As you learned in an earlier chapter, companies create competitive advantages by having distinctive competencies when they do$,$ make, or perform something better than their competition. The competitive advantage is sustainable if other companies are not able to duplicate the advantage. Understanding the advantages and disadvantages of innovation can help organizations with competitive advantages. Innovation streams are patterns of innovation over time that can create sustainable competitive advantage. Innovation streams begin with a technological discontinuity. A technological discontinuity is a scientific advance or a unique combination of existing technologies that create a significant breakthrough in performance or function. Technological discontinuities are followed by discontinuous change, which is the phase of a technology cycle characterized by technological substitution and design competition.

Technological substitution is the purchase of new technologies to replace older ones.

Design competition is competition between old and new technologies to establish a new technological standard or dominant design, which becomes the new accepted market standard for technology.

The introduction of a dominant design is a key event in an innovation stream. If organizations choose to ignore the dominant design as standard, they may experience a technological lockout, which occurs when a new dominant design prevents a company from competitively selling its products or makes it difficult to do so$.$ The introduction of a dominant design shifts focus from design experimentation and competition to incremental change. In this phase companies innovate by lowering the cost and improving the functioning and performance of the dominant design.

Discontinuous change is characterized by in which an old technology and several different new technologies compete to establish a new technological standard or dominant design.

design competition

technological singularity

design substitution

technological lockout