The main idea behind the concept of leapfrogging is that small and incremental innovations lead a dominant firm to stay ahead.
[2] In the field of industrial organization (IO), the main work on leapfrogging was developed by Fudenberg, Gilbert, Stiglitz and Tirole[3] (1983).
Brezis and Krugman (1993,[6] 1997[7]) suggest a mechanism that explains this pattern of "leapfrogging" as a response to occasional major changes in technology.
In times of small and incremental technological change, increasing returns to scale tend to accentuate economic leadership.
However, at times of a radical innovation and major technological breakthrough, economic leadership, since it also implies high wages, can deter the adoption of new ideas in the most advanced countries.
In consequence, when a radical innovation occurs, it does not initially seem to be an improvement for leading nations, given their extensive experience with older technologies.
Brezis and Krugman have applied this theory of leapfrogging to the field of geography, and explain why leading cities are often overtaken by upstart metropolitan areas.
The changes to technological leadership can reveal the challenges concerning the effects of backwardness on the willingness to innovate or adopt radical and new ideas.
[18]: 4 Although China was a latecomer to e-Commerce in comparison to other major economies, it has now grown beyond them in both total market size and on a per capita basis.
It may also be initiated intentionally, e.g. by policies promoting the installation of WiFi and free computers in poor urban areas.
[19] The Reut Institute has carried out extensive research regarding the common denominators of all the different countries that have successfully 'leapt' in recent years.