Demand Driven Innovation and Uncertainty: Evidence from diffusion of flat panel TV

Author Name UNAYAMA Takashi  (KOBE University) /KEIDA Masayuki  (Risso University)
Creation Date/NO. January 2010 10-J-005
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In a case-study, we show that developing new goods is constrained by demand uncertainty. It was believed that knowing “needs” would be critical for R&D investment decisions, and thus developing new goods. However, although the need for flat panel televisions was known for many years, they were not developed for a long time. It was not a limitation of technology but demand uncertainty that prevented the innovation. The implication of this case study is that reducing uncertainty is effective in promoting innovation.