Disruptive Innovation
Week # 5


Recognizing the Potential of an Innovation
Think Bubbles (Quizzing to understand the customers’
experiential context pp. 50-56)
Instructor:
J. Christopher Westland, Professor, ISMT
Time:
Tue & Thu 1:30pm-2:50pmVenue: Rm. 4333Duration: 5 Sep – 7 Dec
Text.
McGrath & MacMillan, The Entrepreneurial Mindset, HBS Press 2000
Contact:
Office: 852 2358 7643
Email: westland@ust.hk
Fax: 852 2358 2421
URL: http://teaching.ust.hk/~ismt302/
Background Theory (Recap)
Who Profits from Innovations? (Teece)

Two factors are instrumental to profiting from an innovation


Imitability and
Complementary Assets
Complementary Assets
Free or Unimportant
Profit is Difficult
Tightly held
Holder of
complementary assets
High
Imitability
Inventor
Inventory or party with
bargaining power
Low
What Knowledge underpins an
Innovation (Abernathy-Clark)

Two kinds of knowledge underpin an innovation



Technological
Market
Incumbents Fail when they Fail to “Get” one or the other type of Knowledge
Technical Capabilities
Preserved
Regular
Destroyed
Revolutionary
Preserved
Market Capabilities
Niche
Architectural
Destroyed
What Knowledge underpins an
Innovation (Henderson-Clark)

Products are made up of components (even services)

There exist two kinds of relevant knowledge


Component
Architectural
Architectural Knowledge
Preserved
Incremental
Destroyed
Architectural
Preserved
Component Knowldge
Modular
Radical
Destroyed
Dynamic Models of Innovation

In the previous models

Only the invention or market commercialization
changes


All else is fixed in time
In Dynamic Models

The characteristics of the Environment and Product

Change over time
Utterback-Abernathy Dynamic Model

Three Phase (stage) Model

Fluid phase


Transitional phase


Mainly lab based or custom applications of technology
Standardization of components, and consumer-producer interaction lead to dominant design
Specific phase

Products built around the dominant design proliferate; innovation is incremental
State of Evolution of Tech
Era of Ferment
High Uncertainty
High influence of
nontechnical factors
Era of Incremental Change
Medium Uncertainty
High influence of
nontechnical factors
High
Complexity
Little Uncertainty
Low influence of
nontechnical factors
Near Certainty
Nontechnical factors
may be ignored
Low
Some Thoughts: The sort of People a Firm
Needs to Hire in order to Innovate?

Idea Generators


Gatekeepers & Boundary Spanners


Sell the innovation to the firm
Sponsors (Coach, Mentor)


Conduits for knowledge from other firms and labs
Champions (Entrepreneurs, Evangelists)


Can sift through large quantities of technological and market
data to identify ‘innovations’
Senior level manager who provides behind the scenes
support, access to resources, and protection from political
foes
Project Managers

Planners with discipline; one-stop decision making shop
The Importance of Organization
Structure

To be successful a firm’s organizational
structure has to effectively coordinate and
integrate:




R&D activities with
Marketing activities
How does 3M do this?
How would you do this at your firm?
The Innovator’s Dilemma
Recap: Disruptive Innovation and
The Attacker's Advantage
Disruptive Innovations

They are


(1) Architectural; and
(2) Radical
Architectural Knowledge
Technical Capabilities
Preserved
Regular
Preserved
Destroyed
Revolutionary
Preserved
Incremental
Destroyed
Architectural
Market Capabilities
Niche
Architectural
Preserved
Component Knowldge
Destroyed
Modular
Radical
Destroyed
Basic Concept:
Technology Acceleration fosters Attack from Below
60000
Cost/MIPS
50000
40000
30000
20000
10000
0
1

2
3
4
Moore’s Law, Gilder’s Law, etc.
Make
5
6
7
9
10
11
Tim e
rapidly accelerating technology ‘free’ at some point in the
future
Differentiates
The
8
between sustainable and disruptive
so called ‘innovators dilemma’
12
13
14
Giovanni Dosi’s
“Technology Trajectories”
And the Attack from Below
Industry Dynamics:
Technology’s impact on Substitutes

Between 1976 and
1995


129 Disk drive
manufacturers entered
the market
109 Disk drive
manufacturers exited
Example:
Four Stages in Technological Substitution
Digital Cameras
Four Stages in Technological Substitution
Digital Cameras
Disruptive Innovation in
Disk Storage
Example: Disk Storage
Storage Pre-1950: IBM M80 Sorter and M77 Collator
Storage
5 MB in 1952
5-10 Megabytes in 1973 (14”)
Shrink …shrink …
shrink

20MB Seagate (5.25”)
c. 1986

100MB Conner (3.5”)
c. 1990

1000MB IBM (1”) c.
2000
Darwin Rules

Between 1976 and 1995



1970s (after DL/1)





Conner, etc.
1989+ (2.5” Winchester)


Seagate, Miniscribe, Computer Memories, Intl. Memories
1987+ (3.5” Winchester)


Shugart Assoc., Micropolis, Priam, Quantum
1985+ (5.25” Winchester)


Plug Compatible and OEM
IBM,Diablo, CDC, DEC, Storage Tech, Ampex
2/3rds never introduced 8” drives
1980s (8” Winchester)


129 Disk drive manufacturers entered the market
109 Disk drive manufacturers existed
Prarietek, etc.
1992+ (1.8” Winchester)
… and so forth
Tech Trajectories
Disk Capacity Demanded vs. Capacity Supplied
The Industry Dynamics of
‘Attack from Below’
1.
Technology Cost-to-Performance accelerates
1.
2.
2.
Substitute products accelerate on new
performance parameters
1.
2.
3.
At an exponential rate
With a constant year-on-year growth
Creating a sneak attack
At the low profitability end of an established firm’s market
As substitute technologies accelerate, they
consume all of the market of established firms
1.
Driving previously successful firms out of business
Technologies that ‘Shrink’?
Cost-to-performance acceleration
How did the ‘Big Guys’ fare?
Defeated firms were not stupid

They were held captive by their customers




While new entrants tooled for new markets
And in the process consumed old markets
The only way to manage this successfully …
… is Darwinian evolution
Successful Transition through
Creative Disruption

Control Data




Conner for 5.25”



60% of 14” market from 1965-82
Missed the 8” market
Set up 8” production in Oklahoma city, for successful entry
Spin-off from Seagate and Miniscribe
Compaq pushed their market
Quantum retains 80% of spin-off Plus Development Corp (for 3.5”
drives)

Plus consumes Quantum


1994 largest producer in world
Micropolis: Transition by Managerial Force



Founded in 1978 by Stuart Mabon for 8” drives
1982, Mabon read the trajectories, and retooled for 5.25”
They walked away from existing customers and nearly broke the firm
More Disruptive Change

Incumbents fail to innovate


Because they spend too much time listening to
their existing customers
Here’s an example from the Excavator Industry
Caterpillar
and the Mechanical Excavator Industry

Cable-driven Steam Shovel

Mnfd by Osgood General
The first upheaval


Steam shovels (mechanical
excavators) were invented in
the early 1800s
The first great upheaval
occurred in the 1920s





When gasoline replaced
steam as a power source
23 of the 25 largest makers of
steam shovels
Successfully negotiated the
transition to gasoline power
There were also around 20
new entrants
And innovation continued with
diesel and electric power
The second upheaval

Hydraulics developed for aircraft in WWII





Percolated into industry throughout the 1950s-60s
Replaced cables
Only 4 of the top 30 excavator manufacturers in the 1950s survived this
transition into the 1970s
The new diesel-hydraulic entrants included:

Caterpillar

As well as John Deere, Drott, Ford, International Harvester, Hitachi, Komatsu, Case,
Bamford, Poclain
What happened?

How did Cat get its start?
Hydraulics

The first hydraulic excavator was developed in 1947



Limited by the power and strength of available hydraulic pumps’ seals,
the capacity of early machines was minuscule
And of no use in the major markets



Excavation
Sewer contracting
Entrants like Cat developed new applications for their small capacity
hydraulic excavator





As attachments for the back of small industrial and farm tractors
They called them ‘backhoes
Useful to residential contractors, farmers, etc. to dig narrow ditches for sewer, cable,
etc.
Jobs done by hand in the past
and too small for the imprecise cable driven excavators
Stealthy Cat

Entrants like Cat developed new metrics to advertise
their products

Rather than measuring the quantity of earth that could be
moved


Their product literature emphasized



as the cable-driven manufacturers advertised
Shovel width (narrow being better for contractors)
Speed and maneuverability of the tractor
So the bigger companies like Link Belt

Didn’t even perceive Caterpillar as a competitor


Because they spoke a different language
To different customers
Hydraulics and Performance Trajectories in the
Mechanical Excavator Market
Caterpillar’s Climb

By 1974, the hydraulic excavators



Had the muscle to lift 10 cubic yards of dirt
A rate of improvement that outstripped demand in any of the
excavator markets
In contrast, the largest makers of cable-driven excavators




Bucyrus Erie and Northwest Engineering
Built better cable-driven machines, for their most profitable customers
Because to do otherwise was not profit-maximizing
They logged record profits until 1966

When hydraulic excavators rapidly took over all the excavation
markets
Two Tragedies


(1) Not reaching your goal
(2) Reaching your goal




Once a goal is reached
Direction is lost
Until another goal is set
Encore Problem: Once you’ve succeeded,

How do you convince others that your success is
‘sustainable’

and not just luck
New Entrants went Hydraulic
Major companies never introduced a successful hydraulic excavator
Why Cable went Bust

Once both cable-driven and hydraulic-driven excavators could
satisfy all of the mainstream markets

Excavation contractors no longer needed to base their choice of equipment



Both were good enough, and cable vs. hydraulic became irrelevant
Contractors found that hydraulic machines

were much less prone to breakdowns



on which had longer reach and greater bucket capacity
than cable-driven excavators
Not to mention the loss of life and limb resulting from a cable snapping
Cable’s demise was not due to poor knowledge or strategy
How Japanese Manufacturers
Sneaked up on Cat

Entrants like Komatsu developed new metrics to advertise their products

Caterpillar measured




Komatsu’s product literature emphasized



That Komatsu equipment needed far less service
Making them less dependent on their local dealer
Since Caterpillar’s strength was its dealer network





Amount of earth moved
Shovel width (narrow being better for contractors)
Speed and maneuverability of the tractor
Komatsu’s new and distinctive strategy
Disrupted their customer reach
Kept customers out of Cat’s showrooms
And convinced customers that this was good
Caterpillar didn’t perceive Komatsu as a major competitor


Because they spoke a different language
To different customers
Some Lessons an Heuristics From the
Back-Hoe Industry
How Knowledge Failures
Lead to Competitive Failures
Heuristics
Thoughts on Innovation
Obsolescence

Affected by 3 factors:




Quality
Style
Quality
Functionality
Everything grows obsolete


Functionality
Just at different rates
The opposite of Technology Acceleration
Style
Efficiency vs. Effectiveness

Efficiency = Doing Things Right


i.e., with minimum use of resources
Effectiveness = Doing ‘Right’ Thing

i.e., doing the high priority tasks first
Red Queen’s Challenge

When you have to run as fast as
possible to stay in one place

A normal state of affairs today


With short product life cycles
With global entry of competitors
Sources of Innovations
What kinds of sources exist?
Where do you find innovations?
Two Sources of Innovation
(Eric von Hippel)

Functional (functional relationship through which firms and
individuals derive benefits from innovation, e.g., customer
or manufacturer)




Where do the innovations come from?
Do they come from within the firm or from someplace
else?
Where exactly within the firm?
Circumstantial (under what circumstances will they
benefit)

Under what circumstances can one expect innovation?

When can one expect innovation?
Functional Sources of Innovation
Handset Makers
1.
2.
3.
4.
5.
Internal to Value Map (bubbles)
External Value Map (boxes)
Competitors & related industries
University, government & private labs
Other nations / regions


3rd party
Applications
Developers
cost: 70 million
pounds annual; 703
employees
Co
st
of
pr
ov
id
in
g
These costs
tend to be relatively
fixed, recurring
annual costs
Captive relationships tend to
be contractual (compare to
Palm O/S)
The entire market
(HW, SW, Telecom Networks)
is driven by "killer" applications
fu
Ca
pti
ve
nc
tio
ns
es
enu
Rev
sing
n
e
Lic
Symbian O/S
Ca
ptiv
e
Programming / Sales
operations
Mobile Network
Operators (600,
though 10
control 50%
subscribers
These revenues
tend to grow by the square
of the MNOs subscriber base
‘Complementarity of several sources may amplify and
accelerate innovation
The last two sources are strongly influenced by
society and governments
Social characteristics that promote innovation and
success at a commercial level?

Prior experience tells us that societies which:







operate, manage and build instruments of production
create, adapt and master new technologies
impart expertise and knowledge to the young
choose people for jobs by competence and relative merit
promote and demote on basis of performance
encourage initiative, competition and emulation
let people to enjoy and employ the fruits of their labor, enterprise and
creativity

(adapted from David Landes (1998) The Wealth and Poverty of Nations, New
York: Norton, chapters 27-29)
Government has a role to play

Where innovation has flourished in the past, the government does the following:









encourage saving and investment
enforce rights of contract
secure rights of personal liberty against tyranny and crime
provide stable government,
though not necessarily democratic
provide responsive government
provide no rents or favors for government position
have governments that are moderate, efficient and ungreedy
Direct government involvement in innovation tends to favor the creation and
maintenance of powerful, conservative, expensive scientific bureaucracies which rob
would-be innovators of scarce talent


.e.g., Sematech, MITI, Malaysian projects, US Aerospace and NASA, European Space
Agency.
(adapted from Landes’ The Wealth and Poverty of Nations )
Circumstantial Sources of
Innovation



Planned firm activities
Serendipity (fortunate accidents)
Change (creative destruction)
For Example:
Consider the Electric Lighting Innovation
Thomas Alva Edison didn’t invent
the lightbulb


Humphry Davy, an English chemist, invented the first electric
light in 1809

Joseph Wilson Swan, an English physicist, was the first
person to invent a practical and longer-lasting electric
lightbulb in 1878
But new technology



Offered new customers
Substituting for gas and arc lighting
… and a new competitor
Edison’s System

“all parts of the system must be constructed with
reference to all other parts,, since in one sense, all
the s form one machine part

1878 - Thomas Alva Edison, referring to an electrical grid in his article
on the phonograph in the North American Review

Edison and his team of engineers in Menlo Park,
N.J., spent years building the entire electric system,
from light sockets and safety fuses to generating
facilities and the wiring network.

Edison beat all his predecessors at one crucial task:
managing the whole process of innovation, from
light-bulb moment to final product
Edison’s Strategy

Develop the working DC system


When George Westinghouse introduced a
superior AC system


Protect it with patents
He attacked with a smear campaign
He eventually switched to AC systems when
customers demanded
Microsoft’s O/S Innovation
The most profitable innovation in history

Linking & Leveraging
Strategy




Get the business
Create the standard
Leverage the business
Crush the competition

An Early Competitor
Case Study in MS-DOS

MS purchased Seattle Computer Products' QDOS

for Quick and Dirty Operating System (written by Tim Paterson)

Written as a version of CP/M, with 4000 lines of assembler.

IBM tested Gates’ cleaned up MSDOS 1.0, finding well over 300 bugs, and
decided to rewrite the program


This is why PC-DOS is copyrighted by both IBM and Microsoft.
Gates locked up the IBM deal with the help of his father’s law
firm

est. value of services $250,000
Case Study in DOS

You could order one of three operating systems for
your original IBM PC:

Digital Research's CP/M-86 for $495

UCSD p-System for several hundred dollars


this was a souped-up BASIC operating systems like that
used by the Commodore 64

but portable like Java
DOS 1.0 for $39.95
Case Study in DOS


Microsoft’s OEM brochure touted future
enhancements to DOS:

Unix-compatible pipes, process forks, and multitasking, as
well as graphics and cursor positioning, kanji support,
multi-user and hard disk support, and networking

None of these was ever added
Innovation = Invention + Commercialization!
Innovation Transfer

Across functional boundaries


Absorptive and Transmission Capacities



bounded rationality on the receiving side
Cultural differences


the stovepipes
Culture = shared ‘values’ (what’s important) + shared ‘beliefs’
(what works or what’s true)
Nature of the innovation
Timing
Science & Technology
What are they? How are they related?
Influence / feedback
Verbally
Encoded
Information
Verbally
Encoded
Information
Science
Technology
Influence / feedback
Verbally Encoded
Information
*publications
*patents
Physically & Verbally Encoded
Information
*products & services
*documentatiom
*publications
*patents
Practicum
Industrial Design Competition
(Design due by end of semester)
Activity #1: Select an Invention


Select an invention from he set of available handouts
The Innovation workshop will comprise the following:





Work in groups of three to four
45 Minutes to prepare answers and presentation for Questions #1 to
#9
15 Minutes for presentation and Q&A (by class and myself) for each
group (~5-7)
Possible second round (time permitting)
Remember: Innovation = Invention + Commercialization

Money is important

Innovation  Utility  Commercial value
Activity #2:
Commercialization
Turn your ‘Invention’ into a Profitable Innovation
Tasks:

Describe the target customer for the company’s
product (age, income, medical history, and other
demographics)
Draw a value map describing your companies
proposed business model, and provide some
indication of the costs and revenues that will flow into
and out of the business
What will differentiate your innovation from
competitors’ in the customer’s minds?
1.
2.
3.

List the three features that are important to the target
customer, and rank them from most to least important.
Question #1:
Commercialization
How do you turn your ‘Invention’ into a Profitable Innovation ?
Define how you will measure the usefulness or attractiveness of
each of these features to the target customer.
1.

2.
Define your innovation’s top competitor in each of these 3
features

a company marketing a competitive product or service



This performance metric should be a numerical measure
Are these companies profitable?
How big (approximately) is their business?
Think: Low-cost or Differentiated Products?

Question #1: Function of Consumption Chain
Analysis
A complement to quizzing …


And (perhaps) quizzing done from a different (more
graphical) perspective
Consumption Chain Analysis

Works from the premise that





opportunities for redifferentiation
lurk at every step and decision that your customers take
From the time they first become aware of their need for your
product or service
To the time thy finally dispose of the remnants of the used up
product
Rather than ‘stream of consciousness’

It is time-sequential

Question #1: Consumption Chain Analysis
A complement to quizzing …


And (perhaps) quizzing done from a different (more
graphical) perspective
Consumption Chain Analysis

Works from the premise that





opportunities for redifferentiation
lurk at every step and decision that your customers take
From the time they first become aware of their need for your
product or service
To the time thy finally dispose of the remnants of the used up
product
Rather than ‘stream of consciousness’

It is time-sequential
Question #1: Consumption Chain Analysis
Selection
Search
Order and
purchase
Awareness
of need
Delivery
Repairs and
Returns
Payment
Final disposal
Service
Financing
Use
Receipt
Storage and
trasport
Installation
and Assembly
Question #1: Every Link in the Consumption Chain has its
Own Attribute Map

The Attribute Map compares your product to those
of others
Discriminato Energize
Basic
r
r
Positive
Nonnegotiabl
e
Differentiator
Exciter
Negative Tolerable
Dissatisfier
Enrager
Neutral
Parallel
So What?
Question #1: At each step, remember to
Keep It Simple

The simplest way to change a business
model


Is to redesign your offerings … i.e., products and
services
Aim for blockbuster design


One that so appeals to your target customers
That they feel almost compelled to buy from you
Question #1:
The Purpose of a Business
is to Create a Customer
-- Peter Drucker

Even if you create marvelous inventions



Business customers are especially impatient


Your customers won’t care
Unless that is exactly what they need
With any product that doesn’t help them gain
competitive advantage
Yet your firm wants to build products that take
advantage

Of their Core Competences
Question #1: Creative Tension

Core Competences are the things that the firm does


That they do better than other firms
That are the source of their competitive advantage

They are not necessarily what the customer wants
(!!)

Firms establish their core competences by:




Investing in people
Investing in assets, plant and land
Identifying and focusing their mission
The Firm’s core competences are often those of its
CEO and management
Question #1: Steps for Quizzing / MM/ Attribute
Maps
1.
2.
3.
4.
5.
6.
7.
For each customer segment sketch the consumption
chain
Identify the trigger events that precipitate customer
movement from link to link
Put in place procedures to alert you when the trigger is
pulled (and plan your response)
Quiz to assess needs that may not be met currently
Create an attribute map for each significant link in the
Consumption Chain
Use your knowledge of Customer Experience to create
Blockbuster Products
Put the ideas you generate into your opportunity register
Repeat this process for each class of stakeholders
Question #2: Commercialization
How do you identify your Co-opetitors?

Define your innovation’s top competitor in each of
these 3 features (i.e., a company marketing a
competitive product or service). Choose one
competitor for each feature.

Henderson and Clark model of knowledge
underpinning innovation: Component and
Architectural.


Describe the degree of reengineering of the firms business
model and core competences that will be required by their
innovation
Describe the product knowledge that you will be required to
acquire in the development and commercialization of your
invention
Question #3: What Knowledge underpins your
Innovation?

(Henderson-Clark) Products are
made up of components (even
services)


There exist two kinds of relevant knowledge

Incremental
Preserved
Destroyed
Architectural

Technological
Market
Incumbents Fail when they Fail to “Get” one or
the other type of Knowledge
Technical Capabilities
Architectural Knowledge
Preserved


Component
Architectural

(Abernathy-Clark) Two kinds of
knowledge underpin an innovation
Preserved
Regular
Destroyed
Revolutionary
Market Capabilities
Component Knowldge
Modular
Radical
Destroyed
Preserved
Niche
Architectural
Destroyed
What Kind of Business Do you Need to Be to Commercialize this Innovation?
Question #4: Who will Profit from you Innovation? (Teece)

Two factors are instrumental to profiting from an innovation


Imitability and
Complementary Assets
Complementary Assets
Free or Unimportant
Profit is Difficult
Tightly held
Holder of
complementary assets
High
Imitability
Inventor
Inventory or party with
bargaining power
Low
Questions #3 and #4: What Kind of Business Do you
Need to Be to Commercialize this Innovation?

Abernathy-Clark framework of knowledge that underpins an
innovation are Technical and Market.



Describe the degree of reengineering of the firms business model
and core competences that will be required by a new innovation.
Describe the product knowledge that you will be required to acquire
in the development and commercialization of your invention
Teece framework that describes profit from an innovation
through Imitability and Complementary Assets.


who will profit from the invention.
Describe the product knowledge that you will be required to acquire
in the development and commercialization of your invention
Question #5: What sort of people does Your Firm Need
to Hire in order to Innovate?

Idea Generators


Gatekeepers & Boundary Spanners


Sell the innovation to the firm
Sponsors (Coach, Mentor)


Conduits for knowledge from other firms and labs
Champions (Entrepreneurs, Evangelists)


Can sift through large quantities of technological and market data to identify
‘innovations’
Senior level manager who provides behind the scenes support, access to
resources, and protection from political foes
Project Managers

Planners with discipline; one-stop decision making shop
Question #6: Complementarity
What other products are needed to complete your
Commercialization?

What are your ‘Killer Apps’?

Who are your ‘Co-opetitors’ and what essential assets do they control?

Most economically significant modern products have little value on their
own

They require complementary products from many firms to be of value





Petroleum has little use without internal combustion engines
Or Cars without Roads (US Road costs are around $5-10 per gallon of gasoline)
Or Electricity without Electric Motors
Or iPods without MP3s
… you get the idea
Sustainability
Where
to use Financial
Dynamics
Different
Industries;
Different
Rates
of Change
(and what kinds of corporate assets or services generate value)
Mainly Tangible Assets
Mainly Knowledge-Intangible Assets
DCF &Traditional
Financial Dynamics is Necessary
Future
Volatile
for
Accurateis
Valuation
Past is indicator
of Future
Valuation Methods
are Accurate
Property,Mortgages,
Mining & Extractive
Industries
Commodity
Manufacturing
(e.g., paper)
Utilities &
Voice Telephony
Branded-Luxury
Merchandise
Local Services
(e.g., Legal,
Government)
Retailing,
Complex
Education &
Manufacturing
Pure R&D
(e.g., cars, chips)
Data Telephony,
Global Network
Services (e.g.,shipping)
Insurance,
Electronic Markets
& Risk Management
Software,
Videogames,
Cinema, Music,
News
Question #7: How Sustainable is your
Business?

Now that you have devised an innovation strategy

Tell us if it is sustainable

What phase are you in?

Fluid phase


Transitional phase



Standardization of components, and consumer-producer interaction lead to dominant
design
Specific phase


Mainly lab based or custom applications of technology
Products built around the dominant design proliferate; innovation is incremental
How long will the current arrangement of 5-forces stay put?
What disruptive innovations are predicted?

When will they replace your invention and undermine its commercial value?
Sustainability
Utterback-Abernathy Dynamic Model
Does your strategy fit with the Phase of technology development that
your invention is in?

Three Phase (stage) Model

Fluid phase


Transitional phase


Mainly lab based or custom applications of technology
Standardization of components, and consumer-producer interaction lead to dominant design
Specific phase

Products built around the dominant design proliferate; innovation is incremental
State of Evolution of Tech
Era of Ferment
High Uncertainty
High influence of
nontechnical factors
Era of Incremental Change
Medium Uncertainty
High influence of
nontechnical factors
High
Complexity
Little Uncertainty
Low influence of
nontechnical factors
Near Certainty
Nontechnical factors
may be ignored
Low
Sustainability
S-Curve (Foster and others)

Eras of incremental change terminate with a ‘discontinuity’


We look for limits on the technology’s life cycle using knowledge of the
technology's physical limits
 E.g., Moore’s Law will run out on current platforms at 2013
Advance of a technology is a function of development effort
Rate of Tech Progress
Rate of Supercomputer Progress
Physical Limit
Communication Bottlenecks
Multi-processor
Speed of Light
Single-processor
Effort
Effort on Supercomputing