Estimating the duration of competitive advantage from emerging technology adoption

Abstract

This paper proposes a method for estimating the expected duration of competitive advantage from emerging technology adoption for the average adopting firm. The proposed method relies on publicly available data (e.g., web search interest, news articles, book titles, and firm disclosures) and integrates elements from diffusion of innovation theory, hype cycles, and resource-based view of competitive advantage. We validate this method by applying it to two mature technologies, namely ERP and cloud computing, for which we come up with estimates consistent with findings from prior studies. Leveraging our method, researchers and professionals can use readily available data to make their own estimations. Such estimates can inform researchers in answering research questions related to duration of competitive advantage from technology adoption. They can inform professionals in making better business decisions such as forecasting the net present value of an investment in an emerging technology.