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The Nature and Effects of Technological Change over the Industry Life Cycle - ScienceDirect
Source: sciencedirect.com
Article summary:
1. This paper examines the quality and cost innovations in the early automobile, personal computer, rigid disk drive, computer monitor, and computer printer industries.
2. The results challenge the notion that new industries experience quality innovation early on and cost innovation later on.
3. In the microelectronics industries, the rate of quality improvement does not diminish over time; in the automobile industry, even though the rate of quality improvement is highest early on, the profitability of quality advantages is highest later on.
Article analysis:
The article is generally reliable and trustworthy as it provides evidence from multiple sources to support its claims. It cites research from Huergo and Jaumandreu (2004), Filson (2001; 2002), Utterback and Suarez (1993), Klepper and Simons (2000, 2005), Cabral (2012), Rice and Galvin (2006), Agarwal and Sarkar (2002) to back up its assertions about technological change over an industry life cycle. Furthermore, it also provides a detailed explanation of how different types of innovations can evolve over firm evolutionary phases.
However, there are some potential biases in the article that should be noted. For example, it only focuses on five US industries – automobile industry, PC industry, rigid disk drive industry, computer monitor industry and computer printer industry – which may not be representative of all industries worldwide. Additionally, while it acknowledges that product innovations tend to dominate at the early stage of an industry life cycle while process innovations take over later on, it does not explore any counterarguments or alternative perspectives to this view. Finally, there is no mention of possible risks associated with technological change over an industry life cycle which could have been explored further in order to provide a more comprehensive overview of this topic.