Complex Adaptive System Theory, Agent-Based Modeling, and Simulation in Dominant Technology Formation

Abstract

Dominant technology formation is the key for the high-tech industry to “cross the chasm” and gain an established foothold in the market (and hence disrupt the regime). Therefore, a stimulus-response model is proposed to investigate the dominant technology by exploring its formation process and mechanism. Specifically, based on complex adaptive system theory and the basic stimulus-response model, we use a combination of agent-based modeling and system dynamics modeling to capture the interactions between dominant technology and the socio-technical landscape. The results indicate the following: (i) The dynamic interaction is “stimulus-reaction-selection”, which promotes the dominant technology's formation. (ii) The dominant technology's formation can be described as a dynamic process in which the adaptation intensity of technology standards increases continuously until it becomes the leading technology under the dual action of internal and external mechanisms. (iii) The dominant technology's formation in the high-tech industry is influenced by learning ability, the number of adopting users and adaptability. Therein, a “critical scale” of learning ability exists to promote the formation of leading technology: a large number of adopting users can promote the dominant technology's formation by influencing the adaptive response of technology standards to the socio-technical landscape and the choice of technology standards by the socio-technical landscape. There is a minimum threshold and a maximum threshold for the role of adaptability in the dominant technology's formation. (iv) The socio-technical landscape can promote the leading technology's shaping in the high-tech industry, and different elements have different effects. This study promotes research on the formation mechanism of dominant technology in the high-tech industry, presents new perspectives and methods for researchers, and provides essential enlightenment for managers to formulate technology strategies.