oo weg, “ey S -Curve of Technology Evolution The f the S-curve of tech i i : nological evolution was origi i c E iginall be ose { Se Tooley Evolution refers to changes in the peel Tisties of'a specific technology over time /Although the initis) een ‘ gy ove init " 1m a new technology general 'y appears to be a eG oro sean i i ; cess, once a f a comes into existence, its evolution.oyer 1 e a teehnolo imestends to folio pattern as shown in Figure 5.4. nes econ oa AlMOSt S-shay, Performancne Characteristics Time Fig. 5.4: S-Curve of Technology Evolution The S-curve encompasses(four major staged in the evolution of the performance characteristics of technology: (a) Stage of Emergence/Infancy: During this stage, a new technology comesinte existence and there is a gradual and slow improvement in its performant characteristics as the organization is highly cautious at the initial stage a” to uncertainty about its success, and unavailability of market feet os technological activities are more focused around exploratory innoval and centred on alternative product concepts. (b) Stage of Rapid Jmproyement: During this stage, y a characteristics of the new technology improve at.an accelerating, ark ‘The organization crosses initial hurdles and starts getting market fee technological activities are directed towards radical inno) oe yrmance the performae -_—_ 129 ge, the pace of improvement Generation declines. During vement: During this staj y and its characteri nore incremental, focused on exploiting Improv of the technolog: nthe Per ovation activities are n Fi s of the dominant design. this stage, further improvements inthe fficult_to achieve. vements in the process, ind improve peclining. this P the possib! stage, of. Maturity: @ recnologyS yerformancs 1 cs technological activi efficienc, peed. delivery, be used_to study the _S-curve of_technology ator hey can be defined as “indices or statistical data, which allow jzation and evaluation of technologies throughout their _life indicators utilize _emy irical information to eyolut’ are (Chang, 2008). Technology haracteristics that affect the technological advancement denominator in all technology and successful commercialization{The common indicators is that these are measures to_indicate the specific characteristics of a technology that are interesting to monitor in order to take strate; ic action in relation to that technology{ Generally. three types of technology indicators can logy activity to indicate technological ut indicators are variables pe used as measures of science and techno! henomena_of the development: input/byput And output jrdicators inp that cause technical progress, byput ‘indicators measure sub-} t indicators are connected to the qualitative, duct development(Qutput a= technical advancement, and outpu quantitative or value-rated progress in the process of pro’ measures are most often used particularly jin R&D publications ‘and patents, as — paten ‘es are focused around im, yy and productivity to reduce costs al jndicators /can they are most easily accessed. S-curve shape of technological evolution occurs due to the following reasons: , =e ae © Learning processes: In the first stage, ge! 5 stable design ‘ovements generates rapid impr. Ghes its feasible potential, ., Its further development development costs, and process, and in the second stage, © ‘Technological Limits: Once a technology rea technology limits come into play during later stage: id increase in is affected by diminishing returns, rapi markets becoming price-competitive and growth begins to level out. As a result, the cost of further development of a product or process becomes ees ‘This natural limit is called technological frontier (Dosi). ie (technological frontier/natural limit reflects a set of technological \jitameters, iat can be achieved ina given economic content. Tn the later stages; a radical breakthrough occurs which lead to the, emergence of a This is known as n | lew technology, replaciny isting.one- TOfreeciarn ke chum in Bionre 5.5.180 Management of Technology and tnnoxags @ The performance of the newer technology may Initially bo losver ta that of the older technology: but because of their relative positions j their respective S-curves, the perfornat s the older technology. 2 of the newer Lechnology sim Technology Progression 8 z Us Physical limits of technology o = $$ 5 8 Technology E Regime {> 2 3 a m4 Bo' BS fa 28 : fe $2 Business es ge Loss 2o a5 aa Wg Application Launch Yan be broadly divided into six ¢ Management of Technology ang SY and in, ay Innical characteristics gp «L_into four stages, namely Mtroety Tay ti mn Ategor iss aS 1 1 Vital Life I Time > (Years) z< ey Degraded Technology Application Growth Technology Maturity Fig. 5.8: Stages of TLC in Terms of Business Gain These six distinct stages/phases of a technology life cycle are presented in ative Table 5.3. Table 5.3: Phases of Technology Life Cycle Stage / Phase Technological Stag No Phase q Technology Development _| Basic Technology Research i Technology Application Technology + Applications development i ‘Application Launch Technology + Applications + Product launch Vv Application Growth Technology + Applications + Rise in product sales v Technological Maturity Technology + Applications + Som fall in product sales M Degraded Technology Minimal product sales + Loss of applications + Arrival of altern technology In stage I, a basic technology is dey in the right direction is required. tage |, din the re: During this phase, much efforts and costs are involved. nt eat develc mentor ind developn fot A good ordinate =_— peor!09 Generation applications of new technology are explored and pl tinuously required to exploit t e basic ne es ifort and money are con In st ing this Phas 7 earlier. Patent ined to snl developed earlier. Patents are also obtained to avoid unauthorized tec ing bY competitors at the later stages. ae |, products: services and processes based on applications are launched in i a arket. At this point of time, the products, services and processes involved int not fully developed. A number of alternative products, services and ompel ch other. A diversity of applications rket growth and structure. Regular market feedback is required to eres. nnn fosters: m + understand customer €X] ectations. e feedback and requirements of the market, market-oriented pased on th f th ffered. This is a period. dation when the emphasis is plications are 0 ie . ation, manufactusing efficiency and econospies of scale (of mass production). ‘This leads to rise in product sales Instage Vs technology reaches its maturity.stage and the down. While further development is affect imi “jrerease in development costs, ‘the market be ice-competitive and growth el out. The cost_of further development of a product or a process shitiye. Due to éxternal technological changes in the market, there oducts or services based on this technology. n ysually - Te gs designs emer’ and compete with | rate of innovation slows Tshed-returns and rapid pegins to lev becomes, is some dectinelel in sales of Pr 8 3 ' 3 £5 Fe 2 Bs conte 58 ' 53 39 i BE 58 1 se Es ' 3 SE ' be 3s i E eo t viv lime —> newTechnotogy | Je! ie £8 5s Bz 88 Phases Be #2 45 28 32 Es 28 ee 8385 £8 3B some 3 BS ape epee 2 tea 28 3 Fig. 5.9: Life Cycle Characteristics of a Technology ‘ons of the existing technology lose relevance t this point of time, there ‘e new technology: A' of ti s based On surviving applications. They In the last stage VI, many applicati due to the arrival of some alternativ are minimal sales of products oF service’ are Considered somewhat useful by the market.Pp 186 Management of Technology and Innovate, TLC may be Protected during its cycle with patents and trademark so as to lengthen its life span from L to L' (Fig. 5.4) and to maximize the profit from it, The development of a competitive product_or process can have a maior effec CAC steel, paper or cement manufacturing, have a long life span (with minor variations in technology incorporated over time) Whilst in other cases, such as electronic o¢ pharmaceutical products, the life span may be quite short. TLC has significant implications for business managers and firms. As the technology moves along its life gee (eis eters et firms also need to change strategies during each phase. In the first phase of technology in development, efforts need to be highly coordinated and in the right direction, In the second phase of technology application, business managers need to arrange tae simultaneously so as to avoid copying of new products in subsequent phases. In the third, stage of application launch, they need to maintaincontinuous interaction with buyers in the marketplace and evaluate their feedback. During the fourth stage of application growth, the firm should aim at capturing maximum possible market share by using aggressive marketing strategies in multiple markets. It should keep a watch over competitors’ activities. If the competitors try to bring a better product, then it should be open-minded to learn from them. During the fifth stage of technology maturity, the firm should take steps to enhance its Tife cycle by seeking-improvements..in, performance. parameters of technology. It can offer licences for the use of existing technology to other laggard firms and earn royalties. It should reduce its dependence on the existing technology. It should foster development and.acquisition.of the new. technologies, It ny y H] keep a watch over new technology developments in the marketplace In th last and sixth stage of degraded technology, the firm Should start expl ‘ ne logies. Thus, business managers and firms need to Ploiting eres ee f TLC. Box 5.6 pr j ange their strategies during each stage o' . Box 5, presents journey oF tegheees life cycle of Electric Car. ology Box 5.6: Technoloay Life Cycle of Electrie n—‘THE $-CURVE OF TECHNOLOGICAL PROGRESS ‘A technology’s improvement of performance follows the S-curve. When a technology performance parameter (y-axis) is plotted against time (x-axis), the result resembles an s-shapel diagram called the S-curve, Technological performance can be expressed in terms of any attribute. such as density in the electronics industry (number of transistors per chip) or aircraft speed in miles per hour, As can be seen in Figure 5.3, technology progresses through a three-stage Technology Life Cyele (TLC): (l ) the New invention period, also known as the embryonic stage; (2) the tec) ° improvement period, also known ag the growth stage; and (3) the mature-technology technology becomes vulnerable to substitution or obsolescence when a new or bel technology emerges, hnology Period, The tter-pertiyy ming1 us Management of Technolozy an +; » Parmy ea cae the type of the technology itself and the cost and time devotes, Ime; A newer technology (B) has a higher limit of performance for the same param, cetlain Eee E68 faster rate and will influence.the progression of the older technology, 2 point in time it will replace the earlier technology (A). An example is ceramics, whi have higher operating temperatures and substitute for metals used in internal combustion en the newer technology permits better performance of the engines. The performan®y” of the engi can continue to improve as a result of a sequence of newer technologies, each with a higher lng of the performance parameter of interest. Limit of B i} | | | | ~ Path of progress of technology + Slower rate of progress of technology 4’ + Newer technology B progressing at a faster rate| Time Fig. 5.4 Changes in natural limits of technology The rate of performance improvement is shown for two technologies, ology Life Cycle and Market Growth When technology reaches the market, it generates ae ey under bevel tas no real income-producing value. Technology on ce shell caret ing marketed) ite Jops, following the recog ogy life eycr no retum. AS technology devel eal Rides - et growth, expressed as e Fisiire Se netration occurs and so does mar! aT 1 eae i f the technology life cycle: The x-axis, vet-growth pattern at different phases 0 : pepe represents the market volume expected at six technology phases: The Techn’ Fepresents time a) technologyTechnology Life Cycles_107 evelopment phase, (2) application launch phase, (3) application growth phase, (4) mature- technology Phase, (5) technology substitution phase, and (6) technology obsolescence phase. A B c D F Market Volume Time ‘A Technology development D Mature technology B Application launch E Technology substitution C Application growth F Technology obsolescence Fig. 5.5 Market growth at different stages of the technology life cycle During the technology development phase the market does not recognise the technology at all; ithas zero response. However, this is the important period in which scientists and engineers are spending significant amounts of effort and money to create the technology, develop prototypes, and test the new technology. The goal of any R&D manager should be to reduce this time period as much as possible, since it is very expensive ‘and does not produce revenue. Once the first wave of the new technology application is launched into the market, the market volume follows the path of technological progress. ‘This is characterised by slow initial growth during the launching period, followed by rapid growth. During the growth phase of the technology, penetration into the market will depend on the rate of innovation and the market needs for the new technology. The growth rate slows down, as the technology approaches its maturity. At some point, the market volume will peak and then start to decline. This will happen when the technology matures and enters its substitution phase. Companies that continue to use the old technology in this phase will be faced with a shrinking market share and a fall in revenues. The final phase is technology obsolescence, during which \ the technology has little or no value.=e MULTIPLE-GENERATI ON TECHNOLOGIES ystems, rechnology, like all systems, has a hierarchy. A system can consist of a number of stibs: ‘and each subsystem may have a number of components. _Technology need not consist of a single component or derive from a single innovation. different generations of Technology can consist of multiple technologies and derive from ‘ovation. The personal computer is a technology and has a technology life cycle. It consists of several sub-technologies. One such sub-technology is the microprocessor, which can also be defined as a technology with a technology life cycle all its own. In turn, the microprocessor has own multiple-generation technologies or sub-technologies. For example, the microprocessor {echnology developed by a company such as Intel has undergone several generations of changes 088, 286, 386, 486, Pentium). Each of these generations of innovation helped boost the nology life cycle of the microprocessor and, in turn, that of the PC. (See Figure 5.7.) ‘Technology Life Cycle Sub-technology It Life Cycle 4 a sub-izchmology HL & ‘Sub-technology } Sulton 5 Life Cyele a TECHINOLOGY vel —_———— ses ‘Time Fig. 5.7 Multiplo-gonoration tochnologlos Sub-technology life eyeles in multiple generations of innovation shape technology life cycle. the overallTHE PRODUCT LIFE CYCLE A product life cycle closely resembles the profile of the technology life cycle and its assov#* market-growth profile (Figure 5. 14). A product emerges from a concept, which is translated i* BET eer oesechncheny ie pees 5 angincering, design and ussially 4 sina sing coe he nd usually iNustrated through an engincering Sraving, 1 POUNI—e is ae ee i a riety ia the product specifications are met and the performace curs achieved, al design-and-prototype-development phia ; h ye | | id iy c || e || # | j | | _—_— | Z { j h g 1\ 4 I ; 2 \ | ‘ | \ i \ | Time = [A Concegt Design or Prototype D Mature Stage Product Launch Stage Substitution Products | C Product Growth Stage F Product Obsolescence and Phasing-out Stage | Fig. 5:14 Product-market life cycle wwth phase, whose profile The second phase is the product-launching phase, followed by the gro depends on the market response to the product. Typically, sales start slow and then accelerate as the product becomes known and accepted in the ‘marketplace. As the product is diffused in the turated with a well-established mature-technology product. market and the market becomes sal in. New products threaten mature-technology products and the growth rate is likely to slow dows may substitute for them and eventually render them ‘obsolete. Obsolete products have little or no monetary value. They may be recycled, placed in museums, or kept as collection items if they possess aesthetic or appealing characteristics. ™ __ When scientificand engineering advances Jead to the introduction of is created in existing systems. New products ‘emerge in the embryonic phase of a technology and ts peak and starts many product innovations occur ‘As the rate of product jnnovation reaches i ei the industry standard is defined accordingly to decline, a dominant product design ‘emerges (Figure 5:15), Process innovation follows f° product designs. It continues throughout the technology life cycle in support ‘of both radical and incremental product innovations. Process innovations are important for the different generations of products. Process innovations increase 4 product's fife cyele and help maintain ‘competitiveness until substitute technology creates & stnmnerges. For example, switching Or steam- discontinuity in the system and 2 REY life eye! a 8 i J-powered engines creates turbulence in the diesel technology and new technology, turbulence116 Management of Technology aaa the steam technology. The diesel technology will have its own products, xy, ‘ough different designs until an industry standard emerges and dominates the rs, P TOCESS. innovation continues to create improvements in the performance of the dominz until a new technological discontinuity occurs, such as an electric-powered engine. The diene technology may render the diesel technology obsolete. The product and process innov electric products will run their cycles until another discontinuity occurs, perhaps hydrage,. powered engines. Be Fora single product, the technology life cycle and the product life cycle coincide. Techne discontinuity ends one product’s life cycle and starts a new product life cycle. Tecknologicg discontinuities used to be few and far between. In the technology age this is no longer the ex. i The digital age, for example, has created very rapid rates of innovation for components ad | products. A microprocessor’s design and manufacturing process change almost on 2 yearly basis Software is changing at a faster pace. The product life cycle is certainly much shorter than i in the nineteenth and twentieth centuries. Product Technology Life Cycle is Innovation g g & E é g 2 € a Technological Dominant Aging Technology Discontinuity Design (Substitution and (turbulence) discontinuity) Time Fig. 5.15 Technological progress The progress of technology is shown in relation to product and process innovation,