Uncertainty, path dependency and ‘lock in’
It has also been emphasised that innovative firms need to consider the potential problems that ‘path dependency’ may create (Arthur 1994).
For instance, if a firm selects a specific innovation path at a very early stage, it may (if it is lucky) enjoy ‘first mover’ advantages. But it also risks being ‘locked in’ to this specific path through various self-reinforcing effects.
If in the end it turns out that there actually existed a superior path, which some other firm, equipped with more patience (or luck), happened to find, the early mover may be in big trouble, because then, it is argued, it may simply be too costly or too late to switch paths.