A software tool to estimate the parameters of technological growth and substitution processes

©2012 IIASA TNT Program

©2012 IIASA TNT Program

LSM2 is a software tool developed at IIASA that allows to analyze the dynamics of how a technology (product, technique, process, practice) grows and interacts (competes) with other technologies. The tool uses empirical data to analyze the technology substitution process over time, computes the market shares of several competing technologies across multiple time frames, and analyzes not only absolute production/sales amounts per technology but also the total market volume growth of all technologies taken together. Simple model parameters approximate the growth and substitution dynamics, making it useful for comparative research.


  • LSM2 is a simple software tool that helps to analyze technological growth and substitution.

  • Applications include marketing research, scenario development, historical transition analyses, as well as meta-analysis across many individual technologies.

About LSM2

As a logistic substitution model, LSM2 describes the process via which a sequence of traits transforms into another set of traits. The original model was first formulated in 1979 at IIASA and then reprogrammed in 1994. In 2005–2006 IIASA developed the latest version of LSM2 as an integrated platform. An improved user interface was added, and the model's portability was enhanced. The program can now either be downloaded on to a local computer or alternatively run directly via the IIASA Web site. The current version of LSM2 has been extensively tested and is available on an "as-is" basis. It is available for all OS platforms where a Java Standard Edition runtime environment is available, including Windows, Mac OS, and Linux/UNIX..

How LSM2 works

Diffusion and substitution are among the most common phenomena driving structural changes in economies, industries, consumption, and other expressions of human behavior. Every diffusion/substitution process undergoes three distinct phases: growth, saturation, and ultimate decline, which can be described mathematically by S-curves (including logistic functions). LSM2 includes some of the most popular S-shaped functions used in the diffusion literature that can be used to analyze technological growth in LSM2’s model subroutine FIT. Competing technologies can be analyzed via their respective fractional market shares, modeled via a set of coupled logistic equations (LSM subroutine routine). The model provides convenient mathematical parameters that allow to compare many different technological growth and change processes over time, across markets, and between technologies. It should be noted that LSM2 is a tool for descriptive analysis, which typically is only the first step of a more comprehensive analysis that also includes causal factors.

IIASA Research 

IIASA has identified the fields of information, communication, transportation, and energy and climate mitigation as the key sectors where technology analysis is most needed. Given the wealth of possible diffusion patterns and interlinkages among cutting-edge technologies—as well as the economic and societal impacts that are likely to result if they are widely adopted—IIASA scientists carry out in-depth investigations into the patterns and drivers of technological change. A key research question is to establish ceteris paribus appropriate conditions that allow modelers to compare the evolution of very different technologies in order to assess i) the potentials for accelerated diffusion; and ii) the impact of technology policies. LSM2 is one (though not the only) tool used in this research at IIASA.

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Last edited: 05 March 2020


Arnulf Grubler

Distinguished Emeritus Research Scholar Transformative Institutional and Social Solutions Research Group - Energy, Climate, and Environment Program

Webstart LSM2

International Institute for Applied Systems Analysis (IIASA)
Schlossplatz 1, A-2361 Laxenburg, Austria
Phone: (+43 2236) 807 0 Fax:(+43 2236) 71 313