Waves of IT Innovation in Industries: Extending Diffusion Through the Integration of Punctuated Equilibrium and Fit

At the industry level, Information Technology (IT) driven transformation can be characterized by the rapid diffusion of IT innovation across firms. This paper suggests that IT innovation has occurred over the past fifty years in four major waves, but that not all industries have been equally affected by each wave’s passage. It is proposed that the depth and rate of diffusion of an IT innovation wave within an industry is contingent on the congruence between the characteristics of the wave and those of the industry. The theoretical basis for this proposition is found in the integration of Punctuated Equilibrium Theory and Venkatraman’s conceptualization of perspectives on fit, providing a macro view of diffusion of IT innovation at the industry level of analysis.