Can the telecom equipment industry afford accelerating technical advance?

While established producers throughout the telecom industry-and especially upstream equipment manufacturers-have been steadily shifting their investment mixes to support product innovation, new cash returns on those investment shifts often have been steadily declining, Are these trends linked causally, and if so, what are the implications for the industry and beyond? Our centerpiece analyses draw on the conceptual apparata of nonlinear dynamics to illustrate the evolving complexity of the relationship between escalating cost and technical advance throughout the industry since the mid-1970s. We conclude by considering the broader implications of these trends for the industry at large, (C) 1997 Published by Elsevier Science Ltd.