DIFFUSION OF LADDER-TYPE INNOVATIONS: A STUDY OF COMPUTER AND COMMUNICATIONS CONVERGENCE

Computer technology, virtually non-existent five decades ago, has diffused rapidly since its inception and is now of major strategic importance. Since its introduction there has been a steady acceleration of the innovation process in the computer industry and this has significantly impacted the market adoption of computer systems. An important innovation in the computer industry is its fusion with the communications technology. This convergence of telecommunications and computers is considered a major revolution which has helped to create new market segments for the computer industry. In this study we model this convergence as a ladder-type innovation and develop a diffusion model to study its impact on the market demand by the computer user community. The empirical analysis suggests significant impact of communications technology on the demand for computer systems. © 1997 Elsevier Science Ltd