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Technological Evolution, System Architecture and the Obsolescence of Firm Capabilities

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  • Iansiti, Marco
  • Khanna, Tarun

Abstract

We present a historical study of technological evolution in the mainframe computer industry. We show that the pattern of innovation in the industry is not well characterized by existing models. The incremental evolution of mainframe system performance as seen by the customer was the result of an aggregation that masked substantial discontinuities at the component level. New technological concepts led to the frequent obsolescence of existing capabilities, despite the stability of customer needs and the persistence of a dominant design. The nature of our observations is captured in a simple critical path model of technological evolution. Our conceptualization sheds light on the dynamics of the evolution of the capability base of firms in an environment characterized by complex products and rapid technological change. Copyright 1995 by Oxford University Press.

Suggested Citation

  • Iansiti, Marco & Khanna, Tarun, 1995. "Technological Evolution, System Architecture and the Obsolescence of Firm Capabilities," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 4(2), pages 333-361.
    • Handle: RePEc:oup:indcch:v:4:y:1995:i:2:p:333-61
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    Cited by:

    1. Lee, Jaegul & Berente, Nicholas, 2013. "The era of incremental change in the technology innovation life cycle: An analysis of the automotive emission control industry," Research Policy, Elsevier, vol. 42(8), pages 1469-1481.
    2. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2017. "Innovations, growth and participation in advanced economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 14(2), pages 293-351, April.
    3. Barnett, William P. & McKendrick, David, 2001. "The Organizational Evolution of Global Technological Competition," Research Papers 1682, Stanford University, Graduate School of Business.
    4. Hubert Gatignon & Michael L. Tushman & Wendy Smith & Philip Anderson, 2002. "A Structural Approach to Assessing Innovation: Construct Development of Innovation Locus, Type, and Characteristics," Management Science, INFORMS, vol. 48(9), pages 1103-1122, September.
    5. Murmann, Johann Peter & Frenken, Koen, 2006. "Toward a systematic framework for research on dominant designs, technological innovations, and industrial change," Research Policy, Elsevier, vol. 35(7), pages 925-952, September.
    6. Sobrero, Maurizio & Roberts, Edward B., 2002. "Strategic management of supplier-manufacturer relations in new product development," Research Policy, Elsevier, vol. 31(1), pages 159-182, January.
    7. William P. Barnett & John Freeman, 2001. "Too Much of a Good Thing? Product Proliferation and Organizational Failure," Organization Science, INFORMS, vol. 12(5), pages 539-558, October.
    8. Marco Iansiti, 2000. "How the Incumbent Can Win: Managing Technological Transitions in the Semiconductor Industry," Management Science, INFORMS, vol. 46(2), pages 169-185, February.
    9. Hobday, Mike, 1998. "Product complexity, innovation and industrial organisation," Research Policy, Elsevier, vol. 26(6), pages 689-710, February.
    10. Etienne Montaigne & Alfredo Coelho & Samson Zadmehran, 2021. "A Comprehensive Economic Examination and Prospects on Innovation in New Grapevine Varieties Dealing with Global Warming and Fungal Diseases," Sustainability, MDPI, vol. 13(23), pages 1-24, November.
    11. Etienne Montaigne & Alfredo Coelho & Samson Zadmehran, 2021. "A comprehensive economic examination and prospects on innovation in new grapevine varieties dealing with global warming and fungal diseases," Post-Print hal-03461901, HAL.
    12. Kristina McElheran, 2015. "Do Market Leaders Lead in Business Process Innovation? The Case(s) of E-business Adoption," Management Science, INFORMS, vol. 61(6), pages 1197-1216, June.
    13. Iansiti, Marco, 1997. "From technological potential to product performance: an empirical analysis," Research Policy, Elsevier, vol. 26(3), pages 345-365, October.
    14. Gries, T. & Grundmann, R. & Palnau, I. & Redlin, M., 2015. "Does technological change drive inclusive industrialization? : A review of major concepts and findings," MERIT Working Papers 2015-044, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    15. Fabiano Schivardi & Martin Schneider, 2008. "Strategic Experimentation and Disruptive Technological Change," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 386-412, April.
    16. Wang, Q. & von Tunzelmann, N., 2000. "Complexity and the functions of the firm: breadth and depth," Research Policy, Elsevier, vol. 29(7-8), pages 805-818, August.
    17. Khanna, Tarun, 1995. "Racing behavior technological evolution in the high-end computer industry," Research Policy, Elsevier, vol. 24(6), pages 933-958, November.

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