Twinning Networks: Co-Evolution and Competition of System Component Technologies in the Local Area Network Industry
AbstractThis work analyses the evolution of the Local Area Network industry in terms of the interaction of technological and economic dimensions over time. It focuses in particular on two suppliers of LAN systems: the access technology industry and the internetworking industry. Two elements driving the evolution are identified, 1) cross-substitution among the components when costs are reduced or performance improved,and 2) the need to preserve the compatibility with existing components or technologies. The effects of these mechanisms on the dynamics of entry and exit of firms in both industries are analysed by using the Organisational Ecology approach. We find that the effects on the dynamic are different depending on the presence or absence of innovation. These mechanisms may ensure a matching between the two industries and a virtuous cycle of growth in absence of innovation. Nevertheless, when an innovation occurs in one of the two industries and the carrying capacity of the system is altered, the 'match' is disrupted and it may be difficult to re-establish a matching position, thus the virtuous cycle may turn into a 'vicious one'. An interpretation of the reasons for this mismatching is given by using the concept of 'lineage process' to describe the application of a technology in new domains and by stressing the role that elements different from adaptation and availability of resource may play in delaying the process.
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Bibliographic InfoPaper provided by SPRU - Science and Technology Policy Research, University of Sussex in its series SPRU Working Paper Series with number 31.
Length: 71 pages
Date of creation: 01 Jun 1999
Date of revision:
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local area networks; LAN; evolution; competition; innovation;
Find related papers by JEL classification:
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
- L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
- Winter, Sidney G., 1984. "Schumpeterian competition in alternative technological regimes," Journal of Economic Behavior & Organization, Elsevier, vol. 5(3-4), pages 287-320.
- Roberto Fontana & Alessandro Nuvolari & Bart Verspagen, 2009.
"Mapping technological trajectories as patent citation networks. An application to data communication standards,"
Economics of Innovation and New Technology,
Taylor & Francis Journals, vol. 18(4), pages 311-336.
- Roberto Fontana & Alessandro Nuvolari & Bart Verspagen, 2008. "Mapping Technological Trajectories as Patent Citation Networks. An application to Data Communication Standards," SPRU Working Paper Series 166, SPRU - Science and Technology Policy Research, University of Sussex.
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