chapter  10
19 Pages

The speed of technology change and the development of market structure: semiconductors, PC software and biotechnology

WithPeter Swann, Jas Gill

This chapter summarizes a project that has examined the relationship between the speed and predictability of technology change and the development of market structure – that is, the number and sizes of participating firms. It was never such a radical innovation on its own terms as the microprocessor, and market leaders in semiconductors before the introduction of the 4K dynamic RAM (DRAM) were for the most part reasonably successful at entering the memory market. The chapter illustrates these arguments with three cases from the semiconductor industry, one from PC applications software and one from biotechnology. The microprocessor case, a components division might be responsible for some innovations (in high-performance microprocessors) and a system division for others (in single-chip microcomputers). An industry or market shows an increase in concentration if the four-firm concentration ratio increases – or, conversely, a decline in concentration if the ratio decreases.