Industrial change leading to industry convergence can be observed in many industries. This is provoked by the application of new technologies across industry boundaries, changing customer structures and regulations. Convergence presents a particular context for innovation and technology management, as firms face new bodies of technological and market knowledge which may create competence gaps. This paper asks the following question: what kind of innovation strategies do players with different industry backgrounds employ to address new industry segments resulting from industry convergence? By analysing three different industry cases of convergence, this paper explores how firms in different industries address competence gaps they face by positioning themselves in a newly emerging value chain. Empirical findings indicate that the innovation strategies which firms follow in converging industries may create conflicts with existing path-dependencies. Hence, to overcome these conflicts, open innovation built on dynamic capabilities (like alliance building) plays a major role in industry convergence.
Keywords: industry convergence, innovation strategy, open innovation, path-dependencies, resource-based view, technology management