Evolution of Innovations Across Web 2.0 Service Platforms through Mutation, Natural Selection and Reuse

This paper examines the question of how innovations are generated in and diffuse across Web 2.0 service platforms and effect change at the industry level. We apply evolutionary economics and evolutionary organizational theory as a theoretical lens and conceptualize the adoption and diffusion of innovations as a dynamic process where innovations propagate vertically within firms via successive product releases (or generations) as well as horizontally across firms via imitation and replication. We develop a formal stochastic process model that allows us to design a multi-level study that examines how innovations arise, which innovations survive in the market and which do not, and if and under what conditions industry standardization is achieved.