Technology S-Curve

By the end of this session, learner’s will be able to understand:

 What is S Curve of Technology Evolution
• Although the initial development of new technology
often appears to be a random process, once a technology comes
into existence, its evolution over time displays a reasonable
stable pattern.
• Technology Evolution refers to changes in the
performance characteristics of specific technology over time
• It is generally perceived that technology evolution
follows an S shape curve.
• S-curve of technological evolution” is widely cited
to determine at what point managers should shift investments
from a mature technology to a new one.
• [ Exceptions: A study done by Sood and Tellis
suggests that many technological evolutions do not follow S shape
curve.]
 What is S Curve of Technology
Evolution
•S curve of technological evolution summary

major stages in the evolution of performance

characteristics:
• Emergence : when the new technology comes
into existence,
• but shows little improvement in its
performance characteristics.
What is S Curve of Technology Evolution?

Performance Characteristics Stage 1 Stage 2 Stage 3 Stage 4

Time
 What is S Curve of Technology Evolution
S curve shape of technological evolution occurs due to following reasons /
effects:
• Learning processes – which, in the first stage,
generates more or less stable design & process and in the second stage
generates rapid improvements
• Technology Limits – Once a technology reaches full
potential, technology limits come into play during later
stages. These technology limits are also known a
technology frontiers –as called by Dosi. In later stages,
radical breakthrough occurs, as a result new technology
emerges which replaces existing technology, This is known as Technology
Progression
• The performance of the newer technology initially is
lower than that of the older technology, but because of
their relative positions on their respective S-curves,
the performance of the newer technology soon surpasses that of the
older.
What is S Curve of Technology Evolution?

Performance Characteristics
Technology Progression

Physical limits of technology

<Technology
Regime 2 Technology
Regime 1 >

Time
What is technology strategy ?
• According to Oxford English Dictionary --- the
word ‘Strategy’ means:
– A plan designed to achieve a long-term aim
– The planning and directing of military
activity in a war or battle.
• According to Mintzberg and Quinn, a strategy is
the pattern or plan that integrates a nation’s
or organization’s major goals, policies and
action sequences into a chosen whole.
What is technology strategy ?
• A strategy serves to allocate a nation’s or
organization’s resources into a unique and viable
posture which is based on its strengths and
weaknesses, and anticipated changes in the
environment.
• Technology Strategy is the way or plan
of attaining technological goals and
technological changes.
• Technology strategies are formulated at
the national level and at the enterprise
level.
 Technology Strategy at National level
• At national level, two types of strategy options are usually explored i.e
internalisation oriented strategy & externalisation oriented startegy. A nation
may adopt any of the two technology strategy or suitable combination of both.
Internalization Oriented Strategy
• This strategy aims at seeking technological development with an objective to
become internally self reliant.
• This strategy aims at seeking technology transfer by TNCs / MNCs via Foreign
Direct Investment (FDI).
• The strategy seeks proactive role in attracting TNCs / MNCs and focusses on
ensuring a stable macro-economic environment & good supportive infrastructure.
Technology Strategy at National level
Externalization Oriented Strategy
• This strategy aims at seeking technological development
with an objective to tap external market.
• Under this strategy, there is restricted role for FDI.
This strategy seeks to foster / encourage
indigenous technology development i.e developing
domestic technology capabilities in general or in
selected strategic industries.
• Some examples of this type of strategy are : Minority
joint ventures (with minor share to foreign
collaborator), Technolgical assitance to domestic firms,
Encouraging import of capital Goods
 Technology Strategy at Enterprise
level
• According Bentz, Martino & Mintzberg
Technological
to Strategy at enterprise level means
--- “A formal set of enterprise intentions that
allocates available resources and sets priorties
based on clearly stated technological and
enterprise objectives and a perceived environment
in which the process is to be embedded.
 Technology Strategy at Enterprise
According to Porter- following three factors
influence enterprise’s Technology Strategy :
• Sustainability of technological lead : Technological
leadership can be sustained only if competitors
cannot copy it.
• First mover advantages : Enterprise gets many
advantages like increased reputation, pre-empting
competition, early profits, new sales etc,
• First mover disadvantages – Certain disadvantages
and risks can adversly affect the first mover like
cost of regulatory approvals, cost of educating
buyers, demand uncertainity, low cost imitation by
competitors, risk of technological discontinuities of
existing technology / products / processes
Technology Development /Generation
In this session, we have discussed about