Technological innovations of hidden champions: Evidence from patent data

Lampe, Hannes W.; Block, Jö n; Willeke, Tom; Clauss, Thomas; S einme z, Holge
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Technological inno a ions o hidden champions: E idence
om pa en da a
Jou nal o P oduc Inno a ion Managemen
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Sugges ed Ci a ion: Lampe, Hannes W.; Block, Jö n; Willeke, Tom; Clauss, Thomas; S einme z, Holge
(2024) : Technological inno a ions o hidden champions: E idence om pa en da a, Jou nal o
P oduc Inno a ion Managemen , ISSN 1540-5885, Wiley, Hoboken, NJ, Vol. 42, Iss. 3, pp. 502-527,
h ps://doi.o g/10.1111/jpim.12766
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ORIGINAL ARTICLE
Technological inno a ions o hidden champions: E idence
om pa en da a
Hannes W. Lampe
1,2,3
| Jö n Block
4,5,6
| Tom Willeke
4
|
Thomas Clauss
6,7
| Holge S einme z
4
1
Capgemini In en , B emen, Ge many
2
Technical Uni e si y Hambu g,
Hambu g, Ge many
3
Vienna Uni e si y o Economics and
Business, Vienna, Aus ia
4
Uni e si y o T ie , T ie , Ge many
5
Jönköping In e na ional Business School,
Jönköping, Sweden
6
Uni e si y o Wi en/He decke, Wi en,
Ge many
7
Uni e si y o Sou he n Denma k,
Odense, Denma k
Co espondence
Jö n Block, Facul y o Managemen ,
Uni e si y o T ie , Uni e si ae s ing
15, 54296, T ie , Ge many.
Email: [email p o ec ed]
Associa e Edi o : And ea O danini
Abs ac
The hidden champion concep has ecei ed much in e es in p ac ice. As ma -
ke leade s in niche ma ke s, hidden champions ep esen he success o he
(Ge man) Mi els and. Inno a ion is a key elemen o hei s a egy and hei
ocus and niche ma ke s a egy a e associa ed wi h speci ic echnological
capabili ies. Howe e , hus a , li le quan i a i e empi ical e idence exis s
abou he inno a ion ou pu o hidden champions. D awing on a capabili y
pe spec i e and using pa en da a, he p esen s udy analyzes di e ences
be ween hidden champions and compa able non-hidden champion i ms in
hei echnological inno a ion. Ou esul s show ha hidden champions ha e
a signi ican ly la ge echnological inno a ion ou pu bu do no ha e a highe
e iciency in hei inno a ion c ea ion compa ed o o he i ms om he same
indus y, size, and age. Mo eo e , he inno a ions p oduced by hidden cham-
pions show highe le els o echnological dep h and indica e lowe le els o
echnological b ead h. The sou ces o echnological knowledge o hidden
champions seem o be mo e inwa d o ien ed. Finally, inno a ions o hidden
champions ha e simila echnological impac , no el y and quali y compa ed o
hose o o he i ms. O e all, ou s udy suppo s many o he anecdo al belie s
abou he inno a ion o hidden champions con ibu ing o a be e unde -
s anding o wha makes hidden champions di e en om o he Mi els and
i ms. P ac ical implica ions o hidden champions and Mi els and i ms a e
discussed.
KEYWORDS
capabili ies, hidden champions, Mi els and, niche en ep eneu ship, pa en s
1|INTRODUCTION
The Mi els and en ep eneu ship inno a ion model has
been desc ibed as an an i hesis o he Silicon Valley
model o en ep eneu ship and inno a ion (De Massis
All au ho s con ibu ed equally.
Recei ed: 24 Augus 2022 Re ised: 26 June 2024 Accep ed: 16 Sep embe 2024
DOI: 10.1111/jpim.12766
This is an open access a icle unde he e ms o he C ea i e Commons A ibu ion-NonComme cial License, which pe mi s use, dis ibu ion and ep oduc ion in any
medium, p o ided he o iginal wo k is p ope ly ci ed and is no used o comme cial pu poses.
© 2024 The Au ho (s). Jou nal o P oduc Inno a ion Managemen published by Wiley Pe iodicals LLC on behal o P oduc De elopmen & Managemen Associa ion.
502 J P od Inno Manag. 2025;42:502–527.
wileyonlinelib a y.com/jou nal/jpim
e al., 2018; Pahnke & Wel e , 2019). In pa icula , hidden
champions a e ega ded as he p o o ype o success ul,
expo -o ien ed, and echnologically inno a i e Mi el-
s and i ms (Aud e sch e al., 2021; Johann e al., 2022).
The hidden champion concep was pionee ed by Simon
(1992) and desc ibes small and highly specialized (wo ld)
ma ke leade s.
1
Inno a ion is desc ibed as a co e ele-
men o he hidden champion concep and ega ded as
one o he main di e ences be ween hidden champions
and o he Mi els and i ms. Howe e , hus a , li le
quan i a i e e idence exis s on he pa icula i ies o inno-
a ion o hidden champions. Mo eo e , he li e a u e is
o en based on mo e p agma ic explana ions bu lacks a
heo e ical pe spec i e o explain he unique inno a ion
cha ac e is ics o hidden champions wi h ega d o ech-
nological inno a ion.
Ou s udy aims o close hese gaps and e ine he
inno a ion ela ed assump ions ha exis abou inno a-
ion o hidden champions in he popula managemen li -
e a u e. In pa icula , we aim o unde s and he
di e ences in echnological inno a ion ou pu s be ween
hidden champions and o he i ms om he same indus-
y and o simila size and age. Based on a capabili y pe -
spec i e (Hel a & Win e , 2011), we iden i y h ee main
capabili ies o hidden champions ha a e associa ed wi h
hei echnological inno a ion. Ou esea ch ques ion is
hus as ollows: How do hidden champions di e om
compa able o he i ms in hei echnological inno a ion
ou pu s?
To analyze ou esea ch ques ion, we use a panel
da ase o 4677 i ms wi h 25,475 pa en applica ions
om he Ge man manu ac u ing sec o . By using pa en
applica ions as a p oxy o echnological inno a ion, we
ind ha hidden champions ha e signi ican ly la ge
inno a ion ou pu s bu a e no mo e e icien in hei
inno a ion c ea ion compa ed o o he i ms om he
same indus y, size, and age. Mo eo e , he inno a ions
p oduced by hidden champions show highe le els o
echnological dep h and lowe le els o echnological
b ead h. Inno a ion c ea ion o hidden champions seems
o be mo e inwa d o ien ed ega ding sou ces o echno-
logical knowledge, and he esul ing inno a ions show
lowe le els o no el y. Inno a ions o hidden champions
ha e simila echnological impac and quali y compa ed
o hose o o he i ms.
O e all, ou s udy suppo s many anecdo al belie s
abou hidden champions and hei inno a ion ou pu s.
The a icle con ibu es o he small bu g owing li e a u e
on hidden champions and he hidden champion concep
(e.g., Aud e sch e al., 2021; Benz e al., 2021; Johann
e al., 2022; o a summa y see Schenkenho e , 2022) and
helps o unde s and hidden champions' gene al app oach
owa d inno a ion and echnology, hei inno a ion
capabili ies, and ou pu . Mo e p ecisely, i pu s some o
he p oposi ions made by He mann Simon in his pionee -
ing and well- ecei ed books (Simon, 2009,2022) oan
empi ical es . I also ex ends he concep ual wo k o De
Massis e al. (2018), who e e o hidden champions as an
example o how Mi els and i ms can inno a e wi h lim-
i ed esou ces. Hence, ou s udy does no only e alua e
whe he hidden champions a e inno a i e o no (which
is a somewha au ological ques ion gi en he ma ke
leade ship cha ac e is ic o hidden champions) bu goes
much deepe explo ing he na u e and cha ac e is ics o
hei inno a i eness.
Fu he mo e, ou s udy con ibu es o esea ch on
capabili ies and hei impac on inno a ion ou pu s.
Based on h ee dis inc capabili ies o hidden champions
(i.e., niche ma ke ing capabili y, in e na ionaliza ion
capabili y, and in eg a i e capabili y), we p esen heo e -
ical easoning o explain how hese speci ic capabili ies,
de i ed om a concen a ed niche ma ke s a egy,
impac he p ocesses and esul s o echnological inno a-
ion. The empi ical analysis o hidden champion echno-
logical inno a ion ou pu s shows ha con a y o
dominan no ions (Teece, 2007) e en capabili ies ha
in eg a e dynamic ace s may c ea e pa h dependencies
(Sydow e al., 2009) and hinde mo e adical inno a ion.
On a mo e gene al le el, we he eby also con ibu e o
he s a egic managemen li e a u e on niche ma ke
1
Simon (2022) de ines hem as i ms ha ha e e enues below $5
billion, a e numbe one, wo o h ee in he global ma ke o numbe
one on hei con inen and ha e a low le el o public isibili y.
P ac i ione Poin s
•Manage s should ecognize he h ee key
capabili ies—niche ma ke ing, in e na ionali-
za ion, and in eg a ion— ha d i e hidden
champions' echnological inno a ion.
•Hidden champions gene a e mo e echnologi-
cal inno a ion ou pu bu wi hou using ewe
esou ces. Thei inno a ions ha e g ea e ech-
nological dep h, na owe b ead h, and ely
mo e on in e nal knowledge sou ces.
•Since hidden champions ely p ima ily on
in e nal knowledge, manage s could boos
inno a ion by p io i izing ex e nal collabo a-
ions o new echnical solu ions.
•Gi en hidden champions' ocus on echnologi-
cal dep h and specialized inno a ions, cau ion
is needed o p e en he isks o o e -
specializa ion.
LAMPE ET AL.503
s a egies (e.g., Teplensky e al., 1993; To en &
Hamme oll, 2009).
2|BACKGROUND ON HIDDEN
CHAMPIONS
2.1 |Concep and de ini ion o hidden
champions
Ge many's pos wa economic success is o en associa ed
wi h he de elopmen and success o i s medium-sized
manu ac u ing i ms— he (indus ial) Mi els and. Hid-
den champions o m a small bu impo an and highly
success ul subg oup o he Mi els and. The e m “hidden
champion” e e s o ma ke leade ship in a na ow and
speci ic niche ma ke (mos ly) unknown o he gene al
public (Aud e sch e al., 2021; Schenkenho e , 2022).
Acco ding o Po e ' (1980) gene ic compe i i e s a egies,
i ms can achie e a compe i i e ad an age h ough
(1) cos leade ship, (2) p oduc di e en ia ion, o
(3) ocus. Hidden champions pu sue a ocus s a egy,
o e ing p oduc s speci ically ailo ed o he needs o
selec ed cus ome s in na owly de ined niche ma ke s,
anging om cinema cu ains, pha maceu ical packag-
ing, unnel bo ing machines o chu ch o gans
(Simon, 1992). As ma ke leade s in niche ma ke s ( ypi-
cally B2B), hidden champions do no a ge he “a e age”
cus ome bu a he seek o o e he bes p oduc o he
mos demanding cus ome s wi h whom hey wo k closely
oge he (Massis e al., 2018; Simon, 2022). Mo eo e ,
hidden champions ha e his o ically nei he a ac ed no
sough publici y (Simon, 2009), explaining why hey a e
hidden. E en hough hey ha e hei oo s in he Ge man
con ex , hidden champions a e no only a Ge man phe-
nomenon. Resea ch has iden i ied and analyzed hidden
champions all o e he wo ld, including G eece
(Voudou is e al., 2000), Tu key (Yosun &
Ce indama , 2013), Ko ea (Kim & Kim, 2015), B i ain
(Wi , 2015), and C oa ia (Omazic & Vlaho , 2013).
The hidden champion concep has i s oo s in he
1990s and he wo ks o He mann Simon (Simon, 1992,
2009,2022). In line wi h Simon (2022), we de ine hidden
champions using wo main c i e ia. (1) Ma ke leade ship:
hidden champions should be among he op h ee
ma ke -leading i ms in he wo ld o ank i s on hei
con inen . Simon concludes ha i is some imes di icul
o de e mine he exac ma ke sha e o a i m as his
sha e depends on he pa icula ma ke de ini ion and
ma ke delinea ion used. He also s a es ha , beyond ma -
ke sha e, mo e subjec i e c i e ia, such as quali y leade -
ship, can be used o assess ma ke leade ship. Such
subjec i e c i e ia can bu do no ha e o include he
inno a i eness o a i m. (2) Fi m size: hidden champions
ha e e enues o less han i e billion Eu os.
2
2.2 |A capabili y-based iew o he
cha ac e is ics o hidden champions
Inno a ion in gene al is conside ed a c ucial cha ac e is-
ic o hidden champions (Simon, 2022; Voudou is
e al., 2000). As hidden champions ely on compe i i e
ad an ages c ea ed by o e ing high-quali y p oduc s spe-
ci ically ailo ed o he needs o selec ed cus ome s in
na owly de ined niche ma ke s, inno a ion is impo an
o he long- e m success and su i al. Hidden cham-
pions aim o be echnologically supe io and o e highe
p oduc quali y han compe i o s o jus i y hei p ice p e-
miums (Aud e sch e al., 2021; Johann e al., 2022;
Ramme & Spielkamp, 2019; Simon, 2022). They p oduce
echnologically sophis ica ed and knowledge-in ense
p oduc s, which also c ea es a s ong need o in ellec ual
p ope y (IP) p o ec ion h ough pa en s and o he IP
igh s (Schenkenho e , 2022). Besides his gene al obse -
a ion in he li e a u e, he e is li le e idence on he
na u e o echnological inno a ion in hidden champions.
Ou s udy aims o educe his gap.
As a heo e ical basis o unde s and he na u e o
echnological inno a ion o hidden champions, we ake
an o ganiza ional capabili y pe spec i e. O ganiza ional
capabili ies e e o he collec i e skills, compe encies,
and esou ces u ilized in an o ganiza ion's p ocesses o
c ea e and sus ain a compe i i e ad an age in a speci ic
indus y o ma ke (Ami & Schoemake , 1993). These
capabili ies a e di ec ed and limi ed o speci ic pu poses
(e.g., new p oduc in oduc ions) bu can be epea ed
ac oss single-use cases (Hel a & Win e , 2011). Thus,
i ms ha ha e he capabili y o de elop and in oduce
new p oduc s because o hei speci ic R&D and ma ke -
ing esou ces (e.g., human capi al, echnologies, knowl-
edge) and p ocesses can epea edly u ilize hese
capabili ies o mul iple new p oduc s. Capabili ies allow
i ms o e ec i ely u ilize hei esou ces and deli e
alue o cus ome s in a way ha is di icul o compe i-
o s o imi a e and eplica e (Hel a & Win e , 2011).
O ganiza ional capabili ies comp ise o dina y as well as
dynamic elemen s. O dina y capabili ies allow a i m o
“pe o m an ac i i y on an on-going basis using mo e o
less he same echniques on he same scale o suppo
2
Simon (2022) adds low public isibili y as a hi d c i e ion o he
ope a ional de ini ion. As his c i e ion, howe e , subjec i ely a ies
ac oss s akeholde s, he does no ope a ionalize his c i e ion. The e o e,
his c i e ion is ypically no included in he ope a ional de ini ion o
hidden champions (e.g., Ramme & Spielkamp, 2015).
504 JOURNAL OF PRODUCT INNOVATION MANAGEMENT
exis ing p oduc s and se ices o he same cus ome pop-
ula ion”(Hel a & Win e , 2011, p. 1244). These o dina y
capabili ies a e necessa y o main ain he e iciency o
ope a ions ela ed o exis ing p oduc s and se ices
(Teece, 2017). The e o e, o dina y capabili ies a e a he
s a ic in na u e (Ba e o, 2010). Dynamic capabili ies,in
con as , “help enable an en e p ise o p o i ably build
and enew esou ces, econ igu ing hem as needed o
inno a e and espond o (o b ing abou ) changes in
he ma ke and in he business en i onmen mo e gene -
ally”(Teece, 2017, p. 698). The e o e, dynamic capabili-
ies always in ol e al e ing o dina y capabili ies
(Win e , 2003) and acili a ing o ganiza ional change,
al hough no necessa ily in a adical way (Hel a &
Win e , 2011).
Based on he capabili y pe spec i e, we a gue ha he
cha ac e is ics o hidden champions cons i u e pa icula
capabili ies, which in u n a ec hei echnological inno-
a ion ou pu s (see Figu e 1). P io esea ch has
desc ibed hidden champions h ough hei niche ma ke
ocus wi h a high cus ome o ien a ion in a speci ic ield,
hei s ong in e na ional o ien a ion mi o ed in a high
pe cen age o expo s and high o eign di ec in es -
men s, and hei high e ical in eg a ion o manage and
con ol la ge pa s o hei p oduc ion p ocess and alue
chain (Aud e sch e al., 2018; Dalgic & Leeuw, 1994;
Ramme & Spielkamp, 2015; Simon, 2022; Voudou is
e al., 2000). Following p e ious esea ch on he de elop-
men o o ganiza ional capabili ies (Sha ma &
V edenbu g, 1998), such clea s a egic ocus a eas lead
o he de elopmen o speci ic capabili ies o hidden
champions ha a e deeply embedded in an o ganiza ion,
including i s ou ines, o ganiza ional amewo ks, com-
munica ion channels and p oblem-sol ing s a egies
(Da & Weick, 1984; Hende son & Cla k, 1990). This is
because s a egic choices de e mine o ganiza ional go e -
nance sys ems and s uc u es and in e ela ed in es -
men s in physical, human, and o he in angible asse s,
leading o capabili y de elopmen (A gy es, 2011;
A gy es & Liebeskind, 2002; Sch ibe & Löws ed , 2015).
Con as ing he abo e cha ac e is ics o hidden cham-
pions wi h he es ablished o ganiza ional capabili y li e -
a u e, we iden i ied h ee main o ganiza ional
capabili ies o hidden champions and adap ed hese o
he pa icula i ies o hidden champions: (1) Niche ma -
ke ing capabili y, (2) in e na ionaliza ion capabili y, and
(3) in eg a ion capabili y. In he ollowing we a gue why
each o hese h ee o ganiza ional capabili ies ma ches
he cha ac e is ics o hidden champions.
Adap ed om Day (2011), we de ine he niche ma ke -
ing capabili y o hidden champions as he abili y o c ea e
and deli e supe io cus ome alue h ough e icien
and as - esponding ma ke ing p ocesses o well de ined
(niche) ma ke s.
3
This capabili y comp ises ac i i ies
ela ed o main aining he sus ainable ma ke posi ioning
o es ablished p oduc s and hose di ec ed a es ablishing
new p oduc s (Hel a & Win e , 2011). In line wi h he
pa icula i ies o hidden champions (Ramme &
Spielkamp, 2015; Simon, 2022), his capabili y is pa icu-
la ly based on a s ong ma ke and cus ome o ien a ion
ha enables he hidden champion o sense ma ke de el-
opmen s con inuously and o be e align i s esou ces
wi h ma ke demands and speci ic cus ome needs as
compa ed o compe i o s (Day, 2011; Fang & Zou, 2009;
FIGURE 1 Theo e ical amewo k o hidden champion capabili ies and echnological inno a ion.
3
Day (2011) does only e e o ma ke ing capabili ies. Conside ing he
niche ocus o hidden champions, we speci ied his capabili y o a niche
ma ke ing capabili y o hidden champions.
LAMPE ET AL.505

Mo gan e al., 2009). Based on hidden champions in
G eece, Voudou is e al. (2000) empi ically subs an ia e
ha a close commi men o cus ome se ice is a key suc-
cess ac o o hidden champions. Thei deep ma ke
insigh s as well as s ong and close connec ions o impo -
an (B2B) cus ome s c ea e s a egic capabili ies ha
acili a e hidden champions o be a cus ome alue leade
h ough hei dis inc and compelling cus ome alue
p oposi ion and o espond o new demands in hei
es ablished ma ke s wi h new alue p oposi ions (Day &
Moo man, 2010). Fi ms wi h such s a egic ma ke ing
capabili ies “s and ou in hei abili y o con inuously
sense and ac on eme ging ends and e en s in hei
ma ke s”(Day, 2011, p. 186). The example o he hidden
champion Rose Plas ic illus a es he exis ence o hese
capabili ies in hidden champions. The i m desc ibes
i sel as “ he wo ld's No. 1 supplie o high-quali y ha d
plas ic packaging o he ooling indus y.”Thei s ong
ocus on he ooling indus y allows hem o come up
wi h high-quali y, highly cus omized, and highly inno a-
i e solu ions. The long- e m and in ensi e collabo a ion
wi h impo an cus ome s pu s hem in a good posi ion
o unde s and he needs o hei cus ome s, o con inu-
ously eac o new demands and main ain hei s ong
compe i i e posi ion.
The in e na ionaliza ion capabili y o hidden cham-
pions is he abili y o iden i y, e alua e, and (success ully)
exploi oppo uni ies ha a ise in o eign ma ke s
(Bingham e al., 2019; Ca anza o & Teyssie , 2021). In e -
na ionaliza ion equi es o e coming signi ican obs acles,
including he challenges posed by cul u al dispa i ies,
geog aphical dis ance om key ma ke s, a ia ions in
inancial and economic s uc u es, and igidi y o he
en e p ise o adap and lea n (Raymond e al., 2014). This
capabili y comp ises se e al sub-dimensions ha a e
equi ed o success ully main ain and manage expo
ela ionships and o eign subsidia ies (i.e., in e na ional
exploi a ion) as well as he ex ension o he cu en busi-
ness o new in e na ional ma ke s (in e na ional explo a-
ion) (Pinho & P ange, 2016; P ange & Ve die , 2011).
Resea ch shows ha in e na ionaliza ion capabili ies a e
de eloped h ough epea ed expe iences in in e na ional-
iza ion ha c ea e ou ines (Sapienza e al., 2006), knowl-
edge (E iksson e al., 1997), and heu is ics (i.e., bounda y
ules and how- o ules) (Bingham e al., 2019). To o e -
come he small size o he niche ma ke s in hei home
egion, hidden champions ha e o ely hea ily on in e -
na ionaliza ion (Dalgic & Leeuw, 1994) and quickly
expand hei ac i i ies on a global scale, which explains
hei in e na ional success and high expo sha es.
Because o hei high expo sha es and s ong in e -
na ional o ien a ion, hidden champions can d aw on sub-
s an ial expe iences in bo h in e na ional exploi a ion
and explo a ion ha shape hei in e na ionaliza ion
capabili ies. Aud e sch e al. (2018) ha e in es iga ed he
pa icula i ies o hidden champions wi h ega d o in e -
na ionaliza ion. As hidden champions ypically p oduce
p oduc s o p emium quali y ha equi e conside able
explana ion and se ice, hey wan o main ain con ol
and en e o eign ma ke s o en h ough equi y modes o
ma ke en y such as wholly owned subsidia ies. Conse-
quen ly, his in ense di ec engagemen in in e na ional
ma ke s subs an ially os e s he de elopmen o in e na-
ionaliza ion capabili ies. A consequen in e na ionaliza-
ion pu s hidden champions in a good posi ion o obse e
cus ome s in di e en con ex s and en i onmen s, which
is a ui ul sou ce o inno a ion ideas (Ge le , 1995;
Malecki, 2010). Many hidden champions a e, o exam-
ple, loca ed in he ci y o Taicang, which is a Ge man
hub o Mi els and i ms ac i e in China. The
Ge man hidden champions loca ed in China, inc eas-
ingly no only dis ibu e and/o p oduce hei p oduc s in
China bu also sou ce inno a ion ideas om China,
which is becoming he la ges ma ke in some indus ies.
In a simila ein, he abo e desc ibed hidden champion
Rose Plas ic has clean ooms bo h loca ed a hei head-
qua e s in Ge many and in he US. The la e is he la g-
es pha maceu ical ma ke o he wo ld, which is a
challenging bu highly p o i able indus y, whe e Rose
Plas ic is di e si ying in o.
4
The in eg a i e capabili y o hidden champions e e s
o hei abili y o e ec i ely coo dina e and con ol com-
munica ion, key ac i i ies, in es men s, and objec i es
ac oss di e en s ages o he alue chain (Hel a &
Campo-Rembado, 2016; Iansi i & Cla k, 1994). In eg a-
i e capabili ies acili a e he seamless coo dina ion o
alue c ea ion ac i i ies unde di e en ci cums ances. In
imes o li le o no change, in eg a i e capabili ies enable
g ea e con ol o e he manu ac u ing p ocess and he
quali y o p oduc s. Howe e , i changes a e equi ed o
new p oduc s a e in oduced, apid adap a ion o hese
in eg a ed sys ems is possible (Hel a & Campo-
Rembado, 2016; Li, 2005). We a gue ha o se e hei
highly demanding cus ome s wi h high quali y and cus-
omized p oduc s, hidden champions need o de elop
in eg a i e capabili ies o en esul ing om a high deg ee
o e ical in eg a ion ac oss he alue chain. Hidden
champions a e pa icula ly skep ical abou gi ing up con-
ol and independence (De Massis e al., 2018). As niche
specialis s ocusing on high quali y p oduc s, hey wan
o p ese e con ol o e he key ac i i ies in each s ep o
he alue c ea ion and alue chain (Ramme &
Spielkamp, 2015; Schenkenho e , 2022; Simon, 2022).
This ambi ion also mi o s in hidden champions s ong
4
See h ps://www. ose-medipack.us/en (accessed July 9, 2023).
506 JOURNAL OF PRODUCT INNOVATION MANAGEMENT
and holis ic leade ship oge he wi h keeping esponsibil-
i y and decision-making au ho i y in he la ge o ganiza-
ion (Voudou is e al., 2000). In s eamlining hei alue
chains, hey de elop subs an ial skills in ca ying ou
each alue c ea ion s ep and a high deg ee o speci ici y
be ween he in eg a ed s eps o he alue chain, in ensi y-
ing he deg ee o e ical in eg a ion (A gy es, 1996;
Díez-Vial, 2007). Consequen in es men in and align-
men o esou ces along he alue chain s eng hen he
de elopmen o in eg a i e capabili ies. Many hidden
champions, o example, ha e hei own machine shops
and mechanical enginee ing depa men s o epai ,
adap , and p oduce hei own machines used in he p o-
duc ion. Examples o such hidden champions a e B i a,
5
he ma ke leade in coun e op wa e il e s, and he
Baue AG,
6
a leading specialis ounda ion enginee ing
company. Based on hese h ee speci ic capabili ies o
hidden champion, we now de elop hypo heses abou
echnological inno a ion ou pu s o hidden champions.
Figu e 1links ou capabili y-based iew o hidden cham-
pions wi h he hypo heses.
3|HYPOTHESES ABOUT
TECHNOLOGICAL INNOVATION
OUTPUTS OF HIDDEN CHAMPIONS
We use he abo e-de eloped heo e ical conside a ions
abou he speci ic capabili ies o hidden champions o
hypo hesize hei pa icula i ies ega ding echnological
inno a ion ou pu s compa ed o o he non-hidden cham-
pion Mi els and i ms.
3.1 |Inno a ion e iciency
We e e o inno a ion e iciency as he quan i y o inno-
a ion ou pu in ela ion o he esou ces ha a i m
employs o achie e his ou pu . We a gue ha he speci ic
capabili ies o hidden champions os e hei inno a ion
e iciency. The close cus ome in e ac ion and s ong cus-
ome o ien a ion embedded in hei niche ma ke ing
capabili y enables hem o sense ma ke de elopmen s
quickly and o con inuously align esou ces wi h new o
adjus ed ma ke demands (Day, 2011; Fang & Zou, 2009;
Mo gan e al., 2009). Acco ding o he li e a u e on he
sou ces o inno a ion, close collabo a ion wi h cus ome s
and ca e ul obse a ion o hei needs is a ui ul sou ce
o ideas o inno a ion (Ab ell e al., 2016; Bonne &
Walke J , 2004). Thus, hidden champions a oid
unnecessa y ci cum en ions o ex ensi e ma ke sea ch
o ideas o inno a ion and highly isky and explo a i e
esea ch bu ins ead ocus hei inno a ion e o s on
ac i i ies likely o yield p edic able inno a ion ou pu
and success ul ma ke esul s. Repea ed new p oduc ini-
ia ions in hei espec i e niche ma ke ha e c ea ed
capabili ies o b ing new echnologies and p oduc s o
he ma ke e icien ly (Hel a & Win e , 2011).
Fu he mo e, hidden champion's in eg a i e capabili y
acili a es con ol o e he mos ele an pa s o he
alue chain. The e o e, hidden champions ha e subs an-
ial independence om ex e nal ac o s, and new ma ke
demands can be add essed o a signi ican deg ee by u i-
lizing in e nal esou ces and p ocesses. Consequen ly,
ine iciencies and ansac ion cos s ela ed o e ical dis-
in eg a ion a e educed. I adap a ion o inno a ion o
p oduc s and/o p ocesses is needed, apid adap a ion
o hidden champions' in eg a ed alue chains is possible
(Hel a & Campo-Rembado, 2016; Li, 2005). In line wi h
his, Simon (2022) and De Massis e al. (2018) ha e
al eady a gued ha hidden champions a e pa icula ly
e icien in hei inno a ion p ocesses.
The hidden champion Uhlmann loca ed in Lau-
pheim p o ides a good case in poin o his a gumen .
They a e he leading sys em supplie o pha maceu ical
packaging. Thei only cus ome s a e “in e na ional pha -
maceu ical g oups, gene ic manu ac u e s, and packaging
se ice p o ide s,”
7
o which hey a e a o al solu ion
p o ide o e ing e e y hing om a single sou ce. Hence,
hey de o e hei en i e inno a ion ac i i ies owa d sa is-
ying he a ying demands o his na ow, ye highly
demanding g oup o cus ome s based on esou ces and
p ocesses unde hei con ol.
Following he abo e a gumen s, hidden champions
should be mo e e icien in hei inno a ion ac i i ies,
p oducing mo e inno a ions pe employee han o he
i ms o simila size and age.
Hypo hesis 1. Hidden champions ha e a
highe inno a ion e iciency han o he i ms.
3.2 |Inwa d o ien a ion ega ding
sou ces o echnological knowledge
A i m's inwa d o ien a ion ega ding sou ces o echno-
logical knowledge cap u es he deg ee o which he ech-
nological knowledge o an inno a i e p oblem solu ion
comes om in e nal a he han ex e nal knowledge
sou ces. While hidden champions ha e a s ong ma ke
5
See h ps://www.b i a.de (accessed Ma ch 18, 2024).
6
See h ps://www.baue .de (accessed Ma ch 18, 2024).
7
See h ps://www.uhlmann.de/company/p o ile-and-o ganiza ion
(accessed July 9, 2023).
LAMPE ET AL.507
o ien a ion ega ding he ideas o inno a ion (see
hypo hesis abo e), we a gue ha hey a e a he inwa d
o ien ed ega ding he sou ces o echnological knowl-
edge needed o c ea ing he echnical solu ions. Ex e nal
inno a ion coope a ion pa ne s such as cus ome s p i-
ma ily ake he ole o idea gi e s o iden i ying unme
ma ke demands (e.g., Wes & Boge s, 2014). They do no
p o ide he echnological knowledge needed o de elop
he echnological solu ions c ea ed o mee hese
demands.
We shall a gue ha hidden champion's in eg a i e
capabili y and he ela ed bene i s o inno a ion e i-
ciency men ioned abo e will lead o a s onge inwa d
o ien a ion o hidden champions ega ding sou ces o
echnological knowledge o echnological inno a ion
han his is he case in compa able i ms. Hidden cham-
pions in eg a i e capabili y is closely associa ed wi h
hei skep icism abou gi ing up con ol and indepen-
dence. This also applies o he sou ces o echnological
knowledge. Hidden champions wan o main ain con ol
o e hei sou ces o knowledge (De Massis e al., 2018)
and do no wan o become dependen on ex e nal
sou ces o knowledge and knowledge p o ide s. Besides
he con ol a gumen , Hel a and Campo-Rembado
(2016) show ha in eg a i e capabili ies a e bene icial o
sys emic inno a ion ha equi es embedded in eg a i e
knowledge abou how o sys ema ically in eg a e di e -
en ac i i ies, capabili ies, and p oduc s along he alue
chain. Sou cing on in e nal knowledge he e o e ensu es
sys emic compa ibili y o componen s and echnologies.
In a simila ein, Kapoo (2013) a gues ha specialized
con inuous inno a ion (e.g., o adap o egula demands
o cus ome s) o en builds on p e-exis ing knowledge
embedded in an in eg a ed alue chain. Hel a and
Campo-Rembado (2016) e en bu ess ha i ms who
buil in eg a i e capabili ies in en ionally dis ega d he
po en ial bene i s o disin eg a ion and ex e nal knowl-
edge sou cing.
A good example is he Wipo ec G oup om Kaise s-
lau e n, which desc ibes i sel as a “leading global p o-
ide o in elligen weighing and inspec ion echnology.”
8
Simila o he example o he hidden champion Uhlheim
discussed in Hypo hesis 1, he i m is p oud ha hei
“in eg a ed solu ions come om ‘a single sou ce’and
ex end along he en i e alue c ea ion chain om ha d-
wa e and so wa e de elopmen o in-house p oduc ion
wi h a le el o e ical in eg a ion exceeding 85% and
a e -sales se ice.”
9
Al hough his single sou ce o hei
solu ions assumingly enhances he e iciency and acili-
a es sys emic in eg a ion o solu ions, he unde lying
in eg a i e capabili y will also cons ain hidden cham-
pions in ex e nal coope a ion and knowledge sou cing
beyond esou ces unde hei con ol. In his case, he
in eg a i e capabili y can become a liabili y, o cing hid-
den champions o ely on knowledge sou ces unde hei
con ol and making hidden champions skep ical abou
open inno a ion and inno a ion collabo a ion (Tushman
e al., 2012). They will no only a oid sha ing hei own
knowledge wi h o he i ms o ins i u ions, bu hey a e
also skep ical abou insou cing echnological knowledge
om ou side sou ces beyond hei con ol. Consequen ly,
hidden champions p ima ily ely on hei es ablished
in e nal solu ion spaces and pas echnologies when c e-
a ing new p oduc s. We hypo hesize:
Hypo hesis 2. Hidden champions ha e a
highe inwa d o ien a ion ega ding sou ces
o echnological knowledge han o he i ms.
3.3 |Inno a ion no el y and quali y
A s ong inwa d o ien a ion ega ding sou ces o echno-
logical knowledge o en goes hand in hand wi h a low
deg ee o inno a ion no el y.
We de ine a no el inno a ion as one ha has no o
li le “disce nible echnological an eceden s”(Ahuja &
Lampe , 2001, p. 535). The inno a ion is among he i s
ones o i s kind om a echnological pe spec i e.
10
No -
el y, pa icula ly ha o echnological inno a ions, has
been widely unde s ood as a ocal aspec o knowledge
c ea ion (Kaplan & Vakili, 2015; Uzzi e al., 2013). No el
inno a ions wi h cha ac e is ics subs an ially di e ing
om p e ious inno a ions ha e also been amed as
( echnologically) adical (Schoenmake s &
Duys e s, 2010)— he opposi e being inc emen al. These
adical inno a ions can change echnological pa adigms
(Nelson & Win e , 1982), c ea ing en i ely new echno-
logical ields and indus ies. Howe e , adical inno a-
ions also p esen a isky depa u e om exis ing p ac ice
(Hage, 1980). In con as , less no el o inc emen al inno-
a ions consis o mino imp o emen s in exis ing
echnologies.
8
See h ps://www.wipo ec.com/en/company/abou -us (accessed July
9, 2023).
9
See h ps://www.wipo ec.com/en/company/abou -us (accessed July
9, 2023).
10
No e ha also o he pe spec i es on inno a ion no el y exis .
Ve hoe en (2016), o example, dis inguish be ween no el y in
ecombina ion and no el y in knowledge o igin. While he la e
esembles o wha we e e o as inwa d o ien a ion ega ding sou ces o
echnological knowledge, he o me desc ibes he ex en o which i
“ ecombines componen s and p inciples o se e i s pu pose”
(Ve hoe en e al., 2016, p. 708).
508 JOURNAL OF PRODUCT INNOVATION MANAGEMENT
We a gue ha hidden champions, because o hei
niche ma ke ing and in e na ionaliza ion capabili ies, end
o pu sue echnological imp o emen s and, hus, inc e-
men al inno a ions ins ead o adical ones. A co e aspec
o hei niche ma ke ing capabili y is a close in e ac ion
wi h a na ow se o cus ome s in hei niche ma ke .
The e o e, hidden champions can quickly espond o new
ma ke demands wi h new p oblem solu ions (Day, 2011).
The eby, hey inc ease cus ome loyal y, sa is y he needs
o hei lead cus ome s, and sa egua d echnology leade -
ship (Riisalu & Leppiman, 2013; Voudou is e al., 2000).
This capabili y will likely con inuously inc ease inc emen-
al inno a ion bu may no be a o able o mo e adical
inno a ion beyond he exis ing echnological scope and
he cus ome s' expec a ions. Hidden champions do no
wan o dis up hei own ma ke s ia new echnologies
bu a he seek o main ain and p o ec hei ma ke lead-
e ship h ough inc emen al inno a ions ela ed o hei
exis ing p oduc and knowledge spaces. P e ious esea ch
has ound ha es ablished ma ke leade s o en inno a e
inc emen ally (Ch is ensen, 1997) and p oduce less no el
echnological inno a ions. This e ec will be in ensi ied
h ough hidden champion's in e na ionaliza ion capabil-
i y, which is di ec ed o exploi he in e na ional ma ke
sha e in es ablished ma ke s, p ima ily h ough wholly
owned subsidia ies (Aud e sch e al., 2018). Whe eas his
capabili y is help ul o an in e na ional expansion wi h
inc emen al inno a ion, i may e en c ea e igidi y ega d-
ing adical inno a ion ha is less compa ible wi h a ully
con olled in e na ional sales and dis ibu ion sys em.
By elying on co e concep s mani es ed in hei ech-
nological spaces, hidden champions a e hus likely o ely
mos ly on ecombining ( hei own) exis ing knowledge
a he han c ea ing en i ely new knowledge. We hypo h-
esize he ollowing:
Hypo hesis 3a. Hidden champions p oduce
inno a ions o lowe echnological no el y
han o he i ms.
On he con a y, he lowe ocus on no el y allows
hidden champions o dedica e hei esou ces and capa-
bili ies o c ea e inno a ions o highe quali y. Inno a ion
quali y is a mul idimensional concep ha comp ises a -
ious aspec s o inno a ion excellence and e ec i eness.
The li e a u e has come up wi h a wide ange o concep-
ualiza ions o e lapping o some ex en wi h ou unde -
s anding o no el y (H3a) and echnological impac (H5).
Higham e al. (2021) p o ide a comp ehensi e o e iew.
In ou s udy, we e e o a pa icula aspec o inno a ion
quali y. This aspec is o en e e ed o as one o he cha -
ac e is ics o success o hidden champions and conce ns
he unc ional e iciency and ope abili y o he
inno a ion. Tha is, he inno a ion p o ides a well-
unc ioning and igo ous solu ion o a ele an echnical
p oblem. Bu why a e hidden champions able o p oduce
such well- unc ioning and highly ope able inno a ions?
Hidden champion's niche ma ke ing capabili y can be
conside ed a d i e o inno a ion quali y in he sense as
desc ibed abo e. Hidden champions close in e ac ions
wi h hei es ablished cus ome s acili a es ha eal and
impo an cus ome p oblems a e iden i ied and ully
unde s ood be o e inno a ion concep s a e ealized. This
in e ac ion may con inue om he ini ial idea phase o e
he concep de elopmen o he ma ke en y o a new
p oduc . Consequen ly, he niche ma ke ing capabili y
educes he likelihood ha solu ions and concep s o low
inno a ion quali y a e c ea ed. Such high inno a ion qual-
i y is also needed om a ma ke pe spec i e, as hidden
champions aim o high s anda ds in p oduc quali y and
canno a o d o p oduce low-quali y inno a ions ha do
no wo k. Besides ha , as his capabili y is di ec ed o na -
ow niche ma ke s and a limi ed echnological domain,
hidden champions ha e a de ailed unde s anding o ech-
nologies and po en ial solu ions. This u he educes he
isk ha inno a ion by hidden champions ails due o
echnical and/o ma ke demand- ela ed easons.
Nex o hei niche ma ke ing capabili y also hei in e-
g a i e capabili y helps hidden champions o de elop inno-
a ions o high quali y. By being in con ol o he alue
chain and he di e en elemen s o he inno a ion p ocess,
hidden champions a e in a good posi ion o de elop inno-
a ions o high quali y and echnical s anda ds.
Based on hidden champions niche ma ke ing and
in eg a i e capabili ies, we expec hem o p oduce inno-
a ions o high echnological quali y. We o mula e he
ollowing hypo hesis:
Hypo hesis 3b. Hidden champions p oduce
inno a ions o highe echnological quali y
han o he i ms.
3.4 |Inno a ion dep h and b ead h
P io esea ch has s essed he impo ance o dis inguishing
be ween he b ead h and dep h o a i m's echnological
inno a ion po olio (Aha onson & Schilling, 2016;Xu,2015;
Zhou & Li, 2012). B ead h is de ined as he ange o echno-
logical ields in which a i m is ep esen ed, and dep h e e s
o he amoun o echnological knowledge wi hin a echno-
logical ield (Lau sen & Sal e , 2006;Xu,2015).
We a gue ha all h ee speci ic capabili ies o hidden
champions a e associa ed wi h a g ea e inno a ion dep h
bu educed inno a ion b ead h as compa ed o o he i ms.
Fi s and o emos , hidden champion's in eg a i e capabili y
LAMPE ET AL.509
compa ed o o he Mi els and i ms. The esul s in
Table 4 u he con i m H2 (β=0.101, p< 0.01): a
highe inwa d o ien a ion ega ding sou ces o echno-
logical knowledge is associa ed wi h hidden champions'
inno a ions and a highe echnological dep h (H4a,
β=0.005, p< 0.01). The weakly suppo ed H4b in Model
5.2 (lowe echnological b ead h) was no suppo ed by
ou obus ness analysis.
As an addi ional obus ness es , we a ied ou no -
el y measu e, ollowing Jung and Lee (2016). This a ied
TABLE 3 Es ima ion esul s (H2–H5).
Theo e ical
cons uc
Inwa d
o ien a ion o
sou ces o ech.
knowledge
Inno a ion no el y and
quali y Inno a ion dep h and b ead h Technological
impac
Hypo hesis H2 H3a H3b H4a H4b H5
Dependen
a iable
Sel -ci a ions
pe pa en
applica ions
Backwa d
ci a ions pe
pa en
applica ions
G an ed
pa en s pe
pa en
applica ions
Technological
dep h pe
pa en
applica ions
Technological
b ead h pe
pa en
applica ions
Fo wa d
ci a ions pe
pa en
applica ions
Model (3) (4.1) (4.2) (5.1) (5.2) (6)
Hidden champion 0.188** 0.268 0.016 0.007*0.049
†
0.077
(0.050) (0.219) (0.015) (0.003) (0.026) (0.066)
Re u n o asse s 0.002
†
0.002 0.0001 0.0001 0.001 0.004
(0.001) (0.007) (0.0005) (0.0001) (0.001) (0.003)
Deb - o-equi y a io 0.00004 0.001
†
0.0001
†
0.00001
†
0.0001 0.0001
(0.0001) (0.001) (0.00004) (0.00001) (0.0001) (0.0002)
Blockholde
(dummy)
0.015 0.101 0.010 0.002 0.010 0.178*
(0.045) (0.270) (0.017) (0.003) (0.028) (0.088)
Fi m age (log) 0.068** 0.008 0.017*0.005** 0.026*0.034
(0.018) (0.102) (0.007) (0.001) (0.012) (0.032)
Fi m size (log) 0.002 0.123 0.009 0.008** 0.128** 0.064
(0.022) (0.123) (0.008) (0.001) (0.013) (0.056)
Cons an 0.076 5.384** 0.208** 0.038** 1.683** 0.713
(0.343) (1.167) (0.080) (0.012) (0.141) (0.442)
Fede al s a e
dummies (n=15)
YES YES YES YES YES YES
NACE dummies
(n=24)
YES YES YES YES YES YES
Yea dummies
(n=9)
YES YES YES YES YES YES
Technology ield
dummies (n=35)
YES YES YES YES YES YES
Fi m-yea
obse a ions
5878 5878 5878 5878 5878 5878
R
2
0.023 0.087 0.071 0.121 0.212 0.030
Adjus ed R
2
0.008 0.074 0.057 0.108 0.200 0.016
F S a is ic 212.303** 437.160** 384.833** 879.386** 578.421** 188.961**
No e: Random e ec s panel model. Robus s anda d e o s in pa en heses clus e ed a he o ganiza ional le el. Two- ailed es s. 1,580 di e en i ms, o which
397 a e hidden champions, a e included in he analysis.
†
p< 0.1.
*p< 0.05.**p< 0.01.
516 JOURNAL OF PRODUCT INNOVATION MANAGEMENT

TABLE 4 Es ima ion esul s o he obus ness es ing (H2–H4).
Theo e ical
cons uc
Auxilia y
eg ession
Inno a ion
o ien a ion Inno a ion no el y and quali y Inno a ion dep h and b ead h Technological impac
Hypo hesis H2 H3a H3b H4a H4b H5
Dependen
a iable
Pa en
applica ion
dummy
Sel -ci a ions pe
pa en
applica ions
Backwa d ci a ions
pe pa en
applica ions
G an ed pa en s
pe pa en
applica ion
Technological dep h
pe pa en
applica ions
Technological b ead h
pe pa en
applica ions
Fo wa d ci a ions pe
pa en applica ions
Model (7) (8) (9.1) (9.2) (10.1) (10.2) (11)
Hidden
champion
0.291** 0.101** 0.240 0.007 0.005** 0.010 0.081
(0.025) (0.035) (0.157) (0.011) (0.002) (0.018) (0.063)
Inno a ion
ac i i y (las
3 yea s)
1.571**
(0.020)
Re u n o asse s 0.001 0.003** 0.003 0.0002 0.0001 0.001
†
0.004
(0.001) (0.001) (0.006) (0.0004) (0.0001) (0.001) (0.003)
Deb - o-equi y
a io
0.0002** 0.00000 0.001*0.0001*0.00001*0.0001 0.00001
(0.0001) (0.0001) (0.0004) (0.00003) (0.00001) (0.0001) (0.0002)
Blockholde
(dummy)
0.020 0.001 0.048 0.011 0.003 0.015 0.167*
(0.025) (0.033) (0.187) (0.012) (0.002) (0.019) (0.083)
Fi m age (log) 0.013 0.077** 0.038 0.018** 0.005** 0.019*0.029
(0.011) (0.015) (0.079) (0.005) (0.001) (0.009) (0.028)
Fi m size (log) 0.244** 0.074** 0.092 0.002 0.005** 0.092** 0.108*
(0.012) (0.018) (0.104) (0.006) (0.001) (0.011) (0.050)
In e se Mill's
a io
0.264** 0.249 0.021
†
0.010** 0.143** 0.096
(0.026) (0.175) (0.012) (0.002) (0.018) (0.067)
Cons an 3.699** 0.953** 6.383** 0.101 0.003 1.324** 1.124**
(0.113) (0.278) (1.158) (0.076) (0.012) (0.137) (0.429)
Fede al s a e
dummies
(n=15)
YES YES YES YES YES YES YES
NACE dummies
(n=24)
YES YES YES YES YES YES YES
Yea dummies
(n=9)
YES YES YES YES YES YES YES
(Con inues)
LAMPE ET AL.517
TABLE 4 (Con inued)
Theo e ical
cons uc
Auxilia y
eg ession
Inno a ion
o ien a ion Inno a ion no el y and quali y Inno a ion dep h and b ead h Technological impac
Hypo hesis H2 H3a H3b H4a H4b H5
Dependen
a iable
Pa en
applica ion
dummy
Sel -ci a ions pe
pa en
applica ions
Backwa d ci a ions
pe pa en
applica ions
G an ed pa en s
pe pa en
applica ion
Technological dep h
pe pa en
applica ions
Technological b ead h
pe pa en
applica ions
Fo wa d ci a ions pe
pa en applica ions
Model (7) (8) (9.1) (9.2) (10.1) (10.2) (11)
Technology
ield dummies
(n=35)
NO YES YES YES YES YES YES
Fi m-yea
obse a ions
41,217 5,878 5,878 5,878 5,878 5,878 5,878
R
2
0.071 0.100 0.072 0.157 0.136 0.035
Adjus ed R
2
0.057 0.087 0.058 0.144 0.123 0.020
Residual S d.
e o
1.057 5.324 0.361 0.070 0.582 2.146
F S a is ic 5.028** 7.349** 5.115** 12.211** 10.391** 2.384**
No e: Random e ec s panel model. Robus s anda d e o s in pa en heses clus e ed a he o ganiza ional le el. Two- ailed es s.
†
p< 0.1.
*p< 0.05.**p< 0.01.
518 JOURNAL OF PRODUCT INNOVATION MANAGEMENT
no el y measu e (pa h-b eaking no el y) uses echnology
classes o build a dummy, indica ing he incidence o he
i s combina ion o wo subclasses. As wi h he o he
no el y measu e, no signi ican e ec s we e obse ed.
Table 5gi es an o e iew o he esul s o all
analyses.
6|DISCUSSION AND
CONCLUSIONS
6.1 |Main esul s
The objec i e o his s udy was o es se e al hypo heses
abou hidden champions' echnological inno a ion ou -
pu s de i ed om a capabili y pe spec i e. Based on a
no el da ase combining i m- and pa en -le el da a, ou
esul s show ha (as expec ed) hidden champions ha e
signi ican ly highe inno a ion ou pu s. Ye , hey a e no
mo e e icien ega ding inno a ion compa ed o o he
Mi els and i ms om he same indus y, size, and age.
The sou ces o echnological knowledge o hidden cham-
pions seem o be mo e inwa d-o ien ed, as indica ed by
he highe numbe o sel -ci a ions. The esul ing inno a-
ions o hidden champions ha e simila no el y and qual-
i y as compa ed o hose o o he i ms. Mo eo e , he
inno a ions p oduced by hidden champions show highe
le els o echnological dep h and indica e lowe le els o
echnological b ead h. Finally, we ind no di e ence in
he echnological impac o inno a ions by hidden cham-
pions and o he i ms.
6.2 |Con ibu ions o he li e a u e
Ou indings make wo ele an con ibu ions o he li e -
a u e. Fi s , we con ibu e o a be e unde s anding o
he pa icula i ies o echnological inno a ion ou pu s by
hidden champions. Second, we con ibu e o he dis-
cou se on he e ec s o capabili ies o inno a ion by
highligh ing he po en ial ad e se e ec s o (o e ly) spec-
i ied capabili ies esul ing om he pu sui o niche ma -
ke s a egies.
The esul s ega ding inno a ion quan i y, echnologi-
cal dep h (b ead h) as well as inwa d o ien a ion ega d-
ing sou ces o echnological knowledge a e in line wi h
he quali a i e and anecdo al e idence o he cha ac e is-
ics o hidden champions pu o h by Simon (1992,2009,
2022) and aken up by he schola ly communi y
(Aud e sch e al., 2021; Benz e al., 2021; Johann
e al., 2022; Schenkenho e , 2022). In his ega d, ou
s udy inc eases he unde s anding and p o ides obus
e idence o wha cons i u es inno a ion in success ul
niche ma ke en ep eneu ship— he an i hesis o he Sil-
icon Valley en ep eneu ship model (Lehmann
e al., 2019; Pahnke & Wel e , 2019).
In line wi h he gene al assump ion in p io li e a-
u e, ou esul s show ha hidden champions indeed
ha e a highe inno a ion quan i y as measu ed by he
absolu e numbe o pa en applica ions. Howe e , in con-
as o a gumen s aised in p io esea ch (De Massis
e al., 2018; Ramme & Spielkamp, 2015), hidden cham-
pions we e no ound o show a highe inno a ion e i-
ciency as measu ed by he numbe o pa en applica ions
TABLE 5 O e iew o hypo heses, heo e ical cons uc s, measu emen , and esul s.
Hypo hesis Theo e ical cons uc Measu emen S a us
Main
analysis
Robus ness
es
H1 Inno a ion e iciency Pa en applica ions pe employee No
suppo ed
0.009 -
H2 Inwa d o ien a ion ega ding
sou ces o echnological knowledge
Sel -ci a ions pe pa en applica ions Suppo ed 0.188** 0.101**
H3a Inno a ion no el y Backwa d ci a ions pe pa en
applica ions
No
suppo ed
0.268 0.240
H3b Inno a ion quali y G an ed pa en s pe pa en applica ions No
suppo ed
0.016 0.007
H4a Inno a ion dep h Technological dep h pe pa en
applica ions
Suppo ed 0.007*0.005**
H4b Inno a ion b ead h Technological b ead h pe pa en
applica ions
(Weakly)
Suppo ed
0.049
†
0.010
H5 Technological impac Fo wa d ci a ions pe pa en
applica ions
No
suppo ed
0.077 0.081
†
p< 0.1.
*p< 0.05.**p< 0.01.
LAMPE ET AL.519
pe employee. This is a su p ising esul , as inno a ion
e iciency esul ing om a ocused s a egy is o en ci ed
as one o he main easons o hidden champion's supe-
io pe o mance. This inding can be explained by he
addi ional esou ces needed o achie e echnological
leade ship ha educe he p oduc i i y ad an ages o a
ocused niche ma ke inno a ion s a egy. In con as o
ou hypo heses, inno a ion quali y and echnological
impac we e no ound o be di e en o hidden cham-
pions. The inno a ion quali y and echnological impac
was nei he highe no was i lowe o hidden cham-
pions as compa ed o o he Mi els and i ms o he same
size, age, and indus y. This inding is no in line wi h
ou hypo heses, whe e we desc ibed hidden champions
as i ms ha a e somewha caugh in he inno a o 's
dilemma (Ch is ensen, 1997) p oducing inc emen al
(i.e., inno a ions wi h low no el y) inno a ions o high
quali y bu wi h low dis up i e po en ial. Ye , i is also
no co esponding o he success s o ies abou hidden
champions in he public media. I seems ha
hidden champions a e su p isingly unspec acula and
“no mal”in his ega d. They seem nei he o build hei
niche ma ke leade ship on high quali y bu low echno-
logical impac inno a ions no on low quali y bu high
echnological impac inno a ions. O e all, hidden cham-
pions a e able o achie e a highe inno a ion ou pu bu
do no di e om o he i ms ega ding he na u e and
cha ac e is ics o his ou pu . The di e ences be ween
hidden champions and o he i ms exis mo e in he
dep h and inwa d o ien a ion o he echnological knowl-
edge leading o hese inno a ion ou pu s. Al hough ou
s udy does no cap u e any p ocess measu es di ec ly, his
obse a ion indica es ha he inno a ion p ocesses o
hidden champions may be di e en om hose o o he
i ms. This may cons i u e an in e es ing a ea o u u e
esea ch.
An in e es ing open poin is he di ec ion o he
ela ionship be ween inno a ion and hidden champion
s a us. Does hidden champion s a us in luence inno a-
ion beha io o does a i m's inno a ion beha io de e -
mine ma ke success and hidden champion s a us? Based
on he capabili y pe spec i e we assume ha hidden
champion-speci ic capabili ies imply ce ain inno a ion
ou pu s. Ye , he opposi e di ec ion may ce ainly also
hold ue, pa icula ly when longe ime pe iods a e con-
side ed. P io esea ch a gues ha he ela ionship
be ween inno a ion and capabili ies is dynamic and
ecip ocal (e.g., Danneels, 2002), which also applies o
hidden champions. Many hidden champions a e, in ac ,
c ea ed by in en o s wi h s ong inno a ion skills sea ch-
ing o (o e en c ea ing) niche ma ke s wi h a demand
o hei inno a ions. Fo ou da ase , which only spans a
ew yea s, we conduc ed a g ange causali y es o
examine he di ec ion o he ela ionship. The esul s
showed ha he hidden champion s a us p edic s he
amoun o pa en applica ions (p< 0.001) and no ice
e sa (p=0.472). Ye , mo e esea ch spanning longe
ime pe iods is ce ainly needed o examine his ela ion-
ship. This may be a ui ul a ea o quali a i e case s udy
esea ch analyzing in dep h he bi h and de elopmen o
selec ed hidden champions o e long ime pe iods.
Going beyond he li e a u e on hidden champions,
ou s udy is able o make a con ibu ion o esea ch on
capabili ies and hei impac s on inno a ion ou pu s.
Based on h ee dis inc capabili ies o hidden champions
(i.e., niche ma ke ing capabili y, in e na ionaliza ion
capabili y, and in eg a i e capabili y), we could p o ide
heo e ical a gumen s on why speci ic capabili ies esul -
ing om a ocused niche ma ke s a egy in luence ech-
nological inno a ion ou pu s. We he eby also ex end he
li e a u e om s a egic managemen esea ch on po en-
ial disad an ages o niche ma ke s a egies
(e.g., Teplensky e al., 1993; To en & Hamme oll, 2009).
Re lec ing upon he na u e o he capabili ies o hidden
champions, hey all inco po a e bo h o dina y and
dynamic ace s as hey a e u ilized o main ain he s a us
quo and enable he c ea ion o new p oduc s. Fo exam-
ple, an in eg a i e capabili y acili a es e icien , high-
quali y p ocesses and quick alignmen o esou ces o
quickly espond o new niche ma ke demands. This is in
line wi h he a gumen s o Hel a and Win e (2011),
who a gue ha dis inguishing he na u e o capabili ies
based on hei ou pu s may no always be possible. In
line wi h hei a gumen s, we see ha hese pa ially
dynamic capabili ies—con a y o common no ions
(Teece e al., 1997)—do no acili a e adical o dis up i e
change. E en mo e, whe eas hese capabili ies a e sui ed
o enable con inuous inno a ion in one knowledge
domain, hey may e en hinde mo e adical changes by
limi ing he inno a ion b ead h as well as he conside -
a ion o ex e nal echnological solu ions. This poin s o
po en ial ad e se e ec s o dynamic capabili ies. I hese
capabili ies a e speci ic o ce ain s a egic o ien a ions
(e.g., a ocus s a egy), hey may be e ec i e o he con-
inuous de elopmen o new p oduc s o speci ic ma -
ke s bu , a he same ime, cons i u e a po en ial ba ie
o mo e subs an ial change (e.g., i ma ke s a e dis up ed
o new undamen ally di e en echnologies eme ge).
Fo hidden champions, he isk o such pa h-dependen
pa ially dynamic capabili ies (Sydow e al., 2009) o ap-
ping in o a compe ency ap (i.e., i ms accumula e and
enhance he expe ience in hose domains o ac i i y in
which hey ha e he capabili y and concu en ly locking
hemsel es ou o o he domains) (Danneels, 2007;
Le i & Ma ch, 1988) may be excep ionally high. Ou
ini ial empi ical esul s and hese heo e ical
520 JOURNAL OF PRODUCT INNOVATION MANAGEMENT
conside a ions call o u u e esea ch ha empi ically
in es iga es ou capabili y-based amewo k o hidden
champions.
6.3 |Manage ial implica ions
The esul s o ou s udy ha e p ac ical implica ions o
owne s and manage s o inno a i e hidden champions
and Mi els and i ms. I pu s he anecdo al e idence
abou his mys i ied and some imes o e ly celeb a ed
g oup o Mi els and i ms in o pe spec i e. While hidden
champions seem o be able o p oduce a highe quan i y
o inno a ion ou pu , hey seem unable o do so wi h
ewe esou ces. Ou inding ha hidden champions
seem o be inwa d o ien ed wi h ega d o hei sou ces
o echnological knowledge compa ed o o he Mi el-
s and i ms o he same size and age and om he same
indus y can e en be in e p e ed as a weakness o hidden
champions. In a wo ld inc easingly cha ac e ized by
apid echnological de elopmen and inno a ions occu -
ing a he in e sec ions o di e en echnological ields, a
s ong echnological inwa d o ien a ion and skep icism
owa d inno a ion collabo a ion and di e en o ms and
modes o (inbound and ou bound) open inno a ion can
be dange ous and a se e e h ea o ma ke leade ship.
Hidden champions may need o c i ically e lec on
whe he hei inno a ion s a egy and p ocess may ha e
o be adap ed o a wo ld whe e inno a ion inc easingly
happens in (inno a ion) ecosys ems (G ans and &
Holge sson, 2020) and (a leas pa ially) a he bound-
a ies o echnological ields (Randle & Pisano, 2021). Pu -
suing a oo much exploi a i e inno a ion s a egy may
limi hidden champions ealizing hei inno a ion po en-
ial. Some wo ks on hidden champions ha e al eady been
conduc ed in his di ec ion. Ki ne and Zenke (2011), o
example, in es iga e he ole o knowledge angels o he
co po a e success o hidden champions. Knowledge
angels con ibu e unique expe ise o he company and
hus combine in e nal and ex e nal knowledge, which is
pa icula ly bene icial o he echnological ad an age o
hidden champions. Ga aus e al. (2016) analyze ambidex-
ous Human Resou ce Managemen sys ems using case
s udies o hidden champions. They ind ha in eg a i e
employmen p ac ices suppo he in eg a ion o knowl-
edge wi hin he o ganiza ion. Following hese ea ly
wo ks, we need mo e quali a i e and quan i a i e empi i-
cal esea ch how hidden champions can and should
adjus hei inno a ion app oach o emain compe i i e
in an inc easingly dynamic, u bulen and unce ain
wo ld o unp edic able echnological ad ancemen s.
Rela ed o his, u he esea ch could explo e he
egional knowledge spillo e s be ween hidden
champions and o he i ms in hei home egion.
Whe eas some schola s ha e a gued ha he egional
embeddedness o hidden champions is one o he co e
s a egic ad an ages o hidden champions (Benz
e al., 2021; Vonnahme & Lang, 2021), o he s ha e
claimed ha due o hei u al and pe iphe al loca ions,
hidden champions a e con on ed wi h challenging con-
di ions o success ul egional inno a ion coope a ion
because o he lack o egionally a ailable knowledge and
a ac i e collabo a ion pa ne s (Aud e sch e al., 2021;
Aud e sch & Dohse, 2007; Lang e al., 2019). Fu u e
esea ch is needed o unde s and how hidden champions
con ibu e o de eloping egional ecosys ems and clus e s
o inno a ion and ice e sa.
6.4 |Limi a ions and a enues o u he
esea ch
While ou s udy cons i u es a ho ough and obus e o
o analyze hidden champion's inno a ion ac i i ies and
cha ac e is ics, i ce ainly has limi a ions, p o iding
ui ul a enues o u he esea ch.
Fi s , he na ional con ex o Ge many may be special,
and no all o ou esul s may be ans e able o o he
coun ies. E en hough Ge many is a ho bed o hidden
champions and cons i u es a ui ul en i onmen o
hei g ow h, p io esea ch shows ha he hidden cham-
pion phenomenon also exis s in o he coun ies (Kim &
Kim, 2015; Voudou is e al., 2000; Wi , 2015). Fu u e
esea ch could build on ou s udy and analyze he inno-
a ion cha ac e is ics and capabili ies o hidden cham-
pions in o he na ional con ex s.
Ano he limi a ion conce ns he use o pa en applica-
ions as an indica o o echnological inno a ion. Hidden
champions migh no wan o pa en hei inno a ions
o sec ecy easons (Cohen e al., 2000; Lampe &
Ihl, 2021). Fo example, hey may decide no o pa en
hei p ocess inno a ions used in he p oduc ion o hose
inno a ions needed o p oduce hei own machines.
While pa en s a e gene ally conside ed a good p oxy o
echnological inno a ion, hei use omi s “so e ,”non-
echnological o ms o inno a ion, such as se ice o
business model inno a ion (Goe z & Han, 2020). Hence,
u he esea ch on hidden champion inno a ion should
explo e o he ways and p oxies o measu e inno a ion,
such as adema ks (Sandne & Block, 2011), design
igh s (G ans and, 2005), o new p oduc in oduc ions
(Zah a, 1994). This would allow esea che s o gain a
b oade and mo e holis ic iew o hidden champion
inno a ion ha ocuses no only on pa en ed echnologi-
cal inno a ion. P e ious esea ch has shown ha so e
o ms o inno a ion, such as business models o se ice
LAMPE ET AL.521

inno a ions, play an inc easingly impo an ole in alue
c ea ion and cap u e (Chesb ough, 2010; Sjödin
e al., 2020; Snihu & Wiklund, 2019).
Thi d, as no ed abo e, al hough ou s udy does no
cap u e any p ocess measu es di ec ly, ou esul s sugges
ha he inno a ion p ocesses o hidden champions may
be di e en om hose o o he i ms. This may cons i-
u e an in e es ing a ea o u u e esea ch, whe e one
could ake an explici p ocess pe spec i e on inno a ion
and compa e he na u e and cha ac e is ics o he inno-
a ion p ocess o hidden champions and o he i ms.
Me hodologically, his would equi e su ey-based,
expe imen al and/o quali a i e in e iew da a.
Fou h, a p omising a enue o u u e esea ch could
be o in es iga e he ac ual con en o he pa en and he
p o ec ed in en ions. One could use no el me hods, such
as opic modeling and o he machine lea ning-based
app oaches (Kaplan & Vakili, 2015), o analyze he pa -
icula i ies o hidden champions' inno a ion ac i i ies
u he . This ype o deepe and mo e ine-g ained
esea ch could be accompanied by quali a i e case s ud-
ies on hidden champions and hei de elopmen o e
ime. Time, and hus he ime-in a ian na u e o ou
majo independen a iable is ano he limi a ion o his
s udy, o bidding he es ima ion and es ing o ixed
e ec s models. Fu u e esea ch could de elop and subse-
quen ly use ime- a ian hidden champion-measu es.
Finally, he hidden champion concep and pa icu-
la ly i s measu emen has clea limi a ions. In ac , one
could a gue ha he g oup o hidden champions is he -
e ogeneous and consis s o se e al subg oups o hidden
champions. As discussed in he backg ound sec ion on
hidden champions abo e, di e en ypes o ma ke lead-
e ship exis (e.g., quali a i e e sus quan i a i e o ms o
ma ke leade ship). Fu u e concep ual and empi ical
esea ch is needed o de elop mo e sophis ica ed hidden
champion axonomies ha can dis inguish be ween di -
e en ypes o hidden champions and hei ela ion o
inno a ion. Ano he ela ed di ec ion would be
o de elop a con inuous de ini ion and measu emen o
hidden champions. This way, one could un mo e sophis-
ica ed s a is ical analyses using longi udinal da ase s and
accoun o changes in he cha ac e is ics o hidden
champions o e ime, which is impossible wi h he
dicho omous de ini ion o hidden champions used in ou
s udy.
19
O e all, ou s udy con ibu es oabe e unde s anding
o inno a ion in Mi els and i ms (e.g., B inke ink, 2018;
Decke & Gün he , 2017;We ne e al.,2018). Ou indings
sugges ha a deep unde s anding o echnological p o-
cesses and a somewha inwa d o ien a ion ega ding
knowledge sou ces oge he wi h a deep unde s anding o
echnologies and ma ke s a e easons o he his o ical suc-
cess o hidden champions om he Mi els and. In conclu-
sion, we hope ha ou s udy will se e as a s a ing poin
o analyzing he unique capabili ies and ela ed inno a ion
cha ac e is ics o hidden champions and he inno a i e Mi -
els and and helps o shed some ligh on he sec e s o hei
success and he challenges hey ace in a wo ld o inc eas-
ing dynamics and unce ain y.
ACKNOWLEDGMENTS
The au ho s hank he anonymous jou nal e iewe s and
he handling edi o o help ul commen s on ea lie d a s.
P e ious e sions o he manusc ip we e also p esen ed in
semina s a he Uni e si y o Be gamo and he Uni e si y
o Mannheim. The au ho s a e g a e ul o he commen s
ecei ed by Jan-Philipp Ah ens, Ka in Hoisl, Julian Schen-
kenho e , Sil io Visma a, and Michael Woywode. Open
Access unding enabled and o ganized by P ojek DEAL.
FUNDING INFORMATION
The au ho s decla e ha no speci ic unding was ecei ed
in suppo o he esea ch.
CONFLICT OF INTEREST STATEMENT
The au ho s decla e no con lic o in e es .
DATA AVAILABILITY STATEMENT
The empi ical analysis u ilizes da a om PATSTAT
Global (2022 Au umn Edi ion) and O bis, p o ided by
Moody's. Bo h da ase s a e a ailable o pu chase a
h ps://www.moodys.com/web/en/us/capabili ies/company-
e e ence-da a/o bis.h ml, and h ps://www.epo.o g/de/
sea ching- o -pa en s/business/pa s a . The names and
loca ions o he s udy's hidden champions a e openly
accessible a h ps://os .io/eywk9/.
ETHICS STATEMENT
The au ho s ha e ead and ag eed o he Commi ee on
Publica ion E hics (COPE) in e na ional s anda ds o
au ho s.
ORCID
Hannes W. Lampe h ps://o cid.o g/0000-0003-1375-
236X
Jö n Block h ps://o cid.o g/0000-0003-4564-0346
Tom Willeke h ps://o cid.o g/0000-0003-2112-6342
Thomas Clauss h ps://o cid.o g/0000-0001-7799-6369
19
We used he Hausman es o compa e andom and ixed e ec s
models. Fo Model 1, 2, 3, and 5.2, a ixed-e ec s model was p e e ed.
Ye , due o he ime-in a ian na u e o he hidden champion a iable,
we s ill use andom e ec s models. This is ce ainly a limi a ion, which
we howe e canno o e come wi h ou da ase .
522 JOURNAL OF PRODUCT INNOVATION MANAGEMENT
Holge S einme z h ps://o cid.o g/0000-0001-5052-
4214
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