Experience-Based Learning in Innovation and Production

Abstract

How can we model and document the impact of experience in product innovation? We use data on the innovation and production histories of 294 product platforms to explore experience-based learning. We extend learning curve concepts from their traditional domain the production process into the product innovation process to build and test a richer, quantitative model of learning. The results suggest that learning occurs differently in the innovation process than in production. They also suggest that how and where a firm learns depend in part on the complexity of product components and sub-systems. Finally, we discuss the competitive implications for product innovation.