Components, Systems and Technological Discontinuities: Lessons from the IT Sector

Abstract

This paper describes a model that sheds light on the mechanism by which many technological discontinuities occur. The model combines three arguments: 1) incremental improvements in a system's components impact on the performance and design of systems; 2) these incremental improvements in components can lead to discontinuities in system design through their impact on the design trade-offs that are inherent in all systems; and 3) these incremental improvements in components can cause the components to become applicable to completely new systems. This paper uses the model to explain a number of technological discontinuities in the semiconductor, computer and other industries in the IT sector. A final section uses the model to think about the future of the IT and energy sectors.