Incremental by Design? On the Role of Incumbents in Technology Niches – An Evolutionary Network Analysis

In this paper, we study the evolution of governance structures in technological niches. At the case of public funded research projects and the resulting cooperation networks related to smart grid and systems in Denmark, we raise the questions which actors over time inherit a central position -- associated with high influence on the development of research trajectories -- in the network. We are particularly interested in what role incumbent actors, connected to the old regime of fossil based energy production, play in shaping future technological trajectories.The protected space theoretically created by such public research funding offers firms an environment to experiment in joint learning activities on emerging technologies, shielded from the selection pressure on open markets, thereby facilitating socio-technological transitions. Generally, the engagement of large incumbent actors in the development of emerging technologies, particularly in joint research projects with entrepreneurial ventures, is positively perceived, as their resource endowment enables them to stem large projects and bring them all the way to the market.However, growing influence of incumbents might also alter niche dynamics, making technology outcomes more incremental and adapted to the current technological regime. Potential influence on rate and direction of the technological development can to a large extend be explained by actors' positioning in the network of the niche's research activities. We create such a directed network of project consortium leaders with their partners to analyze if network dynamics of joint research projects in technological niches favor incumbent actors in a way that they are able to occupy central and dominant positions over time. To do so, We deploy a stochastic actor-oriented model of network dynamics, where we indeed discover path-dependent and cumulative effects favoring incumbents. Our findings suggest a development of the network towards an incumbent-dominated structure