Another perspective on this is offered by Brian Arthur of the Santa Fe
Institute and his barely developed theory of "increasing returns". The
implication of this theory is that there is no possibility of copying and
a great possibility of "sustainable competitive advantage" over
significant periods of time.
The theory is something like this. In the early stages of development -
in fields as diverse as economic products, organisations forms, and life
forms in the ecosystem - there are a few alternatives and by a combination
of integration with environment and good fortune, one takes hold better
than the others. From that point forward, diversification builds on the
(now) accepted model and each further level of diversification provides
"increasing returns" rather than the more traditional economic
expectations of decreasing returns.
The phenomenon, as I understand it, has to do with principles of
adaptation which suggest that it is easier and more economically efficient
to adapt something than to start newly. The originator of a field - or an
improvement - tends to maintain the lead for some time because of the
learning curve.
By the way, why do I never hear reference to the learning curve in the
conversations regarding the economic advantages of the learning
organisation?
-- Michael McMaster Michael@kbddean.demon.co.uk