Decoding Market Disruption: New Framework, Model, and Findings



The failure of firms in the face of technological change has been a topic of intense research and debate, spawning the theory (among others) of disruptive technologies. However, the theory suffers from circular definitions, inadequate empirical evidence, and lack of a predictive model. The authors develop a new framework to address these limitations. The authors test this framework with data on 37 technologies from 7 markets.  Contrary to extant theory, 1) Disruption is a rare event,2) incumbents introduce almost as many new technologies as entrants, 3) upper attacks account for as much as one third of technological entries, 4) the hazard of disruption for entrants and small firms is not different from that for incumbents and large firms repsectively, and 5) numerous rival technologies co-exist without one disrupting the other. Moreover, technology disruption is not permanent due to multiple crossings in technology performance. The authors discuss the implications of these and other findings.
Contact information:
Dr. S. Puntoni