Evaluating the Tipping Point of a Complex System: The Case of Disruptive Technology

One of the challenges seen by modern technology companies is the innovator’s dilemma, or the need for companies to successfully embrace new emerging technologies that can displace incumbent technologies in a market. The resulting market disruption caused by this phenomenon can be modeled as a complex system, with dynamics that show a phase transition, or tipping point, after which the system shifts into a new equilibrium. The purpose of the current study is to mathematically model a tipping point measure of complex networks and a theoretical framework for disruptive technology dynamics. A predator-prey model is used to emulate the behavior in the market dynamics of a disruptive technology versus an incumbent technology. A resilience index is integrated into the model to measure the tipping point in the market where the disruptive technology will overtake the incumbent technology. A historical case study of film vs. digital vs. cell-phone cameras is simulated to show the application of this methodology. The proposed novel approach can help stakeholders of such complex economic systems to assess the impact of new disruptive technologies, and potentially use the resulting resilience index as a measurement for adjusting technology requirements and systems management approaches to achieve a desired outcome.