Vernon and the computer. Connections between the information technology revolution and the product-cycle hypothesis.
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The study examines how far the Vernon product-cycle hypothesis can explain the characteristics of the American hardware sector in recent decades. It emerges from analysis of macroeconomic data and statistical timelines for the activity of transnational corporations that although the original hypothesis stands up essentially in certain areas (such as computer manufacture), it characterizes the developments of recent decades in others only to a small extent. However, the explanatory power of the theory can be improved if the ideas are interpreted dynamically, i. e. if the longer-term behaviour and mutual influences of the industries are examined. For instance, it is found that as the new economy gains ground, the various industries begin to affect and fertilize each other, and very often to transform each other entirely. Furthermore, it is found that new Vernon cycles appear within certain industries as an effect of technological development, and that these are capable of renewing such an industry by being more or less superimposed upon it.
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