Innovation and the creation, development and destruction of markets in the world machine tool industry

In the 1970's the Japanese machine tool builders began to create and develop, first in the US and later in Europe, new markets for computer-numerically controlled (CNC) machine tools. Their control-technology innovations rendered the machines of their US competitors obsolete. Consequently, many US and German machine tools builders, who saw their markets being destroyed by their larger Japanese competitors in the late 1970's, were forced to exist the industry in the mid 1980's. This study identifies the main characteristics of the world machine tool industry, describes the evolution of the world machine tool industry from the early 1960's, and analyzes the effect of Japanese innovation on US and German machine tool markets.