Learning in a Science-driven Market: The Case of Lasers

Innovation literature centres more on technical advance and less on scientific change. In this paper the scientific basis comes under specific scrutiny. The empirical part consists of a case study of the laser market and the particularly interesting laser medicine submarket. A new measurement concept known as "technometrics" measures the quality of innovative products from their technological characteristics. It is found that in a knowledge-driven market in which "inventions are in search of a purpose", two stages of market formation can be discerned: a wasteful science-pushed, and a subsequent demand-led period. Pricing of the innovative products can be explained by a few leading characteristics, but certain providers are able to create stable demand from public knowledge with non-optimal price-performance ratios. Copyright 2000 by Oxford University Press.