Innovations introduced more recently are being adopted more quickly.
The rates of new product introduction and adoption are speeding up and it seems to be across the board. For instance, an automobile industry trade consultant observes that “Today, a typical automotive design cycle is approximately 24 to 36 months, which is much faster than the 60-month life cycle from five years ago.”
The chart below, created by Nicholas Felton of the New York Times, shows how long it took various categories of product, from electricity to the Internet, to achieve different penetration levels in US households. It took decades for the telephone to reach 50% of households, beginning before 1900. It took five years or less for cellphones to accomplish the same penetration in 1990. As you can see from the chart, innovations introduced more recently are being adopted more quickly. By analogy, firms with competitive advantages in those areas will need to move faster to capture those opportunities that present themselves.
This second graph, by Michael DeGusta of MIT’s Technology Review, presents similar results. It took 30 years for electricity and 25 years for telephones to reach 10% adoption but less than five years for tablet devices to achieve the 10% rate. It took an additional 39 years for telephones to reach 40% penetration and another 15 before they became ubiquitous. Smart phones, on the other hand, accomplished a 40% penetration rate in just 10 years, if we time the first smart phone’s introduction from the 2002 shipment of the first BlackBerry that could make phone calls and the first Palm-OS-powered Treo model.
It’s clear that in many arenas things are indeed speeding up, with more players and fewer barriers to entry.