Three Perspectives on an Innovation: Thirty Years of PC Operating Systems

Abstract

This paper describes the main innovations in PC operating systems from 1975 to the present, and looks at these innovations from three perspectives. First, to what degree have these innovations enhanced the competitiveness of the innovator? Second, to what degree have these innovations contributed to wealth creation in the economy? Third, to what degree do these innovations contribute to the achievement of a sustainable economy? We find that these three perspectives give very different assessments of the merits of operating system innovations. While they have strengthened the competitive position of Microsoft in applications software as well as operating systems, it is arguable that these innovations are running into diminishing returns as far as wealth creation is concerned. Moreover, some of the most recent innovations are creating unexpected, but environmentally hazardous side effects.

Keywords: innovation, computer software, competitiveness, wealth creation, sustainability, e-waste

JEL Classification: L86, O31, O33, Q20