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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, 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. Hobday, Mike, 1998. "Product complexity, innovation and industrial organisation," Research Policy, Elsevier, vol. 26(6), pages 689-710, February.
    2. repec:kap:iecepo:v:14:y:2017:i:2:d:10.1007_s10368-016-0371-1 is not listed on IDEAS
    3. 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.
    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. Iansiti, Marco, 1997. "From technological potential to product performance: an empirical analysis," Research Policy, Elsevier, vol. 26(3), pages 345-365, October.
    6. 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.
    7. 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.
    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. Barnett, William P. & McKendrick, David, 2001. "The Organizational Evolution of Global Technological Competition," Research Papers 1682, Stanford University, Graduate School of Business.
    10. 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 044, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. 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.

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