Technology substitution and innovation adoption: The cases of imaging and mobile communication markets

Abstract

Technology substitution and innovation adoption are considered within the framework of evolutionary economy. The evolution hierarchical concepts of change, order, direction, progress and perfectibility are invoked to describe technological substitutions as processes that point towards the direction the economic system moves into, its rate of change giving the speed of change. Knowledge evolution and its appropriation into technological innovation are key ingredients in enhancing competition among technologies struggling towards capturing the other's market shares. We accordingly mathematically translate these evolutionary views into practice using Lotka–Volterra prey–predator model for competition and single logistic growth for the market evolution of the competing innovation. Using this formulation we studied the technological substitution of analog by digital imaging process and demonstrate how the later has disruptively displaced the former. Considering its vital importance to managing market strategies towards innovation products adoption, we redefine the takeoff time with a more realistic accounting of the innovation product adoption by consumers that is easily computed from its launching phase sales data. Our takeoff time is found to occur earlier than the one usually adopted. The new formulation is successfully tested against the consolidated innovation adoption of two economically impacting technological innovations: digital cameras and mobile phones.