A model of the internet as creative destroyer

The extent to which a technological change is a creative destroyer is of interest to entrepreneurs who can exploit the opportunity and to incumbents who must defend their existing competitive advantages from the change. In the face of a technological change, an important question is: To what extent is it a creative destroyer? In this paper, we offer a model for exploring the depth and breadth of creative destruction from the Internet and the implications for wealth creation and competitive advantage. We apply the model to three groups of industries, each of which rests on one of Thompson's three categories of organizational technologies: long-linked; mediating; and intensive. The application suggests that incumbents in all industries should experience some erosion of competitive advantage. Industries with predominantly mediating technologies should experience creative destruction. Those with intensive technologies should experience more erosion of competitive advantage than those with long-linked technologies.