Technological innovation can reshape the competitive landscape of an entire industry with astonishing speed. Established businesses may fail to bridge the discontinuity and wither away, while newcomers with novel concepts or methods rise to dominance. Industry after industry exhibits similar patterns of transformation when a new product or process technology emerges to challenge old formats. A look at one industry* in which innovation has historically represented the key to success can throw light on these patterns and help identify the qualities that determine whether a firm will survive the encounter with dramatic technological change.

The photographic industry

Anyone who watched the Public Broadcasting Service series, The Civil War, first aired in the US in 1990, must surely have been struck by the hundreds of photographs used by producer Rick Burns to acquaint us with the history of that dramatic conflict. The images of generals, private soldiers, battlefields, and the war’s hapless victims played across the screen as a background to interviews with historians and readings from letters and diaries of the period. Most of these pictures were remarkably vivid, despite the fact that they were taken with equipment based on...