and academics can better
predict disruptive transitions and develop strategies to allocate resources.
Keywords Disruption, Logistics, Technology substitution, Disruptive technologies
Paper type Research paper
© Jasmin Mikl, David M. Herold, Kamila Pilch, Marek
Cwiklicki and Sebastian Kummer. Published
by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC
BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for
both commercial and non-commercial purposes), subject to full attribution to the original publication and
authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode
Technology
transitions
Received 10 July 2020
Revised 28 September 2020
Accepted 10 October 2020
Review of International Business
and Strategy
Emerald Publishing Limited
2059-6014
DOI 10.1108/RIBS-07-2020-0078
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/2059-6014.htm
1. Introduction
Disruptive innovations within the global logistics industry are of increasing strategic
importance for businesses and corporations as it impacts established paradigms, business
models and industry boundaries
(Barrett et al.,2015; Chapman et al.,2003; Cichosz et al.,
2020; Dobrovnik et al.,2018; Goldsby and Zinn, 2016; Klötzer and Pflaum, 2017). For
example, incumbent companies are challenged by disruptive technologies from logistics
start-ups that offer a range of services traditionally provided by established logistics
companies or providers (Bharadwaj et al.,2013; Hooper and Holtbrügge, 2020; Sandström
et al.,2009; Sucky and Asdecker, 2019; Tsiulin et al.,2020).
So far, most of the disruptive technology research has emphasized a rather static view
and has mostly focused on outputs, in particular on specific cases attempting to explain
whether a disruptive technology substitution occurs
(Cohen, 2018; Kothman and Faber,
2016), thereby neglecting the timeframes under which such transitions materialize. Research
shows that technology transitions in the global logistics industry are characterized by
significantly different timeframes: for example, one of the most frequent named innovations
in the global logistics industry is containerization, which can be regarded as a prerequisite
for today’s globalization. Containerization was not only a crucial factor due to the reduction
in sea freight costs but also for its dramatically saving in time in loading and unloading
(Hayut, 1981; Notteboom and Rodrigue, 2009). However, the adoption of containerization in
the shipping industry stretched from 1960 to 1980, i.e. only gradual substitution can be
observed, which can be attributed mainly to legacy systems and capital-intensive equipment
(Rodrigue, 2016). In contrast, the adoption of and the substitution to electric conveyor belts
in warehouses to distribute shipments to couriers for the last-mile delivery happened in
a much shorter timeframe (Kohli, 2007; Vrgo
c and
Ceri
c, 1988). That is, among other
factors, because the adoption of electronic conveyor belts is not dependent on extensive
external complementary parts, thus the new technology can be implemented and integrated
relatively quickly.
Drawing on both examples and their different pace of substitution, research has shown
the importance of interdependence involving network externalities such as complementary
products, markets and compatibility
(Autry and Griffis, 2008; Bowersox and Daugherty,
1995; Keller and Hüsig, 2009; Parry and Kawakami, 2017; Wieland et al.,2016), as well as the
support of other capabilities and services within a wider context, thus of an underlying
ecosystem (Ansari et al.,2016; Flint et al.,2005; Wallenburg, 2009). In other words, the pace
of substitution of innovations and new technologies is determined by the underlying
ecosystem. From a theoretical perspective, an understanding of technology substitutions by
examining ecosystems extends existing disruptive research – which investigated mainly
whether new technologies will prevail over old technologies (Adner and Kapoor, 2016a;
Christensen, 1997) – to the neglected debate of when technology prevalence will be achieved.
Current literature on disruptive innovation in the global logistics industry is limited to offer
directions regarding how logistics companies can manage the change from old technologies
to new technologies, thus the pace of technology substitution in the global logistics industry
is rarely understood.
In an attempt to close that gap, this paper investigates whether the pace of technological
substitution in the global logistics sector by examining the interdependencies of the
underlying ecosystems in which these technologies are embedded
(Adner and Feiler, 2019;
Ameer and Othman, 2012; Ansari et al.,2016; Iansiti and Levien, 2004; Talmar et al.,2018).
An understanding of the interdependencies also provides a more nuanced view how
ecosystems may predict disruptive or sustaining innovations (Christensen et al., 2011;
Christensen, 1997).
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In particular, we ask two research questions to advance the understanding of technology
substitutions and its associated ecosystems:
RQ1. How do ecosystems influence the pace of technology substitution in the global
logistics industry?
RQ2. What determinants in the ecosystems indicate disruptive or sustaining technological
innovati ons in the global logistic s industry?
To answer these questions, we build on two subsequent steps, namely, first, building on the
ecosystem framework from
Adner and Kapoor (2016a), we construct a model consisting of four
categories of technology substitution to assess how quickly disruptive change may occur in the
global logistics industry. Second, we subsequently define key determinants of technology
substitution in logistics ecosystems, thereby extending the disruptive innovation theory from
Christensen (1997) through the integration of ecosyste ms as a distinc tive element.
As such, the aim of this paper is threefold, namely, first, by categorizing the ecosystems
in terms of their old and new technologies, the model provides a basis for understanding
the varied implications of technology ecosystems, thereby contributing to a better
understanding of the influences of ecosystems on the pace of technology substitution in the
global logistics industry. Second, by linking the role of ecosystems to the concepts of
disruptive and sustained technologies, this paper expands the theory of disruptive
innovation, thereby showing that sustaining or disruptive innovations in the logistics
industry are not driven by new technologies, but rather by technology ecosystems. Third,
by defining ecosystems’ determinants that influence technology substitutions in the global
logistics industry, this paper not only expands ecosystem literature, but contributes to an
understanding for logistics managers and academics to better predict disruptive transitions
and develop strategies to allocate resources for R&D investments either in new technologies
or old technologies.
The global logistics industry has been chosen for three reasons, namely, first, innovations
and the technology transitions in the global logistics industry can be regarded as a major driver
of “globalization” and today’s complex supply chains
(Rodrigue, 2016), thus the logistics
industry provides a rich source of different ecosystems and technological innovations that can
be investigated. Second, the global logistics industry is challenged by digitalization and start-
ups with potential disruptive technologies (Bharadwaj et al., 2013; Cichosz et al., 2020; Hooper
and Holtbrügge, 2020; Sandström et al.,2009; Sucky and Asdecker, 2019; Tsiulin et al., 2020). In
the past decade, investments in logistics start-ups are constantly growing with around US
$3.5bn in 2017 alone (Oliver Wyman, 2017), thus a better understanding of sustained or
disruptive technologies may help companies to determine what strategies can be pursued to
manage ecosystem interdependenci es (Kapoor and McGrath, 2014). Third, the global logistics
industry can be regarded as truly global, thus the innovations and technology substitutions are
not geographically restricted and are subsequently disseminated on a global scale.
The remainder of the paper is structured as follows: The next chapter introduces the
notion of disruptive technologies and the role of ecosystems with the two dimensions that
are used to classify the pace of technology substitution. The following chapter build for
categories of the pace of technology substitution and classifies specific logistics technology
ecosystems along the pre-defined dimensions. This is followed by abstraction of the findings
from the classification to further define determinants of technology substitution to link them
to disruption innovation theory, thus extending the framework by integrating ecosystems as
a crucial element to predict disruptive or sustaining innovations.
Technology
transitions
2. The role of ecosystems in disruptive technology transitions
2.1 Disruptive technologies
The concept of technology substitution through either sustained or disruptive innovations
has become increasingly prominent in academia and practice
(Adner, 2002; Ansari et al.,
2016; Christensen et al., 2011; Christensen et al.,2015; Hang et al.,2015; Hüsig et al., 2005;
Ozalp et al., 2018; Sampere, 2016). Generally, to better understand the threat of substitution
through a new technology, scholars use the concept of the S-curve to explain the competition
between technologies (Christensen, 1997; Foster, 1986; Utterback, 1994). The S-curve
suggests that the performance of a new technology is relatively low in the early stages, but
with a better understanding of the technology over time, the rate of progress increases. In
the case of two competing technologies, Foster (1986) argues that as soon as the new
technology has a superior performance compared to the old technology, the new S-curve
crosses the old S-curve and the substitution threat from the new technology becomes salient.
Rogers (2003) “attributes of innovation framework” is another prominent concept that is
frequently used to describe the diffusion of innovation and how technology substitution can
occur. In contrast to the S-curve, which focuses on the supply side, Rogers (2003) framework
focuses on the demand-side and specifically lists the factors that determine the rate of
market adoption. The factors are built around how the new technology interacts with its
users and considers the social context, which results in five attributes (relative advantage;
compatibility; complexity; trialability; observability) that determine the market adoption of
the new technology. However, while both the S-curve and Rogers (2003) framework explain
how technology substitution can occur, they both fall short to distinguish between sustained
and disruptive technologies.
To examine the difference between sustained and disruptive technology substitutions,
scholars frequently refer to the seminal work of
Christensen (1997), who distinguishes
between “sustaining” and “disruptive” technologies and innovations (Table 1). “Sustained”
innovations are characterized by improving products with incremental advances or major
breakthroughs, thus leading to an increase in sales of the incumbents’ product to most
profitable customers (Christensen et al.,2015). For example, the introduction of warehouse
management systems has led to processes that made warehouses activities faster for people
to perform and has generated efficiencies to reduce labor-intensiveness (Lee et al.,2018;
Wang et al., 2010), allowing companies to offer a discounted, and thus, more competitive
price. In other words, sustaining technologies improve already existing and established
services in the mainstream market (Sandström et al., 2009).
Disruptive technologies, in contrast, are initially underperforming along the dimension of
mainstream customer demand and are regarded substandard by the majority of the incumbents’
clients
(Christense n et al.,2015). This low performance generates a market that is characterized by
uncertainty, thus incumbent companies find it unreasonable to “ditch” their profitable clients for
a newly established, but smaller market with an inferior technology (Sandström et al.,2009). Only
when the performance and the quality of the disruptive technology rises, existing incumbents’
customers are willing to abandon the sustaining technology and adopt the new technology. An
example for disruptive innovation is the three-dimensional printing technology, which has the
potential to disrupt existing global supply chains, but is still struggling with consumer
acceptance (Boo n and Van Wee, 2018; Halassi et al.,2019; Sasson and Johnson, 2016).
2.2 The role of ecosystems
The main argument behind the importance of ecosystems with regard to disruptive
technologies is that innovation – which is crucial for a companies’ survival – cannot be
attributed a com pany single processes, but rather to complex proce sses involving cooperative
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