Technology innovation keeps speeding upFor the most part, these failures are down to the rapid pace of technological innovation. New technologies are now being adopted much faster than they were, say, 100 years ago when devices like the automobile and telephone took well over 50 years to reach 50% adoption.
This process has now been greatly expedited. Certain apps for example, such as WhatsApp now dominate the global instant messaging market after only a few years of existence, pushing competitors out, before they have a chance to retaliate. The innovation adoption lifecycle also has a strong part to play in this. The innovation adoption lifecycle is the idea that the adoption of new technologist follows a bell curve comprised of innovators 2.5%, early adopters 13.5%, early majority 34%, late majority 34% and laggards 16%; essentially fragmenting the market.This faster adoption rate, and movement through the innovation adaption lifestyle has ultimately resulted in the shortening of company lifespans. In particular, back in 1958, the average time a company was expected to stay in the S&P 500 was 61 years, now, thanks to the rapidly changing technology market, the average has declined to just 18 years, an average which must leave long-term investors gasping for breath.