Innovation Management:

Systemic Innovation

Technology Innovation

Bringing Technological Ideas and Research Results to Life

Focus Areas

Technology innovation covers innovation derived from research and technology developments that are independent of product and service initiatives. "The best companies maintain roadmaps that define the next technologies they will pursue and the requisite timing of each. These technology roadmaps are matched to their product roadmaps to ensure that the two are synchronized."³ As core technology developments take longer than shorter product and service initiatives, by separating research and invention from product and service development, companies can achieve stretch without incurring too much risk.

Three Categories of Technology Innovation

Source: Centre for Innovation Studies, Canada

Think of these three categories as small, medium and large.

Incremental Innovations are the small  (perhaps 1-2% a year) improvements.  These are described by the Learning curve, and by terms such as "learning by doing”.  One example is the development of “creep capacity “ in the chemical industry. Another is Moore’s Law.  (Graphic) Improvements here are continuous, and these represent one of the few areas in innovation where future improvements can be predicted with any confidence. They cause relatively little disruption.

Radical Innovations are the situations where a totally new technology comes along and displaces the incumbent technology. Examples are transistor replacing the vacuum tube, compact disc replacing long playing records. These changes are discontinuous, not continuous, and frequently cause significant disruption involving changes in industry leadership.

3 Strategies of Market Leaders

General Purpose Technologies is the name that has been coined to describe the really big innovations such as the waterwheel, steam power, electricity, the internal combustion engine, railways, the internet, etc. These innovations are share four characteristics:

1. Wide scope for improvement and elaboration

2. Wide range of uses

3. Potential use in a wide range of products and processes

4. Strongly complementary with other technologies.

Technologies Evolve and Reach Limits

Source: Centre for Innovation Studies, Canada

A frequently seen pattern of evolution of a radical technology is the “S” shaped curve, where you track the evolution of the performance of the technology over time. Performance can be measured in many ways – by a technical measure such as efficiency for a furnace, fuel efficiency for  a car, accuracy for a missile, by cost, or by a customer benefit like convenience.

Key characteristics of this curve are:

Early stages. The technology shows poor performance, and almost always underperforms the technology it eventually replaces. There is a significant flat portion in the curve, where all the problems of the technology are slowly being solved, but the performance scarcely improves. In this period the technology is usually underestimated by its competitors.

In the middle portion of the graph, the problems have been solved and customer acceptance has been achieved. The technology really takes off, helped by learning curve effects.

Finally the technology comes up against its limit, as all avenues to improve the performance have been exhausted, and no further improvement is possible.

 Case in Point  Silicon Valley Companies

Deciding If Your Innovation Portfolio Has Enough Stretch

Adapted from Relentless Growth, Christopher Meyer

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