A3 Abrupt technological obsolescence

Topic

Abrupt technological obsolescence is an anomaly occurring within the Production stream when the rate of external technological replacement outpaces the remaining useful life of installed capital. As long as the rate of external technological replacement remains below the level of productivity the installed capital can still deliver over its remaining lifespan, that capital remains competitive, and physical goods production does not need to replace it prematurely.

Abrupt technological obsolescence is triggered when the rate of external technological replacement accelerates faster than the installed capital can be amortized within its remaining useful life; it is not a matter of the installed capital physically wearing out, but rather of external technology advancing at a pace that renders the installed capital obsolete before it has finished delivering its expected output.

Monitoring the rate of external technological replacement relative to the remaining useful life of installed capital is, therefore, the direct way to anticipate abrupt technological obsolescence: the moment the former surpasses the latter, the installed capital in the Production stream falls short of what external technology offers, and physical goods production faces an obsolescence that could not be planned for in time.

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