Technology

1
Technology Life Cycles
2
The S-Curve of Technological Progress

• Technologys improvement of performance follow
  the S-curve
• Technology progresses through a 3-stage
  technology life cycle (TLC)
• 1. Embryonic Stage the new invention period
• - slow initial growth
• - experimentation, initial bugs worked out

3
The S-Curve of Technological Progress

• 2. Growth Stage technology improvement period
• - rapid and sustained growth
• 3. Maturity Stage the mature technology period
• - starts when upper limit of the technology is
  approached
• - progress in performance slows
• - technology become vulnerable to substitution
  or obsolescence

4
The S-Curve of Technological Progress
Technology Performance Parameter
Physical Limit
Time
5
Technology Life Cycle and Market Growth

• Technology Development Phase
• - market does not recognize technology
• - significant amount of money on RD
• Application Launch Phase
• - slow initial growth then rapid growth
• Application Growth Phase
• - penetration depend on rate of innovation and
  market needs

6
Technology Life Cycle and Market Growth

• Mature-Technology Phase
• - market volume peaks and starts to decline
• Technology Substitution Phase
• - continued use of old technology leads to
  decreased revenue
• Technology Obsolescence Phase
• - technology has little or no value

7
Multiple-Generation Technology

• Technology is hierarchical
• Systems consist of subsystems and subsystems
  consist of components
• Technology can consist of multiple technologies
• Technology can be derived from different
  generations of innovation

8
Technology and Market Interaction

• Strong dynamic relationship technological
  innovation and market
• Science-Technology Push
• - science provides the base for technologi-cal
  development which creates new market
• Market Pull
• - technological development in response to
  market need or demand

9
Integrating Technology Push Market Pull to
Stimulate Innovation
Innovation
Opportunities for Technology Push
Opportunities for Market Pull

• Market Demands
• Proliferation of
• Application Areas
• Recognized Needs
• Opportunities for ?
• profitability, quality,
• productivity
• Entrepreneurs

• Scientific Discoveries
• Applied Knowledge
• Recognized Needs
• Intellectual Capital
• (Scientists Engineers)

10
The Product Life Cycle

• Design and Prototype Development Phase
• Product Launching Phase
• Product Growth Phase
• Product Maturity Phase
• Substitution Products
• Product Obsolescence

11
Competition at Different Phases of the Technology
Life Cycle

• Embryonic Stage (Emerging Technology)
• - competition based on innovation
• Growth Stage
• Early part of growth stage
• - expansion in market size for product
• Later part of growth stage (Key Technology)
• - patented position, define standards
• Maturity Stage (Base Technologies)
• - Commodity available to all competitors

12
Competition in Mature Technology

• Competition no longer based on innovation but
  rather on price and quality
• Process innovations dominate, and assume greater
  importance in achieving a competitive edge
• Companies compete by introducing product lines
  into segmented markets

13
Competition in Mature Technology

• Companies rely on economy of scale to decrease
  price
• Specialization and production efficiency within
  companies assume greater importance
• Only firms with dominant markets tend to survive

14
Competition in Mature Technology

• Large organizations with mature technology tend
  to be rigid, bureaucratic, and multi-layered
• Companies with mature technology become subject
  to ? competition by those who have ? production
  cost, ? labor rates ? overheads
• Mature technology is continuously threatened by
  substitution of newer technology

15
Diffusion of Technology is Dependent on

• Degree to which innovation offers better
  advantage than does existing practice
• Degree to which innovation is compatible with
  values and needs of users
• Degree to which innovation is considered complex
  and difficult to use

16
Diffusion of Technology is Dependent on

• Degree to which innovation can be used on trial
  before commitment to its adoption
• Degree to which innovation seen, results observed
  by potential adopters

17
The Diffusion-Communication-Channel Relationship

• Adopters of an innovation are influenced by two
  types of communication channels
• - interpersonal word of mouth
• - mass media channels
• Mass media influence greatest in early phase is
  continuous throughout diffusion
• Number of users who adopt the innovation due to
  interpersonal channel expands during early phase
  then decline during second half of diffusion
  process

18
Process of Deciding to Adopt an Innovation

• Stage 1 Gaining knowledge of the innovation
• Stage 2 Forming a favorable opinion about the
  innovation
• Stage 3 Making a decision to adopt the
  innovation
• Stage 4 Implementing the innovation
• Stage 5 Following up on performance of the
  innovation

19
Innovation Decision Time
Laggards
Followers
Leaders
Time