Competition and the diffusion of innovations: a dynamic perspective

The article criticizes established diffusion models (Fisher-Pry, Bass, etc.) that view technological substitution as a zero-sum game and ignore the possibility of technological co-evolution. In an environment where old and new technologies coexist for extended periods, a more flexible analytical tool is required, making this a relevant approach for studying the development of innovative technologies. The paper’s objective is to propose a new, more nuanced model of innovation diffusion that challenges the paradigm of pure competition. The author introduces the concepts of “symbiotic†and “predator-prey†competition to describe the dynamics of coexistence between new and established technologies, based on the Lotka-Volterra model. This model facilitates the analysis of product generation evolution, fostering systemic strategic thinking that helps avoid excessive investment in declining businesses and identify new growth opportunities. The main conclusion of the research is that the proposed approach is particularly crucial for analyzing “breakthrough†innovations in the digital era, where product and market boundaries are blurred (e. g., the transition from physical media to streaming), and technological interaction is especially complex and dynamic. The proposed conceptual framework also allows for analyzing the specifics of technological substitution and coevolution in the context of dynamically developing markets, including the Russian market, where the coexistence of legacy and new technological solutions is of particular importance.Â