Incumbents, meanwhile, should use the transition period to up their own game-and to figure out a strategy for long-term survival.įor the past 30 years, “creative destruction” has been a source of fascination at top-tier business schools and in magazines like this one. Start-ups need to consider not just when their innovation will be viable, but also what external bottlenecks will arise. Change takes even longer when the old technology gets a boost from improvements in its own ecosystem. But if other complements are needed, then the pace of substitution will slow until those challenges are resolved. If the new technology doesn’t need a new ecosystem to support it-if it is essentially plug-and-play-then adoption can be swift. Over the past 20 years we’ve gotten very good at predicting whether a major new technology will supplant an older one-but we are still terrible at predicting when that substitution will take place. ![]() If you understand which scenario applies to you, you can better assess the threat of disruptive change-and use the authors’ insights to respond effectively. The authors describe two other possible scenarios: robust coexistence of the two technologies, and the illusion of resistance (the old technology seems competitive for some time but quickly succumbs once the new technology’s ecosystem is ready to roll). ![]() When the opposite conditions hold-the new technology’s ecosystem needs work and the old technology can capitalize on improvements in the established ecosystem-the pace of substitution is very slow ( robust resilience). For example, if the new technology is surrounded by viable complements and there’s little room to improve the old technology’s ecosystem, substitution is rapid ( creative destruction). The ecosystems of the legacy technologies matter too-they can sometimes be improved enough to prolong the life of the old technology.Īnalyzing the ecosystem dynamics in your industry can help you predict how quickly technological change will occur. Why do some transformative technologies dominate the market quickly, while others take decades to catch on? It’s a function not just of the technologies themselves, say the authors, but also of their broader ecosystems (electric cars, for example, need a network of charging stations).
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