Technology cycles and innovation are two useful phenomena that can be used to explain how competitive advantage of companies can be maintained over time. Technology cycle can be defined as the period of time between the birth or introduction of a new technology and when it is replaced by a newer and substantially better technology. Technology cycle occurs whenever there is major advance in the knowledge, tools and techniques in a field. Innovation is the successful implementation of novel and useful ideas. Innovation is connected to technology cycle in the way that it forms the trigger to effect the technological discontinuity that replaces the old technology with the new technology.
Innovation can be easily copied or modified by the competitors and implemented in more intuitive manner. One great way to protect and maintain sustainable competitive advantage is to create a stream of innovative ideas and products over time, so that, there are frequent technology cycles, say every year. This gives little time for the competitors to copy the benefits obtained from an innovation. Innovation stream forces the industry to go for technology.
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