Investors and business leaders are always on the lookout for the next big thing, the paradigm shift that will upend industries and change the world. The hope is to get in early and ride the wave—or at least avoid getting flattened by it. But where should they be looking?

“There’s a huge literature on innovation,” says Amir Goldberg, associate professor of organizational behavior at Stanford Graduate School of Business. “One of the perennial debates is whether new ideas are more likely to come from established players or new entrants in a field—those in the core or on the periphery, so to speak.”

There are plenty of examples of each. “In American culture, we celebrate the plucky outsider, the maverick who bucks conventional thinking,” Goldberg says. But many game-changing innovations come from dominant firms, like the Apple iPhone or the invention of transformer architecture at Google, which revolutionized artificial intelligence.

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