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research Ever since the first computer was developed in the mid-20th-century, scientists have tracked the rate of innovation according to Moore's Law, which holds that the memory capacity of a personal computer doubles every 18 months. Companies often apply Moore's Law more broadly to all technological innovation as a way to guide their technological and research and development investments. However, several researchers argue that Moore's Law actually does not apply to most industries—they have defined a new way to measure the speed of technological progress. The researchers include Gareth James and Gerard Tellis of the University of Southern California's Marshall School of Business in Los Angeles; Ashish Sood of Emory University's Goizueta Business School in Atlanta, Georgia; and Ji Zhu from the department of statistics at the University of Michigan in Ann Arbor. The researchers studied 26 technologies in six markets, ranging from the lighting industry to automobile 58 May/June 2013 BizEd Gareth James Gerard Tellis Ashish Sood manufacture. They say that their model, Step and Wait (SAW), predicted the path of innovation more reliably in the six markets than Moore's Law or other metrics. SAW predicts that technological progress occurs not in a smooth upward trajectory, but in large steps or jumps in growth. Those steps are followed by periods when technologies stay relatively stable. That rate of growth is different for different technologies, say the authors. Of the components of a laptop, tablet, or smartphone—such as the memory and screen—some could be on a "long-wait-short-step" cycle. Others may be on a "short-wait-long-step" cycle. The authors note that managers could use the SAW method to better assess threats from competing technology. They point to the lithium battery, developed in the early 2000s. In 2006, when Tesla released its car powered by a lithium-ion battery, GE was still pouring billions of dollars into developing hydrogen fuel cell technology. GE didn't change course to develop a car with a lithium-ion battery until 2010. "Many firms were taken by surprise by the sudden dominance of lithium-ion," the authors write. "Managers could possibly have presaged the improvements in lithium-ion technology before 2006 by using our model," saving billions of dollars in the process. "Predicting the Path of Technological Innovation: SAW vs. Moore, Bass, Gompertz, and Kryder" appeared in the November/December 2012 issue of Marketing Science. I n noce nti an d Le e /G low I mag es Rethinking Moore's Law