Which factor dominates the industry evolution? A synergy analysis based on China's ICT industry

Abstract

Industry evolution caused by various reasons, among which technology progress driving industry development has been approved, but with the new trend of industry convergence, inter-industry convergence also plays an increasing important role. This paper plans to probe the industry synergetic evolution mechanism based on industry convergence and technology progress. Firstly, we use self-organization method and Haken Model to establish synergetic evolution equations, select technology progress and industry convergence as the key variables of industry evolution system; then use patent licensing data of china's listed ICT companies to measure industry convergence rate and apply DEA Malmquist index method to calculate technology progress level; furthermore apply simultaneous equation estimation method to investigate the synergetic industry evolution process. From 2002 to 2012, China's ICT industry develops rapidly; it has the most obvious convergence and powerful technology progress compared with other industries. We choose china's listed ICT industry to make empirical analysis. Our main findings are: a) technology progress is the order parameter which dominates industry system evolution. Moreover, industry convergence is the control parameter which is influenced by technology progress; b) Development of technology progress is the core factor for causing evolution of industry system, and industry convergence is the outcome of technology progress; c) Especially, it is important that the dominated role of technology progress will be sustained, even though in the environment of convergence, companies also need focus on self-innovation, rather than only adapt to the new industry evolution trend.