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 obsolescen ce, are a vivid example of how the rapid and effective commercialization of technical advances is critical to the success of high-technology industrie s. Radical or breakthrough technologies have both short- and long-term impa cts. This paper argues that classical technology diffusion modeling approac hes fail to give a fully dynamic picture of technology adoption in an indus try, 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 s ystem behavior of the commercialization process arising from the dynamic tr ansients caused by short-term trends and rare events in IT producing indust ries. Capturing such dynamic transients is critically important because the commercialization process is ultimately shaped by individual decisionmaker s making the strategic investment decisions within an industry operating in a particular short-term context. Copyright (C) 1999 John Wiley & Sons, Ltd .