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Which factor dominates the industry evolution? A synergy analysis based on China's ICT industry

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  • Yaya Li
  • Yongli Li
  • Yulin Zhao
  • Fang Wang
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    Abstract

    Industry evolution caused by various reasons, among which technology progress driving industry development has been approved, but with the new trend of industry convergence, inter-industry convergence also plays an increasing important role. This paper plans to probe the industry synergetic evolution mechanism based on industry convergence and technology progress. Firstly, we use self-organization method and Haken Model to establish synergetic evolution equations, select technology progress and industry convergence as the key variables of industry evolution system; then use patent licensing data of china's listed ICT companies to measure industry convergence rate and apply DEA Malmquist index method to calculate technology progress level; furthermore apply simultaneous equation estimation method to investigate the synergetic industry evolution process. From 2002 to 2012, China's ICT industry develops rapidly; it has the most obvious convergence and powerful technology progress compared with other industries. We choose china's listed ICT industry to make empirical analysis. Our main findings are: a) technology progress is the order parameter which dominates industry system evolution. Moreover, industry convergence is the control parameter which is influenced by technology progress; b) Development of technology progress is the core factor for causing evolution of industry system, and industry convergence is the outcome of technology progress; c) Especially, it is important that the dominated role of technology progress will be sustained, even though in the environment of convergence, companies also need focus on self-innovation, rather than only adapt to the new industry evolution trend.

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    Paper provided by arXiv.org in its series Papers with number 1403.4305.

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    Date of creation: Mar 2014
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    Handle: RePEc:arx:papers:1403.4305

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    1. Teece, David J. & Rumelt, Richard & Dosi, Giovanni & Winter, Sidney, 1994. "Understanding corporate coherence : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 1-30, January.
    2. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
    3. Fare, Rolf & Shawna Grosskopf & Mary Norris & Zhongyang Zhang, 1994. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries," American Economic Review, American Economic Association, vol. 84(1), pages 66-83, March.
    4. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    5. Matti Karvonen & Tuomo Kassi, 2010. "Analysis of convergence in paper and printing industry," International Journal of Engineering Management and Economics, Inderscience Enterprises Ltd, vol. 1(4), pages 269-293.
    6. Matti Karvonen & Matti Lehtovaara & Tuomo Kässi, 2012. "Build-Up Of Understanding Of Technological Convergence: Evidence From Printed Intelligence Industry," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 9(03), pages 1250020-1-1.
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