Modeling short- and long-term dynamics in the commercialization of technical advances in IT producing industries

Manufacturing industries in the IT sector, which are characterized by very low inertia, rapid technological change, and swift technological obsolescence, are a vivid example of how the rapid and effective commercialization of technical advances is critical to the success of high-technology industries. Radical or breakthrough technologies have both short- and long-term impacts. This paper argues that classical technology diffusion modeling approaches fail to give a fully dynamic picture of technology adoption in an industry, and do not adequately capture dynamic transients caused by short-term trends and the effect of individual technical changes. It then demonstrates the usefulness of the system dynamics approach in modeling the long-term system behavior of the commercialization process arising from the dynamic transients caused by short-term trends and rare events in IT producing industries. Capturing such dynamic transients is critically important because the commercialization process is ultimately shaped by individual decisionmakers making the strategic investment decisions within an industry operating in a particular short-term context. Copyright (C) 1999 John Wiley & Sons, Ltd.