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Engineering vs. craftsmanship: Innovation in the electric guitar industry (1945-1984)

Thierry Rayna, Ludmila Striukova

Technical Report
May, 2008
DIME Working Papers on Intellectual Property Rights
Issue 68

Due to its extensive usage of high-tech, the music industry is often discussed in the innovation literature. Music, however, is not only about recording; it is also about means to create music: the instruments.

When it comes to high-tech, the instrument industry is the antipodes of recording industry and most of the musical instruments are still very much the same as what they used to be centuries ago. Yet, the electric guitar industry provides a good example of a technological evolution which is both conservative and modern and the outcome of innovation in this industry greatly differs from other industries. In fact, the electric guitar represents an intense fusion between an already mature market, the guitar market, and disruptive technologies.

Since its invention, in the early 1920s, the electric guitar has been the object of a constant struggle between conservatism and innovation. Its evolution also reflects the opposition between traditional labour-intensive craftsmanship, seen as a proof of quality, and the industrialised processes required by mass production.

The two current market leaders, Fender and Gibson had an equal share of successful and failed innovations, with the best period in terms of innovation being when both Fender and Gibson based their innovations on their core competences. On the other hand, innovations that were inspired by the attempts to copy each other were bound to fail. Another reason for some of the failed innovations is companies' misunderstanding of customers needs.

This paper examines the development paths taken by the two main electric guitar manufacturers, Gibson and Fender, and explores the reasons that led to this way of development, in particular changing users' tastes and Gibson's and Fender's attempts to increase their respective market share. In addition, the rate of innovation, and the evolution of this rate, is analysed for both companies. This research is based on two detailed case studies, that provide an overview of industry development, as well as an empirical analysis of the patent statistics related to these two companies.

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