TS Newsletter Archive

4.05.2011

Technology Life Cycle

Technology is rapidly changing. Many organizations approach to manage Intellectual property (IP) is a "one-size-fits-all" approach. This leads to organizations to ignore the fact that technology has a unique behavior which is called the "technology life cycle".


This approach leads to organizations to focus on a different technology need instead of aiming to develop the actual stage and plan for the next one.


TLC doesn't follow a straightforward single pace. it resembles more to a "S" shaped where shows an early development stage, followed by a growing, mature and decline steps.




Emerging stage is where the concept of the IP is being conceived. It's rate of improvement is modest and there is not a lead indicator that this IP can be the dominant design since there is a wide variety of technologies catching up on the market.


As an example of the automotive industry, back in the 1900s, gasoline engines lived among the steam and electrical motors trying to be the dominant design for motor vehicles.


During the growing stage technologies catch up on fire and rapidly grow. This turns market to evaluate the offering and adapt it as the "dominant design".


Customers can find it as a powerful solution for a problem they actually face and organizations slowly consider it as part of their business.


Back to the automotive industry example, gasoline motor emerged as the dominant design for motor vehicles, so the industry started to develop improvements for that technology.


The third stage (mature) is where revenue growth starts to decline, lead players are well defined, everyone understands the technology and there is little room for new players to come in. Technology can start to subdivide creating new opportunities for new technology application.


Keeping with the automotive industry example, here is where the different vehicle categories and prices started to be offered to the consumer. A more recent example is the new sport-utility-vehicle (SUV) category is an outcome of a mature industry.


The fourth phase is the declining phase, where technology has reached a plateau. Sometimes, a new technology is taking the place of earlier technology, changing the functionality of it.


The automotive industry doesn’t show yet decline signals. However, there are examples associated to the industry that are on the decline phase. Radial tires are the actual standard when some years ago the bias-ply tires were the dominant design.


This simplified model show the most important features that are important for the business model design and IP management. An important feature is the need for a dominant design to emerge in order to detonate the growth of the technology in the market.


What is clear is that a one-fit-size-all approach to manage IP during the different TLC stages is not the best way to support technology growth and maturity, forcing organizations to adapt their strategies and efforts to accommodate their resources to better support the actual technology life cycle stage of it.

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