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The Dynamic of Technological Innovation

Breakthrough thats when the new replaces the old but

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Unformatted text preview: customer requirements Pay to develop market Develop complementary goods Educate consumers Establish distribution, maintenance, repair networks Risk getting stuck with outdated technology or production equipment Taking big risks, but the reward is out of this world if successful Transition between technologies: Companies build on their existing base As technology approaches the transition point, a fight ensues for attention in old- line companies The new technology may threaten a firm’s core competence and skill base Technology evolves: X- axis: measure of applied effort Y- axis: measure of advancement Graph has two s- curves, one below and one above but further to the right Overlap is where two are competing, but once original one suffers from diminishing returns, while the other has their breakthrough, that’s when the new replaces the old. But old technology can improve more than the new improving technology, so it will not be replaced. WHO WINS? Winner may depend on Market requirements: Time horizon Gas prices Military requirement Marketing/IP Decision Technology Adoption Life Cycle: (Consumers) Bell- shaped curve Innovators at the beg...
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