Multigeneration Innovation Diffusion: The Impact of Intergeneration Time

Abstract

This research focuses on the diffusion patterns of the adjacent generations of technology and its relation to the time that elapses between them (intergeneration time). The authors analyze 45 new technologies in 15 industries and find that the adoption curves systematically vary across generations from 2 years for dynamic random-access memory (DRAM) chips to more than 30 years for steelmaking. The longer the intergeneration time, the slower the adoption of the subsequent technology. Even though once the adoption begins imitation is greater for subsequent technologies, the slow initial innovation rate, driven by resistance to upgrading, retards adoption. The authors also demonstrate that predictions based on intergeneration time plus average patterns are more accurate than data-based predictions early in life cycles when such predictions are most crucial. Improved early predictions can provide advantages in terms of both making go versus no-go decisions and planning marketing and production.