Technological Discontinuities

Technologies

Much of the extant literature on TDs builds on a broad definition of the term technology, which is best summarized as “any given concept of how to create and capture value.” The creation and capture of value encompasses three core dimensions. The first, use value, refers to the types and combinations of benefits that are proposed to customers. For instance, “ease of use,” “shopping atmosphere,” or “24/7 access to goods and services” are dimensions of use value. The second, the process of value creation, denotes how use value is created by transforming such inputs as labor, capital, materials, and information into outputs of higher value. Finally, the process of value capturing describes how companies capture the value they create in the form of economic surplus.

Paradigm-Consistent Versus Paradigm-Inconsistent Technological Change

Also underlying the concept of TDs is the assumption that technological change is either paradigm-consistent or paradigm-inconsistent. This notion dates back to Thomas Kuhn’s description of the development of scientific knowledge. As Kuhn observed, scientific knowledge usually develops within a certain paradigm. In phases of what Kuhn calls “normal science,” scientific research basically aims to actualize and extend a given set of accepted focal laws and logics. For example, the geocentric paradigm of cosmology drove scientific observation and progress for several hundred years. During this period, the goal of researchers was to match astronomic observations with Ptolemy’s view of Earth as the center of the world.

In the history of science, there are also periods of nonparadigmatic change. At the beginning of such extraordinary periods, scholars become insecure about the fundaments of their science because they make observations that contradict established assumptions. These researchers subsequently challenge established assumptions and then establish a new paradigm that is incompatible with the previous, widely accepted, approach. For example, the generations of astronomers working around the time of Copernicus, Galileo, and Kepler collected observations that falsified the Ptolemaic model. These astronomers then developed a heliocentric cosmology that allowed for more precise explanations and predictions of astronomical phenomena.

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