PREDICTIONS – 10 Years Later - Santa Fe Institute

7. COMPETITION IS THE CREATOR AND THE REGULATOR
Ten Years Later
The little circle in Figure 7.5 reflects the situation in year
2000. This update is based on data from tankers only and indicates
a fifty-fifty split between steam and motor propulsion
engines. The 50-percent point comes earlier than expected.
The discrepancy may be due to the fact that the update concerns
only tankers. But it may also be due to a new
phenomenon. There is a newcomer in our competitive picture,
gas propulsion. The graph of Figure 7.5 was put together before
ships with gas propulsion began diffusing into the market.
The appearance of ships with gas propulsion may have accelerated
the decline of steam ships. And the newcomer is most
likely to eventually replace motor ships.
The smooth lines in Figure 7.5 represent the description given by the
substitution model as generalized by Nakicenovic to include more than
two competitors. 8 It says that at any given time the shares of all competitors
but one will follow straight-line trajectories. The singled out
competitor, called the saturating one, will have its share determined as
the remainder from 100 percent after all other shares have been subtracted.
The saturating competitor is normally the oldest among the ones
that were still growing. Usually it is also the one with the largest share,
has practically reached maximum penetration, and is expected to start
declining soon. The trajectory of a saturating share is curved. It traces
the transition from the end of the growing phase, where the entity was
substituting for its predecessor, to the beginning of the declining phase,
where it will itself start being replaced by the one next in line. Every
competitor goes through the saturating phase in chronological order.
The saturation phase can be seen as the culmination and, at the same
time, as the beginning of the end. For a product it often corresponds to
the maturity phase of the life cycle. It is the time when you face
competition directly. You have done well, and everyone is trying to
chip away at your gains. Your share is calculated as what remains after
subtracting from 100 percent the trajectories of all the others. You are at
the top, but you are alone; the model requires one and only one in
the saturating phase at a time. This condition is necessary in order to
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