Technology in Business (MGT-111)

BBA Program, Session 2K22

Fall’23

Technological Evolution & Life Cycle

(Week 02)
 Evolution patterns of Technology Development

A process that begins with basic scientific discoveries and ends with
commercial products that are adopted by a wide range of customers

Better
New Product
products
technology introduced
adopted by
invented to market
more people
Technology Refine the
evolves and technology and
performance develop new
improves generations of
products

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 Drivers of technological evolution

• Paradigms where researchers seek answers based on prior knowledge

• Social, economic, and political forces
• Technology trajectories - paths of improvement of a technology on
some performance dimension
• Paradigm shifts necessary to create new opportunities

Incremental Change Radical Change

• Most technological • Some technological

innovation is
incremental
• Involves small
improvements to
existing technologies
innovation is radical
• Involves fundamentally
new ways of solving a
problem

Can you think of examples of incremental and radical technological changes?

MGT-111; BBA; NBS 3
 Technology S-Curve

• Graphical representations of the development of a new technology

• Compare some measure of performance with some measure of effort
• The relationship between effort and performance is typically S-shaped:
– Initially performance improvements per unit of effort are small
– Once key drivers of performance are identified rapid improvement follows
– Diminishing returns as physical limits reached

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 Technological Improvements & Shifting S-Curves

• Happens when an existing

technology reaches the point of
diminishing returns
• A new technology is often
developed to challenge the
existing technology
• Tends to be incremental, building
on prior developments, and
taking place within an existing
paradigm
• Initially, the new technology is
usually inferior to existing
technology on key dimensions
• But the new technology has
greater potential for performance
improvement

Who Shifts the S-Curve; New Entrants or Established Firms?

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Stacked S-curve: Spreadsheets

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 Map any technological innovation over stacked S-
curve.
Also discuss the reasons that caused maturity/plateau/
decline in the technology.

Group Assignment

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 Using Technology S-Curves as a Management Tool

• Incumbents can predict when to invest in a radical new technology

• Limitations
– the inability to identify when to switch technologies
– the failure to incorporate all of the factors that matter to the
decision to switch
– the need for adopters of the new technology to focus on niche
markets before tackling the mainstream of the market
– the existence of alternative ways respond to the introduction of
new technology

How do you tell where you are on the curve?

• Keep track of your past efforts and the results that they yielded.
• If most of your efforts are not delivering any improvement but sometimes yield a
significant jump in performance, then you are doing research.
• If you can routinely predict what efforts will yield results, then you’re doing development
and are in the middle two-thirds of the curve.
• If you had been making progress reliably, but it’s now slowed down considerably despite
continued investment, then you are probably hitting limits.

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 Abernathy-Utterback 3 Phases of Innovation

• Technology evolves through three

phases of innovation
• The development of a radical
innovation leads to a fluid phase,
During this time many firms
enter and compete on the basis of
different product designs
• Eventually, the firms in the
industry converge on a dominant
design, which results in
Transitional phase. Here all
players try to optimize processes
with innovation to improve the
quality and reduce the cost of
their products and services.
• In the last phase Specific phase,
there is reduction in number of
players with incremental
innovation
• After a while, the cycle repeats Product innovation
itself. when technological innovation involves the creation of new goods
and services sold to customers

Process innovation
when technological innovation involves problem solving that
improves the method of creating or delivering a product or service

MGT-111; BBA; NBS 9

 Self reading-Modified Models
Barra’s Reverse Product Cycle Theory
Model for service industries
Stage 1: Adopt a technology from a goods industry to make
services more efficient
Stage 2: Use the technology to make the service more effective
Stage 3: Use the technology to create new services (radical
change)
Henderson and Clark’s Architectural Innovation
A modular innovation is one that changes the components from
which the innovation is created, but not the linkages between
those components
An architectural innovation is one that changes the linkages
between the components, but leaves the components themselves
intact.
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Tushman’s Competence-Enhancing /Destroying
Innovation
Radical new technology does not always undermine the
capabilities of incumbent firms
Competence-enhancing if it makes use of existing knowledge,
skills, abilities structure, design, production processes and
plant and equipment
Competence-destroying if it undermines existing skills,
structures, etc.
Established firms are able to transition to a radical technology
when that technology is competence-enhancing but fail to do
so when it is competence-destroying
Christensen’s Value Networks & Disruptive
Innovation
For new firms: target a new or underserved segment of the
market with a disruptive innovation
For incumbent firms: make sure core technology conforms to the
features of the dominant design because deviation from the
dominant design will make it harder for you to satisfy customers
once that design has emerged
As an incumbent firm, develop a new company to exploit the
disruptive technology, rather than ignoring it, or trying to develop
the technology within the confines of your existing organization
10
 Read more about the taxonomy of architectural
innovation and why incumbent firms fail in the
face of architectural innovation?

Reading Assignment

Henderson and Clark’s Taxonomy of Innovations

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 • Read through Chapter 3 from Shane (2009) and
Schilling (2020)

• Prepare the Case: Apple Watch (B): Would you

Bet on it? (HBS)

Preparation for Next

Week

MGT-111; BBA; NBS 12

 Discuss, Prepare and Present main takeaways from
the Articles
1. Disruptive technologies: Catching the wave
Group Discussions (HBR).
2. Is Tesla Really a Disruptor? (HBR)

MGT-111; BBA; NBS 13