Technological Discontinuities and Company Strategies—Machine Tools and Flexible Manufacturing Systems

Abstract

In this chapter, we will discuss the relationship between technical change and economic performance in the industry supplying CNC lathes and machinining centers, and systems built around them. The discussion will be structured around two technological discontinuities in the machine tool industry. We begin by reviewing how the technological discontinuity from conventional to numerically controlled machine tools (NCMTs) altered the nature of competition within the machine tool industry as well as the competitive strength between various firms and countries. We are currently (1991) at a point in time when this process is being completed.¹ Yet, before this process of substitution has come to an end, NCMTs are threatened by a new substitute: flexible manufacturing systems (FMSs). Today, we are beginning to see the first impact of this new technological discontinuity. The new technology and its present pattern of diffusion is presented in section 3 while section 4 broadly outlines the nature of competition in major parts of the machine tool industry. However, this picture is not expected to remain static. A number of factors related to the development of FMSs are pushing for a change; section 5 discusses these factors and how they might have an influence on the nature of competition in the future.

An earlier version of this chapter was published in Technological Forecasting and Social Change, 44 (1), August 1993, pp. 27–48.