publication . Article . Other literature type . 2001

Demand Heterogeneity and Technology Evolution: Implications for Product and Process Innovation

Adner, Ron; Levinthal, Daniel;
Open Access
  • Published: 01 May 2001 Journal: Management Science, volume 47, pages 611-628 (issn: 0025-1909, eissn: 1526-5501, Copyright policy)
  • Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Abstract
The evolution of technology has been a central issue in the strategy and organizations literature. However, the focus of much of this work has been on what is essentially the "supply side" of technical change---the evolution of firm capabilities. We present a demand-based view of technology evolution that is focused on the interaction between technology development and the demand environment in which the technology is ultimately evaluated. We develop a formal computer simulation model that explicitly considers the influence of heterogeneity in market demand---the presence of consumers with different needs and requirements---on firms' innovation choices. The mode...
Subjects
free text keywords: Technology Life Cycle, Price Evolution, Demand Heterogeneity, Supply side, Incentive, Economics, Microeconomics, Technology life cycle, Technology development, Technological evolution, Marginal utility, Process innovation
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