Does new product growth accelerate across technology generations?

Abstract

The academic literature on the growth acceleration of new products presents a paradox. On the one hand, the diffusion literature concludes that more recently introduced products show faster diffusion than older ones. On the other hand, technology generation literature argues that growth rate, at least as measured by diffusion parameters, remains constant across generations. We resolve this apparent paradox by testing whether growth acceleration occurs across technology generations while controlling for the passing of time. We check acceleration across 39 distinct technology generations in 12 product markets. The results show that intergeneration acceleration occurs in time to takeoff but not with respect to diffusion parameters (i.e., p and q). We show that takeoff acceleration is mostly driven by technology vintage (i.e., the passage of time) rather than generational shifts. Thus, time is a factor that accelerates early growth, but generational shifts do not. This result also holds when controlling for the effects of market vintage when the market is either business-to-business or business-to-consumer as well as when the technology is process- or product-based.