How do technological innovations change the patterns of their cultural diff
usion in socio-economic networks? Cellular automata enable us to show Arthu
r's (1988) model of a potential 'lock-in' of a new technology in terms of d
ominant colours on the screen. The 'lock-in' effects can be combined with l
ocal learning, network effects, and more complex dynamics. Recursive and in
teraction terms can thus be declared separately in the construction of a si
mple, but non-linear model of technological development and innovation. Thi
s enables us to specify conditions for a 'break-out' or a 'deadlock' betwee
n competing technologies. Using Axelrod's (1997) simulation model of 'cultu
ral dissemination' as another network effect, it will be shown that the cul
tural assimilation of a new technology can co-evolve with the 'lock-in' of
a dominant dominant technology. This effect can be annihilated by the furth
er development of the communication with an emerging dimension. Implication
s for technology and innovation policies will be specified.