Organizing for innovation over an industry cycle

The basic hypothesis in this paper is that a gap tends to develop over an industry's evolution between potential innovators in a company and the organizational mainstream. The innovative gap is a function of the type of innovation needed for longer‐run survival and the disposition of the mainstream organization towards innovation. This hypothesis is used to predict which of four popular organizations for innovation is most suited to each stage of an idealized industry's evolution. The predicted organization set is discussed in terms of well‐known cases, and tested in an exploratory manner using executive survey data.