Title: Identification of technological discontinuities across industries and time periods: expected vs. unexpected change

Authors: Miguel Angel Campo-Rembado, Alva H. Taylor

Addresses: Tuck School of Business at Dartmouth, 100 Tuck Hall, Hanover, NH 03755, USA. ' Tuck School of Business at Dartmouth, 100 Tuck Hall, Hanover, NH 03755, USA

Abstract: How can researchers identify technological discontinuities across multiple industries without intensive data gathering that relies on subjective interpretation of performance and product data? This empirical difficulty has long hampered research on technological change. Here we provide a methodology to identify discontinuous changes in industries that does not rely on informed guesses. Does the type of innovation activity change after the arrival of a technological discontinuity? To identify the timing and magnitude of technological discontinuities, we assume that the volume of industry activity is simultaneously determined by the level of technological discontinuity and by the opportunity cost of capital, none of which we observe. Rather than identifying technological discontinuities as binary events, we identify them as the residual or unexpected component in the volume trajectory. We assess the external validity of the measure with a detailed analysis of railroad, wireless, and computer industries, and find that the residuals that identify our discontinuities also anticipate future jumps in product performance.

Keywords: technology; innovation; industry dynamics; technological discontinuity; entrepreneurship; technological change; change management; subjective interpretation; product performance; railroad industry; railway industry; wireless industry; computer industry; expected change; unexpected change.

DOI: 10.1504/IJSCM.2009.024514

International Journal of Strategic Change Management, 2009 Vol.1 No.3, pp.269 - 292

Published online: 07 Apr 2009 *

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