Right Tech, Wrong Time

Rahul Kapoor, Management, the Wharton School, and Ron Adner, Tuck School of Business

Harvard Business Review, November 2016

Summary: Why do some transformative technologies dominate the market quickly, while others take decades to catch on? It’s a function not just of the technologies themselves, say the authors, but also of their broader ecosystems (electric cars, for example, need a network of charging stations). The ecosystems of the legacy technologies matter too — they can sometimes be improved enough to prolong the life of the old technology.

Analyzing the ecosystem dynamics in your industry can help you predict how quickly technological change will occur. For example, if the new technology is surrounded by viable complements and there’s little room to improve the old technology’s ecosystem, substitution is rapid (creative destruction). When the opposite conditions hold — the new technology’s ecosystem needs work and the old technology can capitalize on improvements in the established ecosystem — the pace of substitution is very slow (robust resilience). The authors describe two other possible scenarios: robust coexistence of the two technologies, and the illusion of resistance (the old technology seems competitive for some time but quickly succumbs once the new technology’s ecosystem is ready to roll).

If you understand which scenario applies to you, you can better assess the threat of disruptive change — and use the authors’ insights to respond effectively.

Read the full article here.