Abstract
In this paper, we apply chaos theory to study the nonlinear nature of industrial and technological change. Methodologically, we focus on the analyses of three industries - software, semiconductor and biotechnology - with the use of Lyapunov exponent as an indicator to the measurement of chaos. Results show that the three industries were developed to promote the conditions of feedback loops, endogenous change, path dependence and role of institutions, all centered on the edge of chaos. This kind of observation is particularly applied to industry growth following a gale of creative destruction. Implications for theory, research and practicing managers are drawn out.