Technology Management

By
Yousaf Ali Khan

Types and Patterns of Innovation

Technology Trajectory
The path a technology follows through time is termed its
technology trajectory
Technology trajectories are most often used to represent the
technologys rate of performance improvement or its rate of
adoption in the marketplace

Trajectories can be observed in:

Technological change
Firms
Sectors/industries
Countries

Classification of Innovation
Continuous innovation
Introduction of a modified product rather than a totally new product
Examples?
Redesigned automobile (new Beetle)
Latest version of software program
low-fat version of food product
Improvements in laser jet printers, digital TV
Other examples: a change from VCDs to DVDs was illustrative of better technology, better picture
quality
Little or no change in technology
Has the least disruptive influence on established usage patterns
Symbolic innovations tend to be continuous
Symbolic innovations convey new social or psychological meanings
Examples?
designer jeans, skin care products for men, specialty coffees

Dynamically continuous innovation

May involve a new product or modification of an existing product

Some technical advances
Still does not disrupt or alter consumer buying and usage patterns
Examples
CD players; antilock brakes; disposable diapers; laptops; electric
toothbrushes
What about cell phones?
Other example: the walkman giving way to the portable CD player, or the
semi-automatic washing machine giving way to the fully automatic one.

Discontinuous innovation
Introduction of a pioneering product
Discontinuous innovations lead to disruption of usage and
consumption behavior patterns; there is a change not only
in the technology, but also requires consumers to change
to new behavioral patterns in terms of usage and
consumption.
For example, the postal mail giving way to email and
internet, the radio/record player giving way to portable
music and sound, the telephone giving way to the mobile
phone, or the traditional glucose and diabetes blood test
giving way to the home kit.

Characteristics that appear to influence consumer

acceptance
Researchers have identified five characteristics that appear to
influence consumer acceptance
1. Relative advantage
2. Compatibility
3. Complexity
4. Trialability
5. Observability

Characteristics that appear to influence

consumer acceptance

Relative advantage

The degree to which potential consumers perceive a new product is

superior to existing substitutes
Examples? Cell phone over pager; fax machine over delivery services;
Vinyl records to cassette to CD; Floppy disks to CDs

Compatibility

The degree to which potential consumers feel a new product is consistent

with their present needs, values and practices
Examples? Gillettes Mach 3 razor has become very popularBut unlikely
men will accept a depilatory cream designed to remove facial hair (because
incompatible with daily shaving practices)

Complexity

The degree to which a new product is difficult to understand or use

Examples? Cameras--drop-in film auto focus, built-in flash, etc. all added
to make cameras easier to use

Characteristics that appear to influence

consumer acceptance
Trialability
The degree to which a new product is capable of being tried on a limited
basis
Examples? Free trial (samples);money-back guarantees
Observability
The ease with which a products benefits or attributes can be observed,
imagined or described to potential consumers
Examples? Fashions and jewelry (worn in public) vs. soap or deodorant;
Use of celebrities and athletes to wear/use products can enhance speed of
adoption

Types of Innovation
Product innovation results in new or improved products. An example of
this might be a new type of razor blade that is sharper and lasts longer than
previous blades., or Hondas development of a new hybrid electric vehicle
is a product innovation.
Process innovation occurs when the manufacturing processes are improved
to make the production of existing products cheaper, or when new
processes are developed specifically for making a new or improved
product.
Market Innovation: Opening of a new market
Resource Innovation: Change in sources of raw material supply
Organizational Innovation: Change in characteristics of organization
structure

Product vs. Process Innovation

New processes may enable the production of new products
A new metallurgical technique enabled the development of
the bicycle chain which in turn enabled the development of
multiple-gear bicycles
New products may enable the development of new processes
The development of advanced workstations enabled the
implementation of computer-aided-manufacturing processes
that increase the speed and efficiency of production
What is a product innovation for one organization might be a
process innovation for another
UPS created a new distribution service (product innovation)
that enables its customers to distribute their goods more
widely or more easily (process innovation)

Types of Innovation according to Its

Process - Extend of Innovation
Innovation can take many forms regarding to its process:

Evolutionary-Revolutionary

Incremental-Radical-Modular-Architectural

Incremental

Evolutionary
Modular

Radical

Revolutionary
Architectural

Types of Innovation

Incremental innovation occurs when small improvements are made to a product, or the
processes used in manufacturing a product.
These changes generally extend the competencies of the innovator
strengthens the firms competitive position and entrenches the nature of the industry.
For example, changing the configuration of a cell phone from one that has an exposed
keyboard to one that has a flip cover or offering a new service plan that enables more
free weekend minutes would represent incremental innovation
Radical innovation occurs when major improvements are made to a product.

These changes often make the competencies involved in the old technologies
obsolete

sometimes require new marketing channels to be developed

For example, The development of third & 4th generation 3G & 4G wireless

communication technology
Development of new phones greater display and memory capabilities as well as a
stronger battery and/or better power utilization

Radical vs Incremental Innovation

Radicalness is also defined in terms of risk
3G wireless technology required
Investment in new networking equipment and infrastructure
Development of new phones greater display and memory
capabilities as well as a stronger battery and/or better power
utilization
Degree of user acceptance of the technology was unknown
Incremental innovations may involve only a minor change from (or
adjustment to) existing practices.

The radicalness of an innovation is relative; it may change over time or

with respect to different observers.
digital photography a more radical innovation for Kodak (chemical
photography expertise) than for Sony (electronics expertise).

Types of Innovation: New Classification

1.

Hardware vs. Software Innovation

2.

Use-based vs. Function-based vs. Design-based

3.

Disruptive vs. Sustaining Innovation

Hardware vs. Software Innovation

Hardware Innovation
Innovation is done in physical and tangible thing whether it is product or process
- Change in size, design(appearance)
- Change component or redesign architect
Examples: Mobile Phone

Automobile

Digital camera

Software Innovation
Innovation is done in non-physical thing, mostly referred to computer program or User Interface
Examples:
Siri in iPhone 4S

Android OS

Samsungs wi-fi camera

Use- vs. Function- vs. Design-based

Innovation
Use-based Innovation
Use-based Innovation is done by finding the new way of using product

Example: Aspirin

Example: Finasteride

- Originally manufactured as pain-killer

- Research: effect of preventing heart
disease.
- New Use: People start to take aspirin
for their potential heart disease.

- Originally produced for curing prostatic

hypertrophy.
- Research: effect of curing depilatory(hair
loss)
- New Use: Medicine for mens hair loss

Function-based Innovation
Function-based Innovation is done by changing how it works, it can be done by two ways: by
adding new function or optimizing its existing functions performance
Example:
Egg toaster: adding new function
- People often make egg-dishes while
using toaster
- Added egg cooker in toaster

Teflon pan: optimizing current function

- Eggs get scorched and stick to the plate
of the pan while cooking eggs.
- Laminate pan with Teflon

(Use- vs. Function- vs.) Design-based

Innovation
Design-based Innovation
Design-based innovation is innovation done by changing its appearance or structure
with same function to have more value.

- Design for aesthetic purpose:

EX) Extreme slim, the thinnest LCD TV panel by
- Wall-mounting TV design to make living room more stylish and more
LG
-

spacy than living room with previous TV models.

Similar examples: Ceiling-mounted air conditioner

- Design for usability:

EX) Herman Millers Chair

- Chair designed for people who works for hours at computers.
- Continuously adjusting automatically to sitters shifting positions, keeping
sitters spine aligned and healthy.
- $2000 per one chair (ten times of a normal chair)

- Design for efficiency:

EX) Square watermelon in Japan
- Watermelon cultivated in glass box
- Logistics and also makes storage becomes more efficient and convenient.
- Sold for 10,000 yen each (double of a normal watermelon in Japan)

Disruptive vs. Sustaining Innovation

Disruptive Innovation
- Innovation by Improving a product or service in ways that the market does not expect
- Usually done by new entrants in the market (They need to change the rule of game)
Example: iPhone 3 (the first iPhone model)
iPhone3 has many features that have never been seen before with novel design.(all
touch screen without one button, new UI include bounce-back)
Apple become a major mobile phone supplier after launching iPhone3, even though
they were new entrant.

Sustaining Innovation
- Innovation by evolving only existing one with better value, allowing firms within to compete
against each others sustaining improvements.
Example: Current iPhone series
Current model of iPhones feature and design is mainly based on iPhone3
but better quality in terms of display, performance and energy efficiency.

Competence-Enhancing vs CompetenceDestroying Innovation

Competence-enhancing innovations build on the firms existing
knowledge base
Intels Pentium 4 built on the technology for Pentium III.
Turbofans in jet engines, series of breakthroughs in mechanical
watches
Competence-destroying innovations renders a firms existing
competencies obsolete.
Electronic calculators rendered Keuffel & Essers slide rule
expertise obsolete.
Transistors destroyed vacuum tubes or quartz watches killed
(almost) mechanical watches.
Whether an innovation is competence enhancing or competence
destroying depends on the perspective of a particular firm.

Architectural vs Component Innovation

Architectural vs Component Innovation
A component innovation (or modular innovation) entails changes to one
or more components of a product system without significantly affecting
the overall design.
adding gel-filled material to a bicycle seat
An architectural innovation entails changing the overall design of the
system or the way components interact.
transition from high-wheel bicycle to safety bicycle.
In the 1800s, the front wheel of a bicycle has a very large
circumference in order to provide speed; gears did not exist yet
When gears and chains were invented, the bicycle took on a whole
new design
Most architectural innovations require changes in the underlying
components also.

The High Wheel Bicycle

In 1870 the first all metal machine appeared. The
pedals were still attached directly to the front wheel.
Solid rubber tires and the long spokes of the large front
wheel provided a much smoother ride than its
predecessor.
The front wheels became larger and larger as makers realized that the
larger the wheel, the farther you could travel with one rotation of the
pedals.

Safety issue: because the rider sat so high above the

center of gravity, if the front wheel was stopped by a
stone or rut in the road, the entire apparatus rotated
forward on its front axle, and the rider was dropped
unceremoniously on his head.

The Hard-Tired Safety

Improvements in the metals used in the bicycle, enabled
the manufacturing of small chains and sprockets and were
light enough for a human being to power.
The design with two wheels of the same size returned,
with speed provided through the use of gears instead of
large wheels.
They were safer than the high-wheelers but lacked the
long, shock-absorbing spokes of the high-wheelers.
Buyers had to choose between safety and comfort until, a few years later,
when Dr. Dunlop developed the pneumatic tire for his childs bike.

Technology S-Curves

S-Curve is a measure of the speed of adoption of an innovation.

First used by in 1903 by Gabriel Tarde, who first plotted the S-shaped diffusion
curve.
This process has been proposed as the standard life cycle of innovations can be
described using the S-Curve.
Technology improves slowly at first
because it is poorly understood.
Then accelerates as understanding
increases.
Then tapers off as approaches limits.

Stages of the S-Curve

Startup
Growth - Scale
Maturation - Compete
Decline - Transition
Innovation is different at each stage

Challenges

Startup
Survival, market validation, funding

Scale
Increasing market, expanding to new geography, increased manufacturing, hiring

Compete
Increased number of competitors, lower margins, heads down

Transition
Compromises to stay alive, staff layoffs

Innovation within a Company - Apple

Thickness of mechanical watches

Technology S-Curves
Technologies do not always get to reach their
limits
May be displaced by new, discontinuous technology.
A discontinuous technology fulfills a similar market need by
means of an entirely new knowledge base.
E.g., switch from carbon copying to photocopying, or vinyl records to
compact discs

Technological discontinuity may initially have lower

performance than incumbent technology.
E.g., first automobiles were much slower than horse-drawn carriages.

Firms may be reluctant to adopt new technology because

performance improvement is initially slow and costly, and they
may have significant investment in incumbent technology

Discontinuous Technology
If the returns to effort invested in new technology are much higher than
effort invested in the incumbent technology, in the long-run it is more likely
to displace the incumbent technology
Disruptive technology has a steeper s-curve

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Incumbent
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New
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Effort

Disruptive technology has an s-curve that

increases to a higher performance limit

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 As a technology reaches its mature stage, it becomes increasingly vulnerable to

substitute technologies
Example: Mechanical and Electronic Calculators

The diffusion process

1.
2.
3.
4.

Diffusion is the process by which

the acceptance of an innovation--a new product, service, idea or practice
is spread by communication--mass media, salespeople, or word-of-mouth
to members of a social system--target market
over a period of time
Four basic elements of the diffusion process:
The innovation
The channel of communication
The social system
Time

S-Curves in Technology Diffusion (spread of

technology through a population
Adoption is initially slow because the technology is
unfamiliar.
It accelerates as technology becomes better understood.
Eventually market is saturated and rate of new adoptions
declines.
Technology diffusion tends to take far longer than
information diffusion.
Technology may require acquiring complex knowledge or
experience.
Technology may require complementary resources to
make it valuable (e.g., electric lights didnt become
practical until development of bulbs and vacuum pumps,
cameras not valuable without film).

S-Curves in Technology Diffusion

Many technologies become valuable to a wide range of
potential users only after a set of complementary resources
are developed for them.
Example
while the first electric light was invented in 1809 by Humphry Davy,
an English chemist, it did not become practical until the
development of bulbs within which the arc of light would be
encased (first demonstrated by James Bowman Lindsay in 1835) and
vacuum pumps to create a vacuum inside the bulb (the mercury
vacuum pump was invented by Herman Sprengel in 1875). These
early lightbulbs burned for only a few hours. Thomas Alva Edison
built on the work of these earlier inventors when, in1880, he
invented filaments that would enable the light to burn for 1,200
hours

S-Curves in Technology Diffusion

S-curves of diffusion are in part a function of s-curves in technology
improvement: as technologies are better developed, they become more
certain and useful to users, facilitating their adoption
Furthermore, as learning curve and scale advantages accrue to the
technology, the price of finished goods often drops, further accelerating
adoption by users

S-Curves as a Prescriptive Tool

Managers can use data on investment and performance of
their own technologies or data on overall industry
investment and technology performance to map s-curve.
While mapping the technologys s-curve is useful for
gaining a deeper understanding of its rate of improvement
or limits, its use as a prescriptive tool is limited.
True limits of technology may be unknown
Shape of s-curve can be influenced by changes in the
market, component technologies, or complementary
technologies.
Firms that follow s-curve model too closely could end
up switching technologies too soon or too late.

Limitations of S-Curve Model as a

Prescriptive Tool
First, it is rare that the true limits of a technology are known in advance,
and there is often considerable disagreement among firms about what a
technologys limits will be.
Second, the shape of a technologys s-curve is not set in stone. Unexpected
changes in the market, component technologies, or complementary
technologies can shorten or extend the life cycle of a technology.
Furthermore, firms can influence the shape of the s-curve through their
development activities. For example, firms can sometimes stretch the scurve through implementing new development approaches or revamping
the architecture design of the technology

Diffusion of Innovation & Adopter Categories

Diffusion of Innovation & Adopter Categories

Everett M. Rogers created a typology of adopters:
Innovators are the first 2.5% of individuals to adopt an innovation. They
are adventurous, comfortable with a high degree of complexity and
uncertainty, and typically have access to substantial financial resources.
Early Adopters are the next 13.5% to adopt the innovation. They are
well integrated into their social system, and have great potential for
opinion leadership. Other potential adopters look to early adopters for
information and advice, thus early adopters make excellent
"missionaries" for new products or processes.
Early Majority are the next 34%. They adopt innovations slightly before
the average member of a social system. They are typically not opinion
leaders, but they interact frequently with their peers.
Late Majority are the next 34%. They approach innovation with a
skeptical air, and may not adopt the innovation until they feel pressure
from their peers. They may have scarce resources.
Laggards are the last 16%. They base their decisions primarily on past
experience and possess almost no opinion leadership. They are highly
skeptical of innovations and innovators, and must feel certain that a new
innovation will not fail prior to adopting it.

Technology Cycles
Technological change tends to be cyclical:
Each new s-curve ushers in an initial period of turbulence,
followed by rapid improvement, then diminishing returns,
and ultimately is displaced by a new technological
discontinuity.
Utterback and Abernathy characterized the technology cycle
into two phases:
The fluid phase (when there is considerable uncertainty
about the technology and its market; firms experiment
with different product designs in this phase)
After a dominant design emerges (bringing a stable
architecture to the technology), the specific phase begins
(when firms focus on incremental improvements to the
design and manufacturing efficiency).

Technology Cycles
Anderson and Tushman also found that technological change proceeded
cyclically.
Each discontinuity inaugurates a period of turbulence and uncertainty
(era of ferment) until a dominant design is selected, ushering in an era
of incremental change.

Technology Cycles
Anderson and Tushman found that:
A dominant design always rose to command the majority
of market share unless the next discontinuity arrived too
early.
The dominant design was never in the same form as the
original discontinuity, but was also not on the leading
edge of technology. It bundled the features that would
meet the needs of the majority of the market.
During the era of incremental change, firms often cease to
invest in learning about alternative designs and instead focus
on developing competencies related to the dominant design.
This explains in part why incumbent firms may have
difficulty recognizing and reacting to a discontinuous
technology.