Overcapacity breeds innovation

I’ve been reading about this in multiple places- and since is a very interesting concept, wanted to collate it all in one place. This business observation states that excessive capacity in a given industry is often the much needed precursor to subsequent innovation. Examples are (still working on some of these):

• Railroad expansion in 1800’s – led to the increase in trade
• Industrial revolution led to large number of factories and overcapacity – ?
• Massive fiber-optic cables laid down in dot com era lead to cheap connectivity
• Surplus silicon and wafer cutting technologies after the semiconductor industry slowed down after dot com bust were picked up by a fast-growing solar energy industry
• The downtime created by the collapse of the Internet bubble gave people spare cycles to think up of new applications that we now collectively know as Web 2.0