Finding uses for an invention beyond its initial imagined function is a pathway to innovation that has a long and storied history. Of particular interest to innovation scholars is the extent to which finding new applications for inventions is a process of serendipitous discovery as opposed to careful and systematic theory driven search. We distinguish between the propensity of an individual project to lead to a new market application with the aggregate number of new market applications explored using the same underlying invention to delineate between pure serendipity as opposed to a more thorough systematic search process to uncover unexpected applications. We argue that when a new or complex invention is being tested for market application the propensity of an individual project testing a new application is low but that on aggregate more applications are likely to be sought. We thus suggest that, on average, exaptation is a more likely pathway than serendipity to finding unanticipated market applications. We find partial empirical support for our theory through an analysis of drug development projects over a span of three and a half decades, covering more than 100,000 projects in various stages of pre-clinical and clinical testing.
