Bootlegging and path dependency

This paper confirms the importance of path dependency in the accumulation of firm-specific technological competencies. It shows that firms are guided by the selective logic of path dependency in their innovation processes, even if management has no part in decisions to invest in a new business idea. The research focuses on the output of bootlegging, defined as research in which motivated corporate entrepreneurs pursue innovative activity, which they themselves define and secretly organise. Bootlegging emerges as an incremental continuous trial-and-error learning process in R&D and its uncertainty is no better or worse than that of ‘normal’ R&D. The fear of some managers that violation of strategic direction setting and total anarchy will ensue from bootlegging is unfounded.