Ecosystem Uncertainty and Technology Reemergence: H1N1 Pandemic and Ayurveda Reemergence

Abstract

Ecosystems play a crucial role in technology evolution due to their ability to structure interactions between various actors, help them manage uncertainty and ensure alignment between them. But can the ecosystem also aid in the reemergence of old technology? Can an increase in the ecosystem-level uncertainty change the nature of interaction within the ecosystems and lead to technology reemergence? To answer these questions, we study how the H1N1 pandemic impacted the Indian dermatology ecosystem and its implications for traditional medication demand. We present a multi-agent model with strategic interactions between physicians and patients and show how this ecosystem-level shock changed the nature of interaction and consequently empowered patients. Based on our model, we argue that increased ecosystem uncertainty leads to increased patient information and hence physicians are likely to prescribe drugs considered safe by patients. We also argue that this benefits traditional medicine firms due to their association with the traditional medicine system and associated authenticity. We empirically test our hypothesis using the difference in difference design and find that prescriptions for Ayurveda medicines in dermatology increased post-pandemic. This increase is more pronounced for traditional manufacturers than modern medicine manufacturers, supporting our arguments that authenticity plays a significant role in technology reemergence. Our work contributes to the literature on ecosystems and how a shock to ecosystems can help older technologies to reemerge. This work also contributes to the broader literature on technology evolution and technology reemergence by bringing in how external environment changes can drive technology reemergence.