The Portfolio Model of Technological Development in the Aircraft Industry

The aircraft industry has long been considered the quintessential high technology industry. By examining the dynamics of technological change in this industry the portfolio model of technological advancement is developed. This model may be used to describe technological advancement in large sophisticated, technology intensive systems. the rapid advancement of individual technologies as measured by improvements in specific performance parameters is evident in the aircraft industry. However, the ability of a technology to improve performance in one or more key performance parameter may lead to adverse effects in other performance parameters or may not be compatible with other technological developments that are occurring in the industry. Individual technical improvements can be characterized as either portfolio reinforcing or portfolio shifting depending on whether or not they promote shift in the way the technologies are combined into a total system or portfolio. The commercially and economically successful products appear to be those that combine technologies into an optimum bundle of performance characteristics or portfolio. Technologies that flourish are not always the technologies on the leading edge of the performance frontier, but are those technologies that product the optimum portfolio.