callon 1995 technological competition and strategies of firms

8/12/2019 Callon 1995 Technological Competition and Strategies of Firms

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r e s e r c hp o l i c yL S V I R Research Policy 24 (1995) 441-458

T e c h n o l o g i c a l c o m p e t i t i o n s t r a t e g ie s o f t h e f ir m s an d t h e c h o i c eo f t h e f i r s t u s e r s : t h e c a s e o f r o a d g u i d a n c e t e c h n o l o g i e s

V . M a n g e m a t i n a M . C a l lo n bINRA / SERD, Universit~ Pierre Mend~s France, BP 47X, 38040 Grenoble C~dex 9, France

b CSI-ENSMP, 62 boulevard Saint Michel, 75272 Paris C~dex 06, FranceFinal version received December 1993

A b s t r a c t

Based on an in-depth study of two different road guidance technologies, both under increasing returns toadoption, this paper is an attempt to elucidate the strategic game played by the producers and the first users beforethe introduction of the technologies onto the market. It shows that it is possible to endogenize the decisions made bythe first users (who are chosen by the supplier) as much as those of the suppliers when they choose the first users.When identifying first users, firms evaluate their capacity to influence other potential adopters, a capacity whichdepends on their position in the social networks to which they belong. In order to enrol the first users, the producersof a technology develop various strategies, including standardization in voluntary standardization committees,pre-announcement, scientific legitimizing and even technological transformation of the product itself. Indeed, thefirst users who seem strategically vital by the sponsor of the first system are not necessarily the same as thosetargeted by the sponsors of the second technology. Thus, the degree of substitutability itself appears as anendogenous variable. This analysis provides a new basis for understanding technological competition and completeseconomic modelling of the competition.

I I n t r o d u c t i o n

The objective of this paper is to elucidate thestrategic game played between manufacturingfirms and first users in a technological competi-tion. We focus on the early stage of the processand emphasize the importance of the transforma-tion of the technology.

Economic competition is increasingly becom-ing a matter of rivalry between technologieswhich, although different in themselves, are sub-

* Corresponding author.

stitutable alternatives and are thus directed tothe same markets and end users. The causes ofsuch an evolution are num erous and varied. Thosemost immediately apparent relate to an innova-tive surge st imulated by increas ing R & D activity,but there is also significant change on the de-mand side, with heavy emphasis on the notion ofservice provid ed-- whi ch can be offered in severalways--as opposed to intrinsic product quality.Technological competition is thus likely to be-come one of the main features of the economicstruggle between businesses and nations.

In recent years, most of the economists whohave focused their attention on the technological

0048-7333/95/ 09.50 1995 Elsevier Science B.V. All rights reservedSSDI 0048-7333(93)00776-P


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442 v. Mangematin, M. Callon Research Policy 24 1995) 441-458c o m p e t i t i o n i s s u e h a v e c o n s i d e r e d t w o a s p e c t s ;t h e i r r e v e r s i b i l i t y f a c t o r a n d t h e v a r i e t y f a c t o r , tw h i c h a r e s t r o n g l y l i n k e d .

I r r e v e r s i b i l i ty c o r r e s p o n d s t o s i t u a t i o n i n w h i c hi t b e c o m e s i n c r e a s i n g l y d i f f i c u l t , w i t h t h e p a s s a g eo f ti m e , t o r e - a p p r a i s e a n d p u r s u e t e c h n o l o g i c a lo p t i o n s w h i c h w e r e e a r l i e r g i v e n u p a n d s h e lv e d .F o r e x a m p l e , t h e i n v e s t m e n t c o m m i t t e d t o d e v e l -o p i n g I C - p o w e r e d r o a d v e h i c l e s h a s g r a d u a l l yp r e c l u d e d a n y s t r a te g y o t h e r t h a n t h a t i s p u r s u i n gf u r t h e r d e v e l o p m e n t in th e s a m e d i re c t io n . 2 T h ec o n c e p t o f ' p a t h d e p e n d e n c y ' i s u s e d t o c h a r a c -t e r i z e t h i s p r o c e s s i n w h i c h f u t u r e d e c i s i o n s a r es u b s t a n ti a l ly p r e - e m p t e d b y p a s t a n d c u r r e n t o p -t i o n s . T h e v a r i e t y f a c t o r , f o r i t s p a r t , r e f e r s t o t h eg r e a t e r o r s m a l l e r r a n g e o f t e c h n o l o g i e s c o m p e t -i n g a g a i n s t e a c h o t h e r a t a g i v e n t i m e a n d s t i l lr e t a i n i n g a r e a s o n a b l e c h a n c e o f r e m a i n i n g c o m -p e t it i ve . I n a p r o c e s s o f c o m p e t i t i o n a m o n g s t Nt e c h n ol o g ie s T t , T 2 , . . . , T N , t h e o u t c o m e m a y b et h e t o t a l t r i u m p h o f o n e o v e r a ll th e o t h e r s , t h ec o n t i n u i n g p r e s e n c e o f a s m a l l n u m b e r o f t h e m ,o r t h e s u r v i v a l o f a l l , w i t h a m o r e o r l e s s e q u i -t a b l e s h a r i n g o f th e m a r k e t .

W h e n d e s c r i b i n g t h e i r re v e r s i b i l it y p r o c e s s ,s o m e e c o n o m i s t s u se t h e c o n c e p t o f ' i n c r e a s i n gr e t u r n s t o a d o p t i o n ' ( I R A ) , c o r r e s p o n d i n g t o ac h a i n o f d e v e l o p m e n t w h e r e b y a s y s t e m o r a r t e -f a c t b e c o m e s i n c r e a s i n g l y m o r e a t t r a c t i v e t o p o -t e n t i a l u s e r s a n d i t s g e n e r a l i z a t i o n i n c r e a s i n g l yb e n e f i c i a l t o t h e m . T h e t e c h n o l o g y i n v o l v e d ,w h e t h e r b e c a u s e o f i ts in h e r e n t c h a r a c t e r i st i c s o ro f th o s e i t m a y h a v e a c q u i r e d i n t h e c o u r s e o fd e v e l o p m e n t , i s c e n t r a l t o t h i s p r o c e s s o f e n -h a n c e m e n t . T e c h n o l o g y i s a t th e h e a r t o f e a c h o ft h e s e s o u r c e s o f i n c r e a s in g r e t u r n s , p r o v i d in g n e t -w o r k e x t e r n a l i t i e s , g i v in g r i s e to r e l a t e d d e v e l o p -m e n t s a n d o p p o r t u n i t i e s f o r e c o n o m i e s o f s c a le ,a n d a b o v e a l l, b e i n g i n s e p a r a b l e f r o m t h e l e a r n -

i n g p r o c e s s . 3 I t s h o u l d b e a d d e d t h a t t e c h n i c a ls t a n d a r d i z a t i o n p l a y s a c e n t r a l r o l e i n t h e a b i l i t yo f a t e c h n o l o g y t o g e n e r a t e s u c h i n c r e a s i n g r e -t u rn s . T h e c o n c e p t o f a te c h n o l o g i c a l n e t w o r k 4p r e s u p p o s e s t h e e x i s t en c e o f r e c o g n i s e d s t a n -d a r d s w h i c h a l l o w i n t e r c o n n e c t i o n b e t w e e n c o m -p l e m e n t a r y s y s t e m s o f d i f f e r e n t o r i g i n s . S im i l a r ly ,t h e a s s i m i l a t i o n p r o c e s s a n d o p p o r t u n i t i e s f o re c o n o m i e s o f s c a le i m p l y s o m e d e g r e e o f p e r m a -n e n c y o f t e c h n i c a l s p e c i f ic a t i o n s i f t h e a c c u m u l a -t io n a n d t r a n s p o s i t io n o f k n o w l e d g e a n d k n o w -h o w a r e t o r e m a i n p r a c t i c a b l e . T h e i r r e v e r s i b i l i t yo f a t e c h n o l o g i c a l t r e n d , d e p e n d i n g o n i ts a b i l it yt o g e n e r a t e ' i n c r e a s i n g r e t u r n s t o a d o p t i o n ' , t h u sa l s o d e p e n d s o n t h e s t a n d a r d i z a t i o n p o l i c i e s i m -p l e m e n t e d b y a ll t h e p a r t i e s i n vo l v ed .

T h e v a r i e t y o f ch o i c e, f o r i t s p a r t , d e p e n d sb o t h o n d e s i g n p r o c e s s ( g e n e r a t i n g a s m a l l e r o rl a r g e r n u m b e r o f v a r i a t i o n s a n d i n t r o d u c i n g al a r g e r o r s m a l l e r n u m b e r o f t e c h n o l o g i e s( T 1, T 2 , T 3 . . . ) w h i c h w i ll b e c o m p e t i n g a g a i n s te a c h o t h e r ) a n d o n t h e c o n d u c t o f t h e t e c h n o l o g i -c a l c o m p e t i t i o n p r o p e r l y , w h i c h m a y i n s o m e c i r -c u m s t a n c e s l e a d t o t h e e l i m i n a t i o n o f o n e o rm o r e o f th e a l t e r n a t iv e s . E c o n o m i s t s h a v e g e n e r -a l ly n e g l e c t e d t h e d e s i g n f a c t o r i n o r d e r t o c o n -c e n t r a t e o n t h e c o m p e t i t i o n a s p e c t a n d t h ec h a n c e s o f s u r v iv a l o f t h e r e s p e c t i v e t e c h n o l o g i e s .N o t w i t h s t a n d i n g t h e a p p a r e n t p l e t h o r a o f i n t e r -p r e t a t i o n s p u t f o r w a r d , o n e s a l i e n t p o i n t h a se m e r g e d . I t c o n c e r n s t h e c r u c i a l ro l e p l a y e d b yt h e f i r s t u s e r s . T h u s , t h e r e c r u i t i n g o f t h e f i r s tu s e r s i s s e e n t o b e t h e d e c i s i v e p o i n t i n t h ep r o c e s s o f t e c h n o l o g ic a l c o m p e t i t io n . T h e e a r l yh i st o ry o f m a r k e t s h a r e s - - i n p a r t t h e c o n s e -q u e n c e o f ' s m a l l e v e n t s ' a n d c h a n c e c i r c u m -s t a n c e s - c a n d e t e r m i n e w h ic h s o lu t io n p r e v a il s( A r t h u r , 1 9 8 8b ) . T h e i m p a c t o f t h e i r c h o i c e i sd i r e c t l y r e l a t e d t o t h e c o n s t i t u t i o n o f ' i n c r e a s i n g

1 The analysis and interpretation herein owe m uch to thework of D . Foray and its decisive contribution towards clarify-ing a random wealth of literature to identify profitable av-enues of research.2 We previously reported the extent of capital investmentneeded to revive the pro spects of the electric car which, at thestart of the century, seemed destined to have the sa m e successas its pe trol-drive n rival (Ca llon, 1980).

3 The informational increasing returns factor is the onlyone o f these sources which seems to be relatively independentof technological influences, bein g tied specifically o the pro-cess of d iffusion as such.4 Following David's c haracterization, we ca n de fin e net-work technologies by two m ain features, tech nical interrelat-edness and network integration benefits (Kindelberger, 1983;Dav id, 1987).


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V. Mangematin, M. Callon / Research Policy 24 1995) 441-4 58 443r e t u r n s t o a d o p t i o n . C o n s i d e r , a s a n e x a m p l e ,t h e c a s e w h e r e t w o t e c h n o l o g i e s , T 1 a n d T 2 , a r ec o m p e t i n g f o r a d o p t i o n b y t he s a m e t a r g e t p o p u -l a t io n . I f t h e f i rs t u s e r s l a r g e l y c h o o s e T 1 i np r e f e r e n c e t o T 2 , t h e n e x t w a v e o f u s e r s w il l b ei n c l i n e d t o f o l l o w s u i t a n d T 2 w i ll g r a d u a l l y b ed r i v e n o u t t h e m a r k e t . 5 A t t h e b e g i n n i n g o f th ep r o c e s s , n o t e c h n o l o g y h a s a g r e a t e r c h a n c e o fb e i n g a d o p t e d t h a n a n y o t h e r . B y t h e f a c t o fp r e f e r r i n g o n e o f t h e a l t e r n a t i v e s , t h e f i r s t u s e r ss e t o f f a tr a i n o f i n c re a s i n g r e t u r n s w h i c h t h e nf o c u s e s o n t h a t p a r t i c u l a r t e c h n o l o g y , w h i c h t h u sg a i n a n a d v a n t a g e o v e r i ts ri va ls . W h e n t h e e x t e n to f a d o p t i o n i s g r o w i n g , t h e p r a c t i c a l u t i l i t y a n da t t r a c t iv e n e s s o f t h a t t e c h n o l o g y a r e e n h a n c e d ,m o r e a n d m o r e f a c i l i t i e s a r e s e t u p , a n d t h en u m b e r o f u s e r s in c r e a s e s i r re s i st i b ly . I n th e s em o d e l s , u s e r s a r e d i f f e r e n t i a t e d s o le l y i n t e r m s o ft h e i r r e l a ti v e p r e f e r e n c e ( f o r o n e o f t h e t e c h n o l o -g ie s ), a n d w h a t d e t e r m i n e s t h e o u t c o m e o f t h ec o m p e t i t i o n s t r u g g l e i s n o t h i n g m o r e t h a n t h eo r d e r i n w h i c h t h e p r o p o n e n t s a r r i v e a t t h e p o i n to f c h o o s in g . D u e s o l e ly t o t h e i n c r e a s i n g r e t u r n s( w h e t h e r o n a c c o u n t o f t h e n e t w o r k e x t e rn a l it i es ,t h e l e a r n i n g p r o c e s s , o r t h e i n t e r r e l a t e d n e s s f a c -t o r ) , t h e i n i ti a l r a n g e o f o p t i o n s g r a d u a l l y n a r -r o w s , w i t h o u t t h e p r i m a f a c i e i n d i c a t i o n a s t ow h i c h t e c h n o l o g y w i ll g a i n t h e u p p e r h a n d . 6E v e n t h o u g h , i n t h e s e m o d e l s , t h e o u t c o m e o ft h e c o m p e t i t i o n i s t o a g r e a t e x t e n t d e t e r m i n e db y t h e f i r s t u s e r s , o t h e r f a c t o r s s u c h a s i n t e r d e -p e n d e n t n e t w o r k s l i n k i n g p o t e n t i a l u s e r s a n ds u p p l y - si d e s t r a t e g i e s f o r m a k i n g s y s t e m s c o m p a t -i b l e c a n s t i l l p l a y a p r o m i n e n t p a r t .

5 Here, we are referring only to the general principle. Themathem atical models used to investigate this process of elimi-nation are very simple. They show how and why several statesof equilibrium may be reached.6 Total elimination obviously occu rs only whe n the rivaltechnologies are all aim ed at the s am e population of users.The continuing differentiation of technology is a m atter ofsocial structure, depending in particular on the networks ofinterdependence linking group s of potential users. Furtherreference w ill made to th is point whe n we c om e to ourconclusions. It a lso depends o n the extent of coordinationbetween systems suppliers, who may achiev e compatibili tybetween initially incomp atible systems (this pa rticular ap pliesto network systems). (Gabel, 1987a; Berg, 1988, 1989).

G i v e n t h e i m p a c t o f t h e c h o i c e s m a d e b y t h ef i r st u s e r s , i t is w o r t h w h i l e f o c u s i n g t h e a n a l y s i so n t h e p r o c e s s o f t h e i r s e l e c ti o n . I n s o m e v e r ys i m p l e m o d e l s ( A r t h u r , 1 9 89 ) , t h e s e l e c t i o n o f t h ef i r s t u s e r s i s c o n s i d e r e d a s b e i n g r a n d o m n o t s om u c h b e c a u s e i t c a n n o t b e e x p l a i n e d ( a c a u s a la n a l y s i s o f i t s o c c u r r e n c e i s n o t e x c l u d e d ) , b u tr a t h e r b e c a u s e i t i s o u t s i d e t h e m o d e l . T h i sh y p o t h e s i s i s h a r d l y c o n v i n c i n g . H o w e v e r , i n h a r -m o n y w it h t h o s e m o d e l s ( F a r r e l l a n d S a l o n e r ,1 9 8 5, 1 9 8 6; K a t z a n d S h a p i r o , 1 9 8 5 , 1 9 8 6 ) w h i c he n d o w e c o n o m i c a g e n t s w i t h s t r a t e g i c c o m p e t e n -c i e s, w e w i ll a s s u m e t h a t t h e d e c i s i o n s a b o u t t h ef ir s t u s e r s a n d c o n s e q u e n t l y t h e c h o i c e s t h ey m a k ec a n n o t b e c o n s i d e r e d a s e x o g e n o u s va r i a b le s . A ss h o w n b y o u r i n - d e p t h c a s e s tu d y , t h e c h o i c e s o ft h e f ir s t u s e r s a r e t h e m s e l v e s s e l e c t e d ( n o t a b l y b yt h e p u r v e y o r s o f t e c h n o l o g i c a l s y s t e m s ) j u s t a sm u c h a s , i f n o t m o r e t h a n , t h e c h a n c e t h a t t h e ym i g h t c h o o s e o n e o f t h e r i v a l s y s t e m s : th e c h o i c eo f w h o a r e t h e f i r st u s e rs d e p e n d s h e a v i ly o ne x p e c t a t i o n s a b o u t t h e c h o i c e s t h e y a r e s u p p o s e dt o m a k e . F u r t h e r m o r e , w e w il l s u g g e s t t h a t t h es e l e c t i o n o f f i r s t u s e r s i s s t r o n g l y a s s o c i a t e d w i t ht h e t e c h n o l o g i c a l c h o i c e s t h e m s e l v e s . M o r e o v e r ,f a r f r o m b e i n g d e f i n e d o n c e a n d f o r a ll ( e x c e p tf o r e f f o r t s a t c o m p a t i b i l i t y ) a t t h e b e g i n n i n g o ft h e c o m p e t i t i v e p r o c e s s, t e c h n o l o g i c a l s y s t e m s a r es u b j e c t t o m a r g i n a l o r p r o f o u n d t r a n s f o r m a t i o n s ,t o w h i c h t h e f i r s t u s e r s m a k e a n e s s e n t i a l c o n t r i -b u t i o n . W e s h a l l a l s o s e e t h a t t h e c h a r a c t e r i s t i c so f t h e s y s t e m s w h i c h d e t e r m i n e w h i c h s o u r c e s o fi n c r e a s i n g r e t u r n s w i l l b e m o s t a c t i v e a r e , t o al a r g e e x te n t , m a n i p u l a t e d b y t h e p a r t i c i p a n t s , a n dt h a t r i v a l t e c h n o l o g i e s g e n e r a t e n e t w o r k c o n -s t r a i n t s o r , a l t e r n a t i v e l y , t e c h n o l o g i c a l c o m p a t i -b i li ti e s o r e c o n o m i e s o f s c a le , d e p e n d i n g o ns t r a te g i c o p t i o n s p a r t l y d i c t a t e d b y c o m p e t i n gs u p p l i e r s . I t w il l a l s o b e s e e n t h a t t h e c h o i c e o ft h e f i r st u s e r s b y r e f e r e n c e t o t h e i r r e p r e s e n t a t i v -i ty ( m e a n i n g t h e l i k e l i h o o d o f t h e i r d e c i s i o n s b e -i ng i m i t a t e d b y o t h e r p o t e n t i a l u s e r s ) c a n h a v e ad e c is i ve in f l u e n c e o n t h e c o n d u c t a n d o u t c o m e o ft h e c o m p e t i t i v e s t r u g g l e .

I n o u r a n a l y s is o f t h e c h o i c e o f t h e f i r s t u s e r sa n d o f it s c o n s e q u e n c e s o n t h e d y n a m i c s o f t e c h -n o l o g i c a l c o m p e t i t i o n , w e s h a l l r e f e r t o t h e m o s tr e c e n t f i n d i n g s i n t h e f i e l d s o f s o c i o l o g y a n d t h e


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444 v. Man gemat in, M. C al lon / Research Pol icy 24 1995) 441-458h i s t o r y o f t e c h n o l o g y w h i c h e x p l a i n h o w a t e c h n i -c a l a r t e f a c t t a k e s s h a p e a n d e m e r g e s . T h e d e s i g no f t h e s e a r t e f a c t s c a n n o t b e s e e n s e p a r a t e l y f r o mt h e c o n s t i t u t i o n o f t h e i r t a r g e t a r e a . W e a l s o c a llo n t h e s o c i o l o g y o f s c ie n c e a n d t e c h n o l o g y f o r am e t h o d i c a l a p p r o a c h t h a t is f u n d a m e n t a l t o o u rp u r p o s e : w h e n a t t e m p t i n g t o i d e n t i f y d e s i g ns t r a t e g i e s w h i c h l e a d t o e i t h e r f a i l u r e o r s u c c e s s,i t i s a p p r o p r i a t e t o c o n s i d e r s y s t em s w h o s e f a t e i sn o t y e t d e c id e d , s o th a t t h e o b s e r v e r s u f f e r s f r o mt h e s a m e u n c e r t a i n t i e s a s th e p a r t i c i p a n t s .

O u r a n a l y s i s c o n s i d e r s t w o r o a d g u i d a n c e s y s -t e m s - - A l i s c o u t a n d C a r m i n a t - - d e s i g n e d a n d d e -v e l o p e d b y t w o c o m p e t i n g E u r o p e a n f ir m s . T h e i rp u r p o s e i s t o a s s i s t c a r d r i v e r s i n t h e i r c h o i c e o fi t i n e r a r i e s f o r g o i n g f r o m A t o B , p r o v i d i n g c o n -s t a n t l y u p d a t e d r e p o r t s o f t r a f f i c c o n d i t i o n sa h e a d , a n d m a k i n g i t p o s s i b l e t o a v o i d t r a f f i cj a m s a n d o t h e r i m p e d i m e n t s . T h e d a t a w e r e c o l -l e c t e d d u r i n g 1 9 8 9 a n d 1 9 9 0 o n t h e b a s i s o fn o n - d i r e c t i v e i n t e r v i e w s a n d w i t h t h e a i d o f an u m b e r o f d o c u m e n t a r y r e c o r d s . 7 S e c t i o n 2 c o n -s i st s o f a d e s c r i p t i o n o f t h e g u i d a n c e s y s t e m sc o n c e r n e d . W e e x a m i n e t h e d e v e l o p m e n t s t r a t e -g ie s o f b o t h t h e S i e m e n s C o m p a n y a n d t h eC a r m i n a t C o n s o r t i u m , w h o a r e s e e k i n g t o e s t a b -l is h th e i r r e s p e c t i v e s y s t e m s i n F r a n c e . S e c t i o n 3i s d e v o t e d t o t h e f i r s t s t a g e s o f t h e c o m p e t i t i v es t r u g g l e b e t w e e n t h e t w o s y s t e m s . I t a n a l y s e s t h es t r a t e g i e s u s e d t o d e t e r m i n e a n d t o a t t r a c t t h ef i rs t u se r s a n d t h e i r e f f e c t s o n t h e n a t u r e o f t h ec o m p e t i t i o n . I n S e c t i o n 4 , w e a p p l y s o m e o f th ec a s e s t u d y f i n d i n g s t o a t t e m p t t o i d e n t i f y t h eh y p o t h e s e s w h i c h n e e d t o b e a d j u s t e d a n d t h en e w f a c t o r s t h a t s h o u l d b e i n t r o d u c e d t o m a k et h e e x i s t i n g m o d e l s m o r e r e a l is t ic .

2 Tw o system s to avoid traff ic cong est ion

H e n c e , e f f o r t s m u s t b e c o n c e n t r a t e d o n r e d u c i n gt h e n e g a t i v e e f f e c t s o f t hi s i n c r e a se . R o a d s c a n -n o t b e e n l a r g e d a n d n e w o n e s c a n n o t b e b u i l tw i t h o u t p r o h i b i t i v e e n v i r o n m e n t a l a n d f i n a n c i a lc o s ts . O n e s o l u t i o n i s t h e b e t t e r u s e o f e x i s ti n gr e s o u r c e s . T e l e c o m m u n i c a t i o n s a n d e l e c t r o n i ct e c h n o l o g i e s m a y o f f e r m a n y p o s s i b i l i t i e s .

I n F r a n c e , t w o s y st e m s , A l i s c o u t a n d C a r m i -n a t , a r e c o m p e t i n g . 9 E a c h s y s t e m is d e s ig n e d f o rt h e d r i v e r w h o w i s h e s t o d r i v e f r o m A t o Ba v o i d i n g a ll t r a f f i c j a m s . A l i s c o u t a n d C a r m i n a ta r e b o t h b a s e d o n t h e s a m e p r i n c i p l e : t h a n k s t o ab r o a d c a s t o f u p - d a t e d t r a ff i c i n f o r m a t i o n , c o n g e s -t io n c a n b e a v o i d e d . A b r i e f d e s c r i p t i o n o f t h et e c h n o l o g i e s c a n p r o v i d e s o m e u n d e r s t a n d i n g o ft h e n a t u r e o f t h e c o m p e t i t i o n a n d e n a b l e u s toa n a l y s e t h e s o c i o - t e c h n o l o g i c a l s t r a t e g i e s o f th ef i r ms , i n v o l v e d .2 .1 . A l i s c o u t s y s t e m lo : C o u n t t h e v e h i c l e s to f o r e -c a s t c o n g e s t i o n

T h e o p e r a t i o n a l p r i n c i p le o f A l is c o u t i s q u i t es i m p l e . W h e n a v e h i c l e p a s s e s t h r o u g h a t r a f f i cl i g ht o r o v e r a c r o s s r o a d , i t i s c o u n t e d b y b e a c o n si n s t a l le d o n t h e t r a f f i c l ig h t s. E a c h b e a c o n i sc o n n e c t e d t o a c e n t r a l s y s t e m w h i ch is p r o v i d e dw i t h o t h e r r e l e v a n t i n f o r m a t i o n a n d c a n g i v ed r i v e r s a d v i c e a b o u t h o w t o a v o i d t r a f f i c c o n g e s -t ion .

A l i s c o u t is a t ra f f ic m a n a g e m e n t a n d g u i d a n c es y s t e m w h i c h i n d i c a te s t o t h e d r i v e r t h e b e s t w a yt o go f r o m o n e p l a c e to a n o t h e r . O n - b o a r d e q u i p -m e n t c o n s is t s o f a s m a l l c o m p u t e r c o n n e c t e d t ob e a c o n s b y i n f r a r e d l in k s. T h i s s y s t e m i s b a s e d o nu p - t o - d a t e i n f o r m a t i o n a b o u t t r a f f i c , a c c i d e n t s ,w e a t h e r a n d t r a v e l t im e . I t is a n a u t o - r e g u l a t e ds y s t e m . B a s i c a l l y , d r i v e r s e n t e r t h e i r d e s t i n a t i o nv i a a k e y b o a r d . A t e a c h e q u i p p e d c r o s s r o a d , b e a -

F o r o v e r 1 0 y e a r s , 8 r o a d t r a f f i c h a s b e e n i n -c r e a s i n g i n v o l u m e i n w e s t e r n E u r o p e . H o w e v e r ,r o a d n e t w o r k s c a n n o t e x p a n d a t t h e s a m e ra t e .

7 Survey conducted by V . M angema tin.

8 Of co urse, the traffic has bee n increasing in volume sincethe beginning of the century, but the problems of trafficcongestion have m ainly developed since the 1980s.9 In this paper we use the following conventions: localisa-tion is to locate a position on a map ; dynam ic guidancemean s to pro vide all the necessary information to go frompoint A to p oint B avoiding all traffic jams.10 TR RL , 1988.


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v. Mangematin, M. Callon / Research Policy 24 1995) 441-45 8 445cons emit and receive infrared signals. The bea-cons transmit the local electronic map which in-cludes all the traffic information. The on-boardsystem translates the received message and indi-cates via arrows the direction the driver shouldfollow. This advice can be visual or vocal. Eachtime a vehicle passes through a beacon, it emitsan infrared signal which allows the central systemto compute and calculate the time taken thevehicle to travel between two beacons. Thesedata provide information to drivers.

Aliscout is a network technology. Based onbeacon/vehicle dialogue, via an infrared link, itrequires a minimum number of users. Indeed,collection of information is based on a census ofall suitably equipped vehicles. The larger thenumber of such vehicles, the more accurate themeasurements and the more useful the informa-tion given to drivers. Aliscout requires investmentfrom public agencies or network operators. Bea-con installation is one part of this investment.Conception, design and the realisation of thesoftware for traffic management demand largestudies and software development for each town.Technical interrelatedness is strong, especially fortraffic management infrastructures. For example,compatibility with light regulation and road pric-ing is necessary. Nevertheless, in Berlin and Lon-don, only location has been tested. This applica-tion is a small part of the system, but largenumbers of equipped vehicles are not required.In this system, information is exogenous, updatedonce a day, but for dynamic guidance applica-tions, network externalities are fundamental.

In fact, there are two steps in the adoption ofAliscout. First, Aliscout promoters have to con-vince public authorities or network operators ofthe efficiency of the system and of its economicprofitability to encourage them to invest in theinfrastructure. Second, firms which support thesystem have to create an installed base (Farrelland Saloner, 1986) which is as large as possible.Increasing returns are very important, as theyquickly initiate irreversibility. If large towns inEurope adopt Aliscout, then Carminat, the alter-native system, will not be able to prevail. Other-wise, public agencies, network operators and pri-vate users would be 'angry orphans'. It would be

very unexpected and quite unbelievable that pub-lic administrations or network operators wouldaccept such a situation. Actually, the system ispath-dependent. Lock-in phenomena quickly ap-pear, creating irreversibility.

In this case, the technical competition is clearlylocated at the beginning of the process. The mainobjectives for Siemens (who developed Aliscout)are to create installed bases and to reach thecritical number of users to initiate increasingreturns. An economic model provides us with agood framework for analysis, but it does not sayanything about the beginning of the process. It isreally difficult to imagine that firms such asSiemens or Renault would accept the issue assimply a matter of chance and would not try toinfluence that 'chance'. After a short presenta-tion of the Carminat system, we will analyse thestrategies of the companies.2 . 2 . C a r m i n a t s y s t e m 1 1

The Carminat project t2 is the result of thefusion of three R D projects, Carin (car infor-mation and navigation) promoted by Philips,Minerve (intelligent media for road guidance)supported by Sagem, and Atlas sponsored byRenaul t and TDF. Since June 1986, five partners(Philips NL, Philips France, Renault, Sagem andTDF) have been developing the Carminat systemwith the support of the French and Dutch min-istries of transportation.

Unlike the Aliscout system, Carminat is notbased on a census of vehicles. It is a system basedmainly inside the vehicle. Technically, informa-tion for vehicle guidance can be divided intothree parts:

internal information, with a localization sys-tem;--on-board memory, i.e. a computer with asub-system for navigation-location;

up-to-date information, received via an RDSchannel.Carminat is based on a modular architecture tak-

i1 Renault, 1990a.12 Renault, 1990b.


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446 V. Mangematin, M. Callon Research Policy 24 1995) 441-458ing account of future developments and addedfunctions.

Geographic electronic data bases are stored onCD-Rom. An on-board vehicle system providesthe location of the vehicle in terms of longitudeand latitude. As soon as the computer gets all thedata, it displays the map which covers the regionaround the car. The driver can always find hisposition on the map. However, the geographicdata bases are not often up-dated. A radio datasystem RDS), which is an added signal on an FMchannel, provides up-to-date information abouttraffic, accidents, road works, etc. This informa-tion is displayed on a screen on the electronicmap, so that the driver can choose his routehaving all the information about possible alterna-tives.Carminat is based on up-to-date road informa-tion received via an RDS channel. This informa-tion is generally accessible and pre-exists the sys-tem. It comes from either public agencies orprivate operators. Indeed, the Carminat system isnot a dialogue beacon/ vehic le based system but abroadcasting technology. In that way, the numberof users is not as important as it is for Aliscout.This is not stated as a technical comment, butbecause from an economic point of view it is acritical point, especially if costly private broad-casting and collection of information is required.However, this is a network technology, and tech-nical interrelatedness arises in a number of con-nections with technologies such as road pricing,paging and dynamic tolls. Network externalitieshave a weakening ef fect on the system as a whole.This is essentially an on-board system. Location,dynamic guidance and internal functions are in-terrelated and linked with all the other vehiclefunctions. Taken as a whole, Carminat is notsubject to increasing returns, but the competitionwith Aliscout obliges Carminat promoters to takeaccount of network externalities and increasingreturns. In fact, as Aliscout is path dependent, alock-in situation can create irreversibility. So,conditions of competition have changed forCarminat since it has been competing withSiemens.Carminat and Aliscout are two network tech-nologies, subject to network externalities and in-

creasing returns. The phase of development isplaying an important part in the competition.Firms try to develop strategies to influence theearly stages of the competition when the productsare not yet on the market. We have to integratethis in the same model. We cannot separate pre-announcement, anticipation and gateways tech-nology or circumvent the network externalitiesand public decisions.

3 F i r m s s t r a t eg i e s : T h e c h o i c e o f t h e f i rs t u s e r sw h o s u p p o r t t h e t e c h n o l o g y

The strategies followed by each firm dependon the mode of the development of the technol-ogy. While Siemens developed the technologywith inside resources and then tried to get itsproduct adopted, the Carminat consortium haveincluded all the partners needed to market itsproduct since the design phase.3 1 Siemens: Ma inly a ma rke ting strategy

Siemens attempted to market a fully devel-oped product, which requires both public invest-ment and private purchase, when the technologyhad not yet been tested. Public investment wasneeded to test the product, but public authoritiescannot waste public funds on a non-workingproduct. How did Siemens managed to get out ofthis vicious circle?3 1 1 The role of the installed base

Aliscout technology requires investment in in-frastructure and software to manage traffic. Thefirst challenge for Siemens was to convince publicauthorities to test its system. Testing means in-vesting in beacon installation and in softwaredevelopment, although Siemens could not giveany guarantee on the workability of the system.The Berlin experiment 13 seems to have been apolitical decision at first. Indeed, the Berlin Sen-ate and the German transportation ministry had

13 Ano nymou s 1989.


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F.. Mange matin, M . Callon / Research Policy 24 1995) 441- 45 8 4 4 7been supporting the project since its debut. Wecan assume it seemed normal to give Siemens asite for an experimental trial.

With the assistance of the public authorities,Siemens installed an experimental system inBerlin. The effects of this experiment can beanalysed at several levels. The first and mostimpor tant consequence is the creation of a fact .The Berlin experiment transforms a project onpaper a plan, into reality, into a tangible fact. Itleads from an intangible project to a tangibleexperience. Consequences vis-a-vis other partnerscould be important even if the Berlin experiment,like that in London (Belcher and Catling, 1988),provided only a test of location, the number ofequipped vehicles being too low to evaluate dy-namic guidance. Many companies participated inthis experiment, e.g. automotive builders len t carsto be equipped. Moreover, support from the Ger-man public authorities began to legitimize thetechnology. The Berlin Senate and the Germantransportation ministry are not supposed to sup-port impostors, and the initial establishment ofthe credibility of the technology is an importantstep in its acceptance. By choosing and support-ing the system, the authorities showed that Alis-cout could be useful and gave it credibility in theeyes of other road administrations and trafficmanagement authorities around the world. Itcould be supposed that this choice was the resultof a comparative evaluation of several technolo-gies. Berlin would probably not want to be anangry orphan . The Berlin experiment has cre-ated a pre-announcement effect, changing theexpectations of other European public powers.Experimentation in London has followed that inBerlin. As the UK government prefers not tofinance private systems, companies licensed bySiemens have tried to install the Aliscout systemin London. This experiment covers a limited area,but it has received large coverage in the media.Two characteristics should be noted.

A g r e e m e n t s with local companies allowSiemens to neutralize potential competition andto carry the de facto standard. Marketing agree-ments offer Siemens the possibility of profitingfrom the lobbying experience of local firms. Li-censed companies are mainly network operators

and road equipment builders, linked with thelocal transportation ministry. This also createsinterested parties within the country.

Coverage and debates in the media give agenerality to the system. Speaking, writing anddebating about something is to give it existence.From large-circulation newspapers to profes-sional journals and specialised reviews, articlesreinforce pre-announcement effects vis-a-vis finalusers and intermediary users 14 such as publicadministrations (or network operators). The pub-lication of papers in scientific journals, the com-munications and papers given at internationalconferences, and TRRL reports 15 provide Alis-cout with scientific legitimation in the eyes of thescientific community.

The first step of Siemens strategy can be thussummarized as: the creation of a fact ; the gener-ation of profit from its demonstrative and pre-an-nouncement effects; the influence of anticipationboth from the final user and from public powers;the development of commercial agreements whichneutralize potential competitors; profit from localfirms experienced in lobbying; an increase thenumber of interested parties.3 .1 .2 . De f ine the r igh t s tand ard

The second step of Siemens strategy is theattempt to standardize infrared beacon/vehiclelink and guidance functions in a voluntary stan-dards committee. In Europe, when a commonstandard exists, it is compulsory to mention andto respect it in each tender process, and almostall public contracts (e.g. beacon installation andtraffic management software) are submitted in atender process. In such a framework, standard-ization of Aliscout would give Siemens a quasi-monopoly. In September 1989, BSI (UK boardstandard) tried to standardize Aliscout in the

14 I n t h i s c a s e p u b l i c a u t h o r i t i e s o r n e t w o r k o p e r a t o r s w h oc a n p l a y t h e s a m e r o le a r e n o t f i n a l u s e r s b u t i n t e r m e d i a r yu s e r s w h o p r o v i d e t h e i n f r a s t r u c t u r e .

15 A r t i c l e s p u b l i s h e d i n T r a f f i c E n g i n e e r i n g a n d C o n t r o lT r a n s p o r t a t i o n R e s e a r c h R e c o r d a n d T r a n s p o r t a t i o n R e -s e a r c h n u m e r o u s p a r t i c ip a t i o n s i n i n t e r n a t i o n a l c o n f e r e n c e so n I n f o r m a t i o n V e h i c l e H i g h w a y s S y s te m a n d R o a d T r a n s -p o r t I n f o rm a t i c s a n d t h r e e T R R L r e p o r t s in 1 98 9.


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448 V. Mangematin, M. Callon Research Policy 24 1995) 441-458voluntary standards committee 16 Cenelec. Afterorganized counter arguments, the standardizationproject was rejected on appeal 1 7 If standardiza-tion had not been rejected on appeal, it wouldhave opened the way for Siemens to exploit itsmonopoly. However, even if this procedure didnot reach its aim, the effects were still positive.Thanks to the standardization process, Aliscout iswell known. The standard was rejected not be-cause of technical limitations, but because offaulty drafting.

After this step, Siemens is still developing thetechnology. Aliscout has not definitely beenadopted. Berlin is just an experiment and not acomplete installation. Aliscout has to face politi-cal decisions. The problem remains to initiateincreasing returns, but firms do not have entirecommand of political decisions. From a theoreti-cal point of view, the last step remains the mostinteresting.3 1 3 Technical mod ifications to avo id involvingpublic authoritiesThe Parisian project to install Aliscout, namedInflux, is very similar to those in Berlin andLondon. Commercial agreements, lobbying, sci-

16 Cenelec, Primary Questionnaire, Route Guidance Infor-mation Systems: Draft Standard for Road Vehicle Communi-cation Link, August 1989.

17Compte rendu de la r6union du CENELEC fait parI UTE, 1990.

entific visibility and communication are the maincharacteristics of the strategy, but promoters ofthe project, especially the Urba 2000 consultinggroup, have introduced small differences in tech-nology. Whereas Aliscout offers only a dialoguebetween beacons and the equipped vehicle, Urba2000 introduces a second source of informationvia an RDS channel 18. The technical data areshown in Fig. 1.

Technical transformations have led to a modi-fication of the conditions of competition. Twomain effects should be noted.

As in the Carminat system, the broadcastingof information via an RDS channel allows net-work externalities and the problem of increasingreturns to be circumvented. The broadcast infor-mation existed before the installation of the sys-tem. Data are no longer collected from equippedvehicles, as in the Aliscout system, so the impor-tance of installed bases is reduced. Unlike Alis-cout, progressive installation is possible. Also, inInflux it is possible to offer all the functions ofdynamic guidance even at the start. Two elementsweaken the network externalities effects. The firstis the use of an RDS channel to broadcast roadguidance information and utilise traceur vehi-cles. A traceur vehicle is an equipped car whichis always moving, providing information to theInflux central computer via infrared links. How-

18 Collec tif, 1989.

ALISCOUT systemThe system numbers vehiclespresent in a geographic areaand provides driver withtraffic advice thanks beaconsinstalled on traffic lightsconnected to a centralcomputer INFLUX system

connexion of the twosystems thanks to aon-board software

Fig. 1. Operational principles of Influx.

RDS systemDiffusion of existinginformation via RDSsystem. Theseinformations arecomputed by the insidevehicle system


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V. Mangematin, M. Callon /Re sear ch Policy 24 1995) 441 -458 9

e v e r , c h o o s i n g t o h a v e a ' t r a c e u r ' v e h i c l e i s n o t a' m i r a c l e ' s o l u t i o n - - i t i s a c o st ly o n e . M o r e o v e r ,o p e r a t i o n a l s o l u ti o n s h a ve t o b e f o u n d . R a n d o m -i z i n g t h e e q u i p m e n t s e e m s t o b e i m p o s s i b l e . E x -p e r t s e s t i m a t e t h a t t h e c r i t i c a l n u m b e r o fe q u i p p e d c a r s is b e t w e e n 1 a n d 1 0 o f t h et o t a l ; t h a t m e a n s b e t w e e n 1 0 0 0 0 a n d 1 0 0 0 0 0v e h i c l e s i n P a r i s . T h e r e f o r e , t h e e q u i p p i n g o fs p e c i a l k i n d s o f v e h i c l e s , s u c h a s t a x is , p o l i c e c a r sa n d b u s e s , c a n n o t g u a r a n t e e a s u f fi c i e n tl y l a r g ec o v e r a g e o f t e r r i t o r y .- - U s i n g a R D S s y s te m i n In f l u x c o u l d a l lo wf i r m s w h i c h a r e w o r k i n g o n t h e C a r m i n a t s y s t e mt o g e t s o m e r e t u r n s f r o m t h e i r i n v e s t m e n t e v e n i fC a r m i n a t d o e s n o t p r e v a i l. I t o p e n s a d o o r f o rp o t e n t i a l c o l l a b o r a t i o n o r a g r e e m e n t w i t h P h i l i p so r T D F i f C a r m i n a t p r o v e d t o b e a f a il u r e . I tw e a k e n s t h e t e c h n i c a l a n d a n t i f l a n k i n g l i n k s b e -t w e e n C a r m i n a t p a r t n e r s . T h e c r e a t i o n o f a t e ch -n i c a l f o o t b r i d g e c o u l d o p e n a b r i d g e f o r p o t e n t i a lc o m m e r c i a l a g r e e m e n t s . A s t h is is a v e r y r e c e n td e v e l o p m e n t , i t i s n o t p o s s i b l e t o a n a l y s e i t se f f e c t s .

W e h a v e i d e n t i f i e d t h r e e s t e p s i n t h e s t r a t e g yo f S i e m e n s . T h i s w a s a s e q u e n t i a l a n a l y si s, r e p r e -s e n t i n g t h r e e s t a g e s i n t h e d e v e l o p m e n t l if e o ft h e p r o d u c t . F r o m a n a n a l y t i c a l p o i n t o f v ie w , iti s p o s s i b le t o s u m m a r i z e t h e s t r a t e g y o f S i e m e n si n t e r m s o f s i x c h a r a c t e r i s t i c s :- - c r e a t e a f a c t , t o m o d i f y i n v e s t o rs ' e x p e c t a -t i o n s ( p u b l i c a d m i n i s t r a t i o n a n d n e t w o r k o p e r a -t o r s ) ;

s c i e n t i f ic a l l y l e g i t i m i z e t h e t e c h n o l o g y b y ad y n a m i c p o l i c y o f p u b l i c a t i o n i n s c i e n t if i c j o u r -nal s ;- - m a k e c o n t r a c t u a l a g r e e m e n t s w i th k e y f ir m st o e n l a r g e t h e c o m m u n i t y o f i n te r e s t e d p a r t i e sa n d t o s p r e a d t h e n e t w o r k o f i n f lu e n c e ;- - p a t e n t t h e t e c h n o l o g y t o p r o f i t f r o m am o n o p o l y a n d t h e n l ic e n s e o t h e r f i r m s to i n-c r e a s e a w a r e n e s s o f th e p r o d u c t ;- - s t a n d a r d i z e t h e te c h n o l og y in a v o l un t a rys t a n d a r d c o m m i t t e e t o g a i n a c e n t r a l p o s i t i o n ;

i n t r o d u c e t h e b r o a d c a s t i n g o f r o a d g u i d a n c ei n f o r m a t i o n vi a an R D S c h a n n e l t o c i r c u m v e n tn e t w o r k e x t e r n a l i t i e s a n d c r e a t e a t e c h n i c a l f o o t -b r i d g e b e t w e e n C a r m i n a t a n d A l is c o u t t o w e a k e nt h e l i n ks o f t h e o t h e r c o n s o r t i u m .

3.2. Carminat: Open the technologyC a r m i n a t ' s s t r a t e g y c a n b e a n a l y s e d a s a n o r -

g a n i z a t i o n a l o n e . T h e p a r t n e r s i n v o l v e d i n t h ed e v e l o p m e n t o f t h e t e c h n o l o g y a g r e e d t o p r o -m o t e a c o m p l e t e s y s te m w h ic h d o e s n o t n e e d a n ym o r e p a r t i c i p a n t s b e f o r e i t i s a d o p t e d . E a c h f i r mi n v o l v e d i n t h e p r o j e c t h a s i t s o w n s p e c i f i c i t y . I tc a n b e c o n s i d e r e d a s r e p r e s e n t a t i v e b o t h a s a ni n d u s t r y a n d a s a g r o u p o f u s e rs . T h r e e p r i n c i p l e ss h o u l d b e h i g h l i g h t e d :- - e s t a b li s h in d e p e n d e n c e v is -a - vi s p u b l i c a d m i n -i s t r a t i on ;- - o p e n t h e t e c h n o l o g y t o p r o f i t f r o m l a rg e a n dr a p id d e v e l o p m e n t ;- - i n c l u d e a r e p r e s e n t a t i v e o f e a c h f i e ld i n v o l v e ds i n c e t h e i n i t ia l d e s i g n o f t h e t e c h n o l o g y .3.2.1. Independen ce vis a vis public adm inistration

F r o m t h e s t a r t , t h e C a r m i n a t s y s t e m e x c l u d e dt e c h n i c a l i n t e r r e l a t e d n e s s w i t h p u b l i c a d m i n i s t r a -t io n . T h e a i m o f t h e C a r m i n a t p r o m o t e r s i s t oe n a b l e d r i v e r s t o i n s t a l l t h e C a r m i n a t s y s t e m a sc a r r a d i o . T h e y p r e f e r t o r e q u i r e n o p u b l i c i n v es t -m e n t t o d e v e l o p t h e c o m m u n i t y o f us e rs . T h eR D S c h a n n e l c a n u s e s t a n d a r d b r o a d c a s t i n ge q u i p m e n t . T h e s t r e n g t h o f C a r m i n a t is t o b ei n d e p e n d e n t o f p o li ti c a l d e c i s io n s o n w h e t h e r t oi n v e s t o r n o t . I t s f i n a n c i a l n e u t r a l i t y f r o m p u b l i ca d m i n i s t r a t i o n i s a g r e a t a r g u m e n t a g a i n s t A l i s -c o u t .

H o w e v e r , t h e e v o l u t i o n o f e x t e r n a l p r o j e c t sa n d e x t e r n a l p a r t i c i p a n t s a l so w e a k e n e d t h eC a r m i n a t p r o j e c t . I n d e e d , s t a n d a r d i z a t i o n o f t h eR D S i n t h e v o l u n ta r y s t a n d a r d s c o m m i t t e e w a sl a t e , e v e n t h o u g h s t a n d a r d i z a t i o n i s r e q u i r e d t oa l l o c a t e b r o a d c a s t i n g f r e q u e n c i e s . N o n - s t a n d a r d i -z a t io n o f th e R D S d e l a y e d t h e t e s t in t h e P a r i s -R e n n e s c o r r i d o r a n d t h e a b s e n c e o f a n u m e r i cm a p r e t a r d e d a t e s t o f th e c o m p l e t e s y s te m .3.2.2. Open technology

C o m p e t i t i o n b e t w e e n A l i s c o u t a n d C a r m i n a tc a n b e s u m m a r i z e d a s a c o m p e t i t i o n b e t w e e no p e n a n d c l o s e d ( p r o p r i e t a r y ) t e c h n o l o g i e s . T h eI n f l u x s y s t e m w e a k e n s t h i s p o i n t , b u t i t i s s t i l lt r u e f o r t h e o t h e r A l i s c o u t s y s te m . C a r m i n a t iso p e n i n i t s c o n c e p t i o n a n d i n i t s u t i l i z a t i o n .


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45 V. Mangematin, M. C allon / Research Policy 24 1995) 441-4 58O r g a n i z a t i o n o f t h e c o o p e r a t i o n l e av e s e a c h

p a r t n e r f r e e t o d e v e l o p a n d p r o m o t e i t s o w nt e c h n ol o g y . T h e b a si c a g r e e m e n t b e t w e e n t h ef i r m s w h i c h b e l o n g t o t h e c o n s o r t i u m i s b a s e d o na c o m m u n i c a t i o n p r o t o c o l w i t h t h e c h ip . A s s o o na s t h e c h i p i s c h o s e n , e a c h f i r m c a n d e v e l o p i t so w n t e c h n o l o g y . O n - b o a r d f u n c t i o n s c a n b e i n -s t a l l e d w i t h o u t a n y g u i d a n c e f u n c t i o n . T h e r e f o r e ,t h e R D S c a n u s e v o c a l s y n t h e si s a n d a n e l e c -t r o n i c m a p i s n o t n e c e s s a r y . P r o g r e s s i v e i n s t a l l a -t i o n i s p o s s i b l e e v e n i f it is n o t t h e b e s t s o l u t i o n .- - A l i s c o u t u s e r s a r e s u p p o s e d t o f o l lo w m a n -a g e m e n t t r a f fi c n o t ic e s ( o r a d v i c e , o r w a r n in g s ) . I ft h e y d o n o t , t h e y c a n n o t p r o f i t f r o m d y n a m i cg u i d a n c e . I f t h e u s e r d o e s n o t f o l lo w w a r n i n g sc o m i n g f r o m t r a ff i c m a n a g e m e n t r e g u l a ti o n , h eh a s t o w a i t t o c r o s s a n o t h e r b e a c o n b e f o r e h e i sd i r e c t e d a g a i n. T h e b e h a v i o u r o f t h e u s e r i s i n-s c r i b e d i n t h e t e c h n o l o g y . I t i s a s s t a n d a r d i z e da n d c l o s e d a s t h e t e c h n o l o g y . W i t h C a r m i n a t , t h eu s e r i s a l w a y s f r e e t o c h o o s e h i s o w n w a y . W h a t -e v e r w a y h e c h o o s e s , h e i s d i r e c t e d . A c t u a l l y , h eh a s a n e l e c t r o n i c m a p o n b o a r d t o g e t h e r w i t h a lla v a i la b l e i n f o r m a t i o n a b o u t t r a f f ic a n d d i r e c t io n s .S t u d i e s o n u s e r b e h a v i o u r s h o w t h a t d r i v e r s p r e -f e r t o f o l lo w r o a d s t h e y a r e u s e d t o , r e ly i n g o nt h e i r o w n e x p e r i e n c e r a t h e r t h a n o n a d v i c e fr o mt h e t ra f f i c r e g u l a t i o n a u t h o r i t ie s . T h e s e n t e n c e I fe v e r y b o d y f o l lo w s t h e s a m e t r a f f ic r e g u l a t i o n a d -v i c e , t h a t w i ll c r e a t e a l a r g e t r a f f i c j a m s s u m m a -r i z e s t h e g e n e r a l a t t i tu d e . C a r m i n a t t e c h n o l o g y i so p e n ; p r e s c r i p t i o n s f o r i t s u t i l i z a t i o n a r e n o t a ss t r o n g a s i n A l i s c o u t .

3.2.3. A representative o f each field should be involved from the initial design of the technologyT h i s e l e m e n t h a s t h r e e d i m e n s i o n s .

A complete inter related but m odu lar system. A ss t a t e d a b o v e , e a c h e l e m e n t c a n b e i n s t a l l e d i n as e p a r a t e w a y o n a v e h i c l e , b u t l i n k a g e s b e t w e e ne a c h e l e m e n t a n d t h e c e n t r a l p r o c e s s o r c r e a t et e c h n i c a l i n t e r r e l a t i o n s a n d o b l i g e p a r t n e r s t oc o o p e r a t e . O f c o u r s e , t h e s y s t e m i s m o d u l a r , b u to n l y a f t e r c o m p l e t e i n t e g r a t i o n . I t i s p o s s i b l e t od e c l i n e a c o m p l e t e r a n g e f r o m t h e t o p a n d n o tf r o m t h e b o t t o m .

Generalization of the system since its initial design.C o o p e r a t i v e d e s i g n o f t h e s y s t e m a n d c o o p e r a t i v er e s e a r c h a g r e e m e n t s h a s a l lo w e d i n t 6 r e s s e m e n to f d i f f e r e n t k i n d s o f p a r t i c i p a n t s s i n ce t h e s t a r t( C a l l o n , 1 9 8 6 ; L a t o u r , 1 9 8 7 ) . I n A l i s c o u t , n e g o t i a -t i o n s a r e a t t h e e n d o f t h e p r o c e s s . T h e s e q u e n c ec a n b e d e s c r i b e d a s f o l l o w s : t e c h n i c a l d e v e l o p -m e n t ; t e c h n o l o g y c l o s e d ; c o m m e r c i a l c o n t r a c t u a la g r e e m e n t s t o p r o m o t e t h e s y s t e m .

I n t h e C a r m i n a t c o n s o r t i u m , n e g o t i a t i o n s a tt h e b e g i n n i n g a r e v e r y im p o r t a n t . C h o o s i n g t h ec e n t r a l p r o c e s s o r i s a c o m p r o m i s e a m o n g s t t h em e m b e r s . A l l i n t e r e s t e d p a r t i e s a r e i n v o l v e d i nt h is c o m p r o m i s e . U n l i k e t h e A l i s c o u t s y s t e m th e r ei s n o t e c h n i c a l i n t e r r e l a t e d n e s s b e t w e e n C a r m i -n a t a n d o t h e r p a r t i e s w h o h a v e n o t b e e n i n vo l ve di n t h e d e v e l o p m e n t s i n c e th e v e r y b e g i n n i n g o ft h e d e si gn . E a c h a r e a o f c o m p e t e n c e a n d e v e r ye s s e n t i a l c o n t r i b u t o r i s m o b i l i s e d o n t h e p r o j e c t .T h u s , t e c h n i c a l c h o i c e s a r e t h e r e s u l t o f a c o m -p r o m i s e b e t w e e n d i f f e re n t w a y s o f u n d e r s t a n d i n gr o a d g u i d a n c e . B y i n c lu d i n g a ll t h e f i r m s n e e d e dt o m a k e t h e p r o d u c t w o r k w i t h o u t a n y o th e rp a r t n e r s , th e d e v e l o p m e n t c o n s o r t iu m s h a p e as y s t e m w h i c h c a n b e i n s t a l l e d d i r e c t l y i n v e h i c l e s .T D F i s a r e p r e s e n t a t i v e o f t h e b r o a d c a s t i n g i n -d u s t r y , S a g e m s p e c i a l i z e i n l o c a l i z a t i o n s y s t e m s ,w h i l e P h il ip s a n d R e n a u l t h a v e e x p e r i e n c e i nc a r - r a d i o m a k i n g a n d i n s t a l l a t i o n . I n t h a t w a y ,C a r m i n a t h a s b e e n g e n e r a l i z e d e v e r s i n c e i t s c o n -c e p t i o n .Au tom atic creation o f a market . T h e p r e s e n c e o fa n a u t o m o t i v e b u i l d e r i s i m p o r t a n t . T h a t m e a n st h a t t h e s y s t e m w il l b e a p a r t o f t h e v e h i c l e a n ds o c r e a t e s a n a u t o m a t i c m a r k e t . M o r e o v e r , itc o u l d i n i t i a t e i n c r e a s i n g r e t u r n s .

W e h a v e s h o w n ( M a n g e m a t i n , 1 9 93 ) t h a t t h ed e c i s i o n t o f o r m a c o o p e r a t i v e a g r e e m e n t t o d e -v e l o p a t e c h n o l o g y a f f e c t s t h e c h a r a c t e r i s ti c s o ft h e t e c h n i ca l o b j e c t a n d t h u s t h e d e v e l o p m e n t o ft h e m a r k e t . I n d e e d , g o i n g i n t o p a r t n e r s h i p f o rt h e d e v e l o p m e n t o f a te c h n o l o g y m e a n s c h o o s in go n e s a ll ie s , i. e. t h e d i f f e r e n t d e v e l o p e r s o f t h et e c h no l o g y . If t h e i d e a p r o m o t e d b y C a l lo n( 1 9 9 2 a ,b ) t h a t p o t e n t i a l a d o p t e r s o f a t e c h n o l o g ya r e m o r e o r l e s s t h e s a m e i s a c c e p t e d , i t c a n b er e c o m m e n d e d t h a t f i r m s i n c l u d e r e p r e s e n t a t i v e s


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v. Mangematin, M. Callon Research Policy 24 1995) 441-458 451of each group of potential users from the designstage, just as the Carminat project did.

4 H o w t o m a k e t h e t e c h n o l o g ic a l c o m p e t i t i o nm o d e l s m o r e r e a l i st i c w h e n d e s c r i b i n g t h e r o le o ft h e f i r s t u s e r s

The case study presented in this paper con-firms the decisive nature of the role of the firstusers, even if they are included in the develop-ment consortium. It reveals that the identificationand make-up of the first group of users and thekind of decisions they make (as to their relativepreferences) are to a large extent the results ofstrategic options implemen ted by the system ssponsors. Thus, in order to be more realistic, thismodel should take into account the followingseries of considerations.

4 . 1 . F i r s t u s e r s o r l a t e d e s i g n e r s ?

Our case study confirms the arbitrary and re-strictive nature of the distinction made betweenthe supplier (of a technological system) and theuser. The first users are closely associated withthe design and early development stage. Further-more, the user concept is itself ambiguous: as ageneral rule (and our example illustrates this)there is to be found between the end-user andthe producer-designer a whole series of otherparticipants able to intervene significantly intechnological re-designing and in the shaping ofthe first adoption decisions. In the case of Alis-cout, Urba 2000 was appointed to promote theSiemens system and has made a strong contribu-tion to its on-going development, adjusting it tocomply with the exigencies of certain French lo-cal authorities without whose agreement that sys-tem could not even be made available to roadusers. The salient observations to be borne inmind are (a) that the first users are selected bythe promoters more than they themselves selectthe system, (b) that they play an active part indesign development and (c) that they form anintermediary link between the end-user popula-

tion and the system supplier. 19 This implies thatthe process of selecting the first users (de-termined by supplier strategy) must be enteredinto the model, and that the system technology isnot to be taken as irrevocably finalised by thetime it is first placed on offer.4 .2 . A d a p t i n g t h e s y s t e m t e c h n o l o g y t o i n t e re s t t h ef i r s t - u s e r

It comes as no surprise to see that the firstusers are set up during the design phase whenwe consider recent findings about the sociology oftechnology (Callon, 1987; Latour, 1987; Law andCallon, 1989; MacKenzie, 1990; Mustar, 1991).The technical choices made during that phase arestrategic options. They divide the target popula-tion into three separate categories of individuals:those who, being attracted by the technical char-acteristics of the designer s project, will subscribeto and support it; those who will reject it becausethey would have preferred another technicalchoice; those who are neither for nor against it,but retain an open mind. Thus, by being preparedto adapt his technological choices, the supplier isable to shift the dividing line between proponentsand opponents of the system and can even, insome cases, go so far as to remodel their identi-ties (e.g. by introducing new categories of users).Siemens agreed to operate its system using anRDS network, and this made it attractive to somelocal authorities who had thus far resisted it. TheCarminat consortium (Renault, Philips, Sagemand TDF) adopted a technology which relied onexisting networks and private enterprise, involv-ing no additional public expenditure. By doing so,they avoided the need to try and convince eachand every local authority, since the latter couldthen take only detached (if not approving) atti-tudes towards the project. Also, by accepting noconstraints other than that of making their ownsystems compatible with a microchip which en-sured overall coordination within the Carminatsystem, the partners of the consortium willingly

19 The same argumentfor technologicalprogrammes s madeby Lar6do and Callon (1991).


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452 V. Mangematin, M. Callon / Research Policy 24 1995) 441-4 58entered into a structure of cooperation which leftthem with a large measure of autonomy. Manyother such examples could be quoted to showthat the technological choices made during thedesign and early development phases determined,and made interdependent, the partners and userswho would contribute to getting the system offthe ground. The first users cannot be seen asout-of-model factors. In order to secure the

interest of a user or intermediary agent consid-ered strategically important, the designer-sup-plier may go so far as to remodel his systemtechnology and revise his original options. Tech-nology is then adjusted to accommodate the ex-pectations and requirements of the user thustargeted. The identities of the first users and thedecisions they make thus depend substantially onthe strategies of interessement deployed by thesystem suppliers, and those strategies translateinto technological reappraisals and adjust-ments. 204.3 . Technological hybr id iza t ion seen as a compet it ion l imi t ing s tra tegy

Within the compet ition models confronting twotechnologies, T 1 and Te, no system modificationscan be assumed during the process of introduc-tion (apart from the special case of providingcompatibility when two standards are competing).Strangely, hybridization of the two systems isnever an option 21, despite the fact that techno-logical advance often results from transfers orcopying in order to combine elements belongingto several different technologies. An interestingstudy by Schot (1992) describes how two compet-ing dyeing techniques came, in the 18th century,to give birth to a single new process when their

2o The existence of the se strategies has been demonst ratedby students of marketing policy. For instance, the pre- an-nouncements frequently used in the computer industry canbe designed to influence the options of targeted first users(Swann and Lamaison, 1988). However, in many cases, theimpact of the technological strategies implemented by compa-nies is greater and more durable that of purely commercialdevices.21 Farrell and Saloner (1992) analysed the effects of theintroduction of converters, emulators or adapters on marketequilibrium adoption of otherwise incompatible technologies.

owners came together in an acceptable compro-mise. The case discussed in this paper bringsfurther confirmation of this approach. Siemens isclearly ready to combine its technology with someelements of the system developed by Philips andits associates who, for their part, could considerincorporating some of the options of their com-petitors. In the case of complex technologicalsystems made up of a large number of differentelements, opportunities for hybridization andmodification using foreign contributions aremanifold. The strategic advantages of such movesare obvious if we accept the notion of interesse-ment : the combination of two technological sys-tems enables two networks to be linked and thusincreases the number of supporters enrolled.Aliscout, by taking on elements of Carminat, in-creases its chances of success merely because itthereby attracts new forces prepared to defend it.4.4. The pote nt ia l impo r tance o f the f ir s t usersdepends on the ex ten t o f the i r pow er to in f luences oc ia l ne twor ks

We have just shown that the determination offirst-user identities is a factor of great strategicimportance to the system suppliers. We must nowlook at the consequences of the choices made bythose first users on subsequent adoption deci-sions. For this purpose, we will start from theapparent opposition between lock-in models andthe more conventional ones used to describetechnological diffusion.

What underlies the lock-in phenomenon?Arthur (1988a) probably provides the most suc-cinct answer to this question: the more a technol-ogy is adopted, the greater its chances of beingadopted. Wheth er we consider the network exter-nalities, economies of scale, technological interre-latedness or the learning factor, the same mecha-nisms always take over: a new user, from themere fact of adopting the system and indepen-dently of his identity and social influence, con-tributes to swelling the rate of adoption. Here,the reasoning is based on the simple addition ofnumbers. Although the success of this model issubstantially due to this arithmetical simplicity,the latter is nevertheless also its greatest short-


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c o m i n g b y c o m p a r i s o n w i t h m o r e t r a d i t i o n a l a n a l -y s e s o f i n n o v a t i o n s p r e a d .

I n t h e w e l l - k n o w n m o d e l s p r o p o s e d b yG r i l i c h e s , b y M a n s f i e l d a n d b y S t o n e m a n , t h ea d o p t i o n r a t e is r e l a t e d t o t w o c l o s e ly li n k e ds e r i e s o f f a c t o r s : r e d u c t i o n o f u n c e r t a i n t y a n dc o n t a g i o n . T h e f i r s t o f t h e s e i s s i m i l a r t o t h ee x p l a n a t i o n g i v e n a b o v e o f t h e l o c k - i n p h e -n o m e n o n : s p r e a d is a s im p l e m a t t e r o f n u m b e r sa n d a d d i t io n s , g i v e n t h a t u n c e r t a i n t y d e c r e a s e s a st h e n u m b e r o f u s e s u s e r s in c r e a s e s . H o w e v e r , t hi sis s u p p l e m e n t e d b y a n o t h e r f a c t o r : t h e a d o p t i o nd e c i s i o n a l s o d e p e n d s o n p a r t i c i p a t i o n i n c e r t a i ns o c i a l n e t w o r k s . B u r t ( 1 9 8 7 ) t a k e s t h i s a n a l y s i sm u c h f u r t h e r w h e n h e a d v a n c e s th e n o t i o n o fs t r u c t u r a l e q u i v a l e n c e . T h i s c o n c e p t p r o v i d e s a

m e a s u r e o f th e d e g r e e o f s im i l a ri ty b e t w e e n d i f-f e r e n t p o t e n t i a l u s e r s a n d i s b a s e d o n a c o m p a r i -s o n b e t w e e n t h e i r s o c i a l i n fl u e n c e s . I t g i ve s a v e r ys i m p l e d e s c r i p t i o n o f t h e c o n t a g i o n p r o c e s s . S u c hm o d e l s h a v e a c l e a r a d v a n t a g e a s c o m p a r e d w i t ht h o s e f o c u s i n g o n l o c k - i n ; t h i s i s b e c a u s e t h e ye n d o w t h e f i r s t u s e r s w i t h a m o r e s o p h i s t i c a t e dq u a l it y f o u n d e d o n t h e k e y c o n c e p t o f r e p r e s e n t a -t iv i ty . I f u s e r s A 1 , A 2 a n d A 3 h a v e a l r e a d ya d o p t e d t e c h n o l o g y T I , t h e n A 4 , A 5 a n d A ~ w i l la l s o d e c i d e t o a d o p t i t , n o t b e c a u s e b e t h e y a r ei n f l u e n c e d b y t h e m e r e n u m b e r s o f t h e p r e v i o u sa d o p t i o n s , b u t e s s e n t ia l l y b e c a u s e t h e y h a v e d e -c i d e d , f o r t h e i r o w n r e a s o n s , t o m a k e t h e i r c h o i c e si n l i n e w i t h t h o s e o f A ~ , A 2 a n d A 3 2 2 A s B u r t( 1 9 8 7 ) w o u l d s a y , t h e f a c t t h a t A ~ h a s d e c i d e d t oa d o p t T 1 m a k e s i t p r o b a b l e t h a t t h e s a m e s y s t e mw i l l a l s o b e a d o p t e d b y a l l t h o s e w h o h a v e as i m i l a r p r o f i l e o f so c i a l r e l a t i o n s ; i n t h e r e p e r -

22 I t is a m u s i n g t o n o t e t h a t G r a n o v e t t e r , w h o h a s g r e a t l yc o n t r i b u t e d t o h i g h l i g h t i n g t h e r o l e o f s o c i a l n e t w o r k s 1 9 8 5 ),r e d u c e d t h e m i m i c r y a n d c o n t a g i o n f a c t o r s to a s i m p l e m a t t e ro f n u m b e r s in a n e a r l i e r s t u d y 1 9 7 8 ). A t t h a t t i m e , h ep o s t u l a t e d a p o p u l a t i o n o f p o t e n ti a l u s e r s c o m p o s e d o f i nd i -v i d u a l s w h o s e c r i t e r io n o f c h o ic e w a s t h e n u m b e r o f a d o p t i o n sa l r e a d y re c o r d e d , a n d e x a m i n e d a c o n f i g u r a t io n o f N p o t e n -t i al u s e r s w h e r e e a c h a d o p t o r . A i i s c h a r a c t e r i z e d b y t h en u m b e r o f d e ci s io n s i p r i or t o h is o w n ) n e e d e d t o m a k e h i md e c i d e t o a d o p t . G i v e n a r e g u l a r d i s t r i b u t i o n , s o t h a t a t l e a s to n e i n d i v i d u a l d e c i d e s a f t e r o n e a d o p t i o n , o n e a f t e r t w oa d o p t i o n s a n d o n e a f t e r i a d o p t i o n s , i t c a n e a s i l y b e s h o w nt h a t a d o p t i o n d o e s n o t s t o p .

t o i r e o f p o l i t i c a l p h i l o s o p h y t e r m s , i t c o u l d b es a id t h a t A ~ i n d u c e s t h e b e h a v i o u r o f a ll t h o s e o fw h o m h e is r e p r e s e n t a t i v e . I t i s c l e a r w h y t h ei d e n t i t i e s o f t h e f i r s t u s e r s a r e o f g r e a t s t r a t e g i ci m p o r t a n c e : a c c o r d i n g t o w h e t h e r A 1, A 12 o r A 2 4is th e f i rs t to a d o p t , t h e p r o c e s s m a y c o n t i n u e ,d e v e l o p e x p o n e n t i a l ly , o r c o m e t o a h a l t. T h ec h o i c e m a d e b y t h e f i r s t u s e r s i s t h a t o f a l l t h o s et h e y r e p r e s e n t ; i f t h e y a r e w o n o v e r , t h is c a p t u r e sa t o n e s t r o k e a w h o l e b o d y o f o t h e r s w i t h t h es a m e c h a r a c t e r i s t i c s . G i v e n t h a t t h e r e i s n o r e a -s o n w h y t h e p r o c e s s s h ou l d n o t b e r e p e a t e d a n yn u m b e r o f t im e s , a d o p t i o n w il l s p r e a d a n d f a no u t , e a c h n e w u s e r l e a d i n g t o p a r t i c u l a r t h r e a d sa n d s u b - s y s t e m s o f t h e e s t a b l i s h e d s o c i a l w e b .T h e r a t h e r n a i v e a r i t h m e t i c o f t h e l o c k -i n m o d e lc a n n o t r e f l e c t t h i s d y n a m i c p r o c e s s i n w h i c h u s e ri d e n t i t y i d e n t i f y i s a t l e a s t a s i m p o r t a n t a s t h ea d o p t i o n d e c i s i o n i n t h e f i r s t p l a c e . T h e p a t h - d e -p e n d e n c y f a c t o r t h e n b e c o m e s m o r e p o t e n t .

I n t h e c a s e d i s c u s s e d i n t h i s p a p e r , t h e s e l e c -t i o n o f t h e f i r s t u s e r s w a s o b v i o u s l y m a d e w i t ht h e s e s t r a t e g i c c o n s i d e r a t i o n s i n m i n d . I f C a r m i -n a t c o n v i n c e s t h e A m s t e r d a m p o l i c e a u t h o r i t y ,t h e r e is e v e r y c h a n c e t h a t t h o s e o f o t h e r l a r g ec i t i e s w i l l f o l l o w , t o g e t h e r w i t h a l l t h e o t h e r p u b -l ic s e rv i c e s f o r w h o m a s m o o t h a n d r a p i d f l o w o ft r a ff i c is o f p r i m e i m p o r t a n c e . I f S i e m e n s w i n so v e r L o n d o n a n d P a r i s , t h e n 3 0 m i l l i o n d r i v e r sw i l l b e u s i n g A l i s c o u t a n d , a b o v e a l l , t h e s e a r et w o s y m b o l i c c i t i e s c a p a b l e o f s w a y i n g t h e c h o i c eo f a ll th o s e E u r o p e a n c o n u r b a t i o n s w h o r e g a r dt h e i r o w n t r a f fi c p r o b l e m s a s s im i l a r t o t h o s e o ft h e F r e n c h a n d B r i t i s h c a p i t a l s . T h u s , s t r a t e g i cc o n s i d e r a t i o n s a r e e v e r p r e s e n t w h e n i t c o m e s t os e l e c t i n g f i r s t - u s e r t a r g e t s . T h e i r r e p r e s e n t a t i v e -n e s s is a ss e s s e d a n d t h e c o s t o f c a p t u r i n g t h e m( r e d e s i g n i n g t h e t e c h n o l o g y to s u i t t h e i r p a r t i c u -l a r r e q u i r e m e n t s , f i n a n c i a l f a c i l i t i e s t o h e l p w i t he x p e n d i t u r e o n l o c a l i n f r a s t r u c t u r e s ) i s w e i g h e da g a i n s t t h e l o n g - t e r m r e t u r n s t h e y p r o m i s e t ob r i ng .4 5 The first users seen as strategically vital by thesponsors o f system T 1 are not necessarily the sameas those targeted by the sponsors o f system T 2

A p a r t i c u l a r i ty o f t h e c a s e s t u d i e d h e r e is t h a ti t i s a c o n f r o n t a t i o n b e t w e e n a t e c h n o l o g i c a l s y s -


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V. Mangernatin, M . Callon / Research Policy 24 1995) 441-4 58 55f r e e l y a ll o w s A l i s c o u t t o n e g o t i a t e w i t h l o c a l a u -t h o r i t i e s , t h i s i s b o u n d t o l e a v e r o o m f o r i r r e -v e r s i b l e s i tu a t i o n s p r e j u d i c i a l t o t h e f o r m e r s f u -t u r e p r o s p e c t s a s a w h o l e . T h i s c a n b e e x p r e s s e di n t h e f o l l o w i n g t e r m s : i f T 1 i s a n e t w o r k - l e ds y s t e m , a n d i f t h e f i r s t u s e r s o f T ~ c a n a l s oi n f l u e n c e , e v e n l a t e r, t h e d i f f u s io n o f T 2 ( b a s e do n e c o n o m i e s o f s c al e ), t h e n t h e r e s p e c t i v e s y s-t e m s u p p l i e r s w i l l f r o m t h e o u t s e t c o m p e t es t r o n g l y f o r t h e c o n t r o l o f t h o s e f i r st u s e r s o f T 1.4 .6 . T h e d eg r ee o f s u b s t i t u t a b i l i t y i s i t s e l f a n end o g e n o u s v a r i a b l e

I n t e c h n o l o g i c a l c o m p e t i t i o n m o d e l s , e s p e -c i a ll y w h e n d i f f e r e n t s t a n d a r d s a r e c o m p e t i n g f o rr e c o g n i t i o n , t h e s u b s t i t u t a b i l i t y f a c t o r i s f u n d a -m e n t a l : t h e t w o r i v a l s y s te m s , T 1 a n d T 2 , a r ea s s u m e d t o b e i n t e r c h a n g e a b l e . T h i s m e a n s t h a t ,f r o m t h e s t a n d - p o i n t o f s e r v ic e s p r o v i d e d t o t h eu s e r , t h e y a r e f u l l y o r v i r t u a ll y c o m p a r a b l e . T h eu s e f u l n e s s o f th i s h y p o t h e s i s i s t h a t i t e n s u r e st h a t a r a t i o n a l u s e r a d o p t i n g o n e o r o t h e r o f t h ec o m p e t i n g s y s te m s t h e r e b y r e j e c ts t h e o t h e r a f t e rh a v i n g f i rs t c o n s i d e r e d t h e r e a l p o s s i b il it y o f p r e -f e r r i n g i t.

T h i s i s a h i g h l y r e s t r i c t i v e h y p o t h e s i s . C o n s i d e rt h e c a s e o f e le c t r ic i t y , w h i c h c a n b e g e n e r a t e d b ya n y o f s e v e r a l t e c h n o l o g i e s ( A , B , C ) . C a n i t b es a i d t h a t , i n a l l p l a c e s a n d a t a l l t i m e s , t h e f i r s tu s e r s w i l l b e c o m p e l l e d t o c h o o s e b e t w e e n c o a l -f i r e d a n d n u c l e a r g e n e r a t i o n ? O b v i o u s l y n o t . A c -c o r d i n g t o c o u n t r y a n d h i s t o r i c a l c i r c u m s t a n c e s ,t h e s e t w o t e c h n o l o g i e s m a y o r m a y n o t b e i nc o m p e t i t i o n .

A s w e h a v e s e e n , t h e f i rs t u s e r s o f d i f f e r e n ts y s t e m s c o n s t i t u t e s e p a r a t e p o p u l a t i o n s w h i c hr a r e l y o v e r l a p , a n d t h is m a y a l s o a p p l y to t h es u b s e q u e n t u s e r s . A s a g e n e r a l r u l e , w e h a v e t od e a l w i t h t e c h n o l o g i c a l s y s t e m s c o r r e s p o n d i n g t ot a r g e t p o p u l a t i o n s ( u s e r s , i n t e r m e d i a r i e s ) w h i c ha r e p a r t l y c o m m o n a n d p a r t l y s p e c i f i c . D e p e n d -i n g o n t h e e x t e n t t o w h i c h t h e s e o v e r l a p , p a r t i c u -l a r ly r e g a r d i n g t h e f i r s t- u s e r s e g m e n t s , s y s t e m sc a n d e v e l o p m o r e o r l es s in d e p e n d e n t l y o f e a c ho t h e r . M o r e o v e r , w i t h th e p a s s a g e o f ti m e , a s th ed i f f e r e n t s y s t e m s u n d e r g o t r a n s f o r m a t i o n , t h e i rr e s p e c t i v e ta r g e t p o p u l a t i o n s m a y c h a n g e i n c o n -

f i g u r a t i o n , w i t h t h e o v e r l a p p i n g p a r t s e i t h e r e x -t e n d i n g o r n a r r o w i n g . C o n s e q u e n t l y , s o m e t e c h -n o l o g i c a l sy s t e m s f i n d t h e m s e l v e s i n c o m p e t i t i o n ,w h e r e a s a t t h e t i m e o f t h e i r in t r o d u c t i o n t h i s w a so n l y m a r g i n a l l y t h e c a s e o r n o t a t a l l ( e . g . t h er a i l w a y n e t w o r k s , w h i c h a t f i r s t d e v e l o p e d i n s c a t -t e r e d r e g i o n s a n d t h e n b r a n c h e d o u t t o r e a c hp o p u l a t i o n s s e r v e d b y n e i g h b o u r s w h o t h u s b e -c a m e t h e i r r i v a l s ) . T h e o p p o s i t e t r e n d m a y a l s oo c c u r , w h e n i n it ia l ly c o m p e t i n g s y s t e m s w i t h d r a wi n t o s p e c i fi c m a r k e t s e g m e n t s t h a t h a v e c o m ei n t o e x i s t e n c e .

T h e f u n d a m e n t a l i s su e i s n o t s u b s t i t u ta b i l it y a ss u c h , b u t t h e d e g r e e t o w h i c h s y s t e m s a r e s u b s t i -t u t a b l e , a s m e a s u r e d f r o m t h e p o i n t a t w h i c h t h et a r g e t p o p u l a t i o n s o v e r l a p . I f w e l a b e l t h e t a r g e tp o p u l a t i o n o f T 1 a s P 1 ( t h e n P 2 f o r T 2 , P3 f o r T 3a n d s o o n ) , t h e d e g r e e o f s u b s t i tu t a b i l i t y is t h er a t i o o f t h e s i z e o f t h e o v e r l a p p i n g p o p u l a t i o n t ot h e t o t a l c o m b i n e d p o p u l a t i o n ( f u r t h e r a s s u m i n gt h a t t h e c o m m o n s e g m e n t o f t h e p o p u l a t i o n m a yi n n o c i r c u m s t a n c e s a d o p t a l l o r a n y t w o o f t h e s ea l t e r n a t iv e s a t t h e s a m e t im e ) . L a b e l l i n g t h e d e -g r e e o f s u b s t i tu t a b i li t y o f t h e a l t e r n a t i v e s y s te m sa s s , a n d t a k i n g i t a s a f u n c t i o n o f t i m e ( s v a r i e sw i t h t h e u n f o l d i n g o f t h e c o m p e t i t i v e r a c e ), t h e r ei s c l e a r l y a w i d e r a n g e o f p o s s i b l e s t a t e s o f e q u i -l ib r iu m . I t w i ll b e s e e n t h a t o u r p u r p o s e h e r e i s t oc o n s t r u c t m o d e l s i n w h i c h s e p a r a t e b u t p a r t l yo v e r l a p p i n g m a r k e t s e g m e n t s c a n c o - e x i st , t h ee x t e n t o f t h a t o v e r l a p p i n g v a r y i n g u n d e r t h e e f -f e c t o f t h e c o m b i n e d s t r a te g i e s o f t h e s y s t e ms u p p l i e r s i n v o l v e d .

T h e C a r m i n a t v e r s u s A l i s c o u t c o n f r o n t a t i o n i sa g o o d e x a m p l e o f t h is k i n d o f d y n a m i c s i t u a t io n ;t h e p o t e n t i a l u s e r p o p u l a t i o n s a r e n o t i d e n t i c a lb u t h a v e c o m m o n c o m p o n e n t s . T h e C a r m i n a ts y s te m c a n g u i d e d r i v e r s o v e r i n t e r - c it y r o u t e s ( a sw e l l a s i n u r b a n c o n d i t i o n s ) , w h e r e a s A l i s c o u t i si n t h e f i r s t p l a c e ( i .e . f r o m t h e p o i n t o f v i e w o f it sf i r st u s e r s ) n e c e s s a r i l y f o c u s e d o n d r i v i n g in t o w n s .W e c a n t h u s p o s t u l a t e d e v e l o p m e n t p r o c e s s e st h a t a r e i n p a r t u n r e l a t e d e v e n i f, i n s o m e c i r c u m -s t a n c e s a n d f o r s o m e p u r p o s e s , t h e t w o s y s te m se m e r g e a s c o m p e t i n g a l t e r n a t i v e s . F u r t h e r m o r e ,t h e C a r m i n a t u s e r p r o f i l e h a s s o m e f e a t u r e s t h a ta r e v e r y d i f f e r e n t f r o m t h a t i m p l i e d b y t h eS i e m e n s s y s t e m t e c h n o l o g y . T h e t a x i c a b d r i v e r i s


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56 F.. Mangematin, M. Callon ~Research Policy 24 1995) 441-45 8closer to the Carminat profile (which assumes adriver familiar with his environment, capable ofanticipating developments, thinking situationsthrough and even taking initiatives) than to thatof the typical Aliscout user, who acts in passiveresponse to the instructions conveyed to him andabdicates all right to choosing his own itinerary.Aliscout s target (composed of urban, robot-likedrivers) overlaps only marginally with that ofsmart , street-wise ones, with eyes turned to the

prospect of taking on long-distance holiday traf-fic, to which Carminat makes its appeal.

5 . C o n c l u s i o n s

The case study presented in this paper con-firms the importance of first users in the contextof technological competition. It shows that theidentities and choices of those first users cannotbe taken as factors external to the analysis, andsuggests a preliminary description of the mecha-nisms through which this endogenization isachieved. This difference is supported by thefollowing considerations which emerged from thestudy.

The identification and securing of the rightfirst users are matters of strategic importance forthe participants, and particularly for the suppliersof technology.- - Suppliers can often best achieve this objectiveby adjusting their system technology in line withthe specific requirements and expectations of thefirst users targeted. Technology is the principalstrategic means through which a system can ob-tain an early and decisive advantage over thecompetition.- - The emergence of the first users may lead tothe adoption of technological hybridizationstrategies, leading eventually to a non-competi-tive situation.- - The influence of the first users on the unfold-ing of the competitive struggle between two rivaltechnological systems is not solely determined bytheir number (this influencing the decisions ofsubsequent users). It also depends on the extentto which they are representative of establishedsocial networks. Thus, the recruiting of certain

first users automatically ensures the support ofthe population they represent.- - The relative influence of the first users, andthe force of the processes of irreversibility set intrain, may further depend on the nature of thefactors of increasing returns to adoption (IRA)on which the rival systems rely (economies ofscale, network externalities, learning processes).The competing sponsors will tend to adapt theirstrategies in consequence.- - The degree of substitutability of the rival sys-tems, defined in terms of the overlap betweentarget populations, may vary with the advance-ment of the competition depending of the mor-phology of the various social networks mobilizedby the users enroled. For example, when thatdegree is only marginal in the early competitivephase, the first-user incidence is smaller than thatof subsequent users.- - Standardization is only one of the means de-ployed by participants in pursuit of their IRAstrategies, and is thus not in itself a determiningissue: it must be seen as a part of the technologi-cal competition, which is itself a part of thestrategic games of the interested parties.

If asked to sum up in a few words the burdenof our criticisms of the technological competitionmodels, we would draw attention to an internalcontradiction. On the one hand, these modelsacknowledge the importance of the time factor,noting that the impacts of decisions greatly de-pend on the time at which they are made. On theother hand, they tend to ignore the events occur-ring in the course of the technological designphase and to deny that these have any effect onthe competitive phase as such. We can get rid ofthis contradiction merely by applying the findingsof the social studies of technology, and bringingthe first decisions (designing, early adoption)more explicitly into the model. Economics thenshows us how to analyse irreversibility processesand to understand the multiplicity of equilibri-ums, while sociology helps us to unravel thestrategies through which some participants shapetechnology in order to use it as a means ofprocuring a durable advantage. The choice offirst users is a stage in a strategic process whoseearlier developments place upon them certain


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1I.. Mang ematin, M. C allon / Research P olicy 24 (1995) 4 41 -4 58 457

constraints which they do not fu l ly control . Thepath has no start and no end Callon, 1992b) .

6 . ReferencesA n o n y m o u s , 1 9 89 , L e x p 6 r i e n c e b e r l in o is e ( T E C , No. 95).Arth ur , A . , 1983 On com pet ing techn olog ies and h is tor ica l ly

smal l even ts : the dynamics o f cho ice under inc reas ingre tu rns (TIP work ing papers ) , S tanford Univers i ty .

Arthur , B . , 1988a , Compet ing Technology: an overv iew, in : G.Dos i e t a l . (Ed i to rs ) Technological Change and EconomicTheory (P in te r , London) .A r th u r , B . , 1 9 8 8 b , S e l f - r e in fo rc e m e n t m e c h a n i sm s in e c o -nomics , in : An derso n and A rrow (ed i to rs ) , T h e E c o n o m yas an Evolving Complex System (Addison and Wes ley ,R e a d in g , MA ) .

Arth ur , B . , 1989 , Com pet ing technolog ies , inc reas ing re tu rnsand lock-in by h is to r ica l even ts , Econom ic Journa l 114-131.Arth ur , B . , Ermoliev , Y. and Kaniovsh i, 1987 , Pa th depen -d e n c e p ro c e s s e s a n d th e e m e rg e n c e o f m a c ro s t ru c tu re ,European Journal of Operational Research 30 294-303 .

Be lcher , P . and C a t l ing , 1988 , E lec tro n ic rou te gu idance bya u to g u id e : t h e L o n d o n d e m o n s t ra t io n (Work ing paper ) .Berg , S . , 1988 , Duopoly Compat ib i l i ty s tandards with pa r t ia lscoopera t ion and s tandards leadersh ip , Information andEconomic Policy, 3 1 -4 0 .

Berg , S . , 1989 , The Produ c t ion o f Compat ib i l i ty : Technica ls tandards as co l lec t ive goods , Kyklos 42(3) 361-383.

Burr , R . , 1 987 , Soc ia l con tag ion and innova t ion : cohes ionversus s t ruc tu ra l equ iva lence , American Journal of Sociol-ogy, 92 1287-1335.

Ca l lon , M. , 198 0 , The s ta te and technolog ica l innova t ion : acase s tudy of the e lec tr ica l veh ic le in France , ResearchPolicy, 9 358-376 .

Ca l lon , M . , 1986 , Som e e lem ents fo r a soc io logy of t rans la -t ion : domes t ica t ion o f the sca l lops

callon 1995 technological competition and strategies of firms

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