Simultaneous Versus Sequential Complementarity in the Adoption of Technological and Organizational Innovations: The Case of Innovations in the Design Sphere

It is generally suggested that technological and organizational innovations, being complementary, need to be adopted simultaneously. Nevertheless, sequential rather than simultaneous adoption of these two types of innovation may be optimal. In this paper, we analyze the pattern of mutual causation of technological and organizational innovations and contribute to the understanding of their interdependencies. By the means of a test of necessary and sufficient conditions for the presence of sequential versus simultaneous complementarity, we explore the adoption of two allegedly complementary innovations in the sphere of design, namely, computer-aided design/manufacture equipment (CAD) and inter-organizational design teams with customers and suppliers (JOD). The evidence is drowned upon a longitudinal sample of Italian manufacturing plants observed over 27 years (1970-1996). We find that simultaneous adoption of the two innovations under consideration is unlikely while the likelihood of JOD adoption increases having adopted CAD. The results highlight the driving role of technological innovations, and notably of the decline in the price of IT equipment, upon the diffusion of complementary organizational innovations.