The rate of innovation in the commercial aircraft jet engine market

Abstract

The applicability of a deterministic model which was developed by Mansfield (Reference I) and which describes the rate at which new product innovations are adopted was applied to the commercial aircraft jet engine market. The model was found to agree well with (1) historical market share data related to the displacement of the turbojet engine by the first generation turbofan, and with (2) forecasts of future market shares related to the displacement of the first generation turbofan by the second generation turbofan. The rate at which a new product innovation displaces an existing product in a given market appears to be an increasing function of: (1) the proportion of firms already using the new product, and (2) the profitability of the new product relative to the old product and a decreasing function of the size of the investment required to adopt the new product.