Blackwell Reference Online

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From a variety of perspectives, researchers have hypothesized that products are characterized by patterns of evolution which have been called product life cycles. In most of these theories, new products evolve over time from “young” to “old,” and the various stages of the cycle can be documented, because they are associated with certain observable characteristics (see Clark, 1985 , for descriptions of the nature of the cycles; see also industry life cycle ). Thus, life‐cycle theory highlights the importance of product, in addition to process, innovation. Product innovation implies that technology is dispersed through the introduction of new products, whereas process innovation implies that technology is introduced through new production processes. The continuum of product life cycles, arising from product innovation, potentially has implications for patterns of trade, strategic behavior among firms, and even marketing strategies. For example, Vernon (1966) suggests that international trade patterns are driven by the fact that new products are “born” in technologically superior developed countries, but when technology becomes standardized, production moves to less developed countries, where labor is cheaper. Based on the Schumpeterian notion of the innovative entrepreneur, other research investigates product life cycles in the context of strategic competition and innovation ... log in or subscribe to read full text