Understanding the S curve of technology innovation

Though the inception of a new technology seemsnew invention period is characterized by a period of
random, its evolution over time once it comes intoslow initial growth. This is the time when
existence exhibits a reasonably stable pattern whichexperimentation and initial bugs are worked out of
can best be described in terms of performancethe system.
characteristic. 
 1. Rapid improvement – improves at an
The performance characteristic refers to an elementaccelerating phase. The technology improvement
of interest to a designer of a product or a user of aperiod is characterized by rapid and sustained growth.
specific technology.  For example, fiber opticsAs organizations engage in production, experience
against the cables in traditional telephone systemsaccumulates over time accelerating the improvement
provides a better voice clarity. The speed of ain performance characteristic. The technology
computer is another example of performancebecomes vulnerable to substitution or obsolescence
characteristic that is resulted in new technology.when a new or better-performing technology
Technological performance can be expressed inemerges.
terms of any attribute, such as density in the 
electronics industry (number of transistor per chip) or1. Declining improvement – it declines
aircraft speed in miles per hour. The performance ofimprovement.
a technology has a recognized pattern over time 
that, if properly understood, can be of great use in1. Maturity – further improvement becomes very
strategic planning. Technology innovation refers todifficult to achieve. The mature technology period
the changes in performance characteristics of astarts when the upper limit of the technology is
specific technology over time.approached and progress in performance slows
 down. This is when the technology reaches its natural
The life cycle of innovations can therefore belimits as dictated by factors such as physical limits.
described using the s-curve which maps again in a 
different way, ie, growth of revenue or productivityDuring the early phase, a new technology is
against time. In the early stage of a particularintroduced into the market place but its adoption is
innovation, growth is relatively slow as the newlimited to a small group of early adopters and small
product establishes itself. At some point customersniche markets. As the product gains ascendancy,
begin to demand and the product growth increasesnew capabilities are introduced and refined with the
more rapidly. New incremental innovations or changesgoal of meeting the needs of the broadest possible
to the product allow growth to continue. Towardssegment of mainstream users. During this middle
the end of its life cycle, growth slows and may evenphase a dominant design begins to emerge, winning
begin to decline. In the later stages, no amount ofthe allegiance of the market place and also effecting
new investment in that product will yield a normalstandardization of everything from design to
rate of return.manufacturing. The dominant design in turn allows
 heightened competition as new entrants realize
The s-curve is derived from half of a normalopportunities for further innovation based on cost,
distribution curve. There is an assumption that newscale and product performance.
products are likely to have "product life". i.e. aThis is the period of rapid and greatest growth as a
start-up phase, a rapid increase in revenue andtechnology matures and reaches the mainstream. 
eventual decline. In fact the great majority ofDuring the final phase the product reaches market
innovations never gets off the bottom of the curve,saturation.
and never produces normal returns. 
 Some examples of technologies that have followed
What is important is that each technology has athis path can be stated as follows.
number of performance characteristics of a specific 
technology over time. As mentioned earlier, once aThe vacuum tube technology was limited by the
new technology comes into existence, thetube's size and the power consumption of the
performance characteristics of interest show veryheated filament. Both of these factors were natural
little improvement in the early stages of thebarriers to electron conduction in a vacuum tube.
technology.Electronic engineers could not overcome these
This initial stage is followed by a second phase oflimitations. The arrival of the solid-state technology, or
very rapid improvement in the performancetransistor, which permitted electron conduction in solid
characteristic. During the third stage, the performancematerial, changed the physical barriers of size and
characteristic continues to improve, but the rate ofpower. The transistor technology started a new
improvement begins to decline. In the final stage,technology life cycle and rendered the vacuum-tube
very little improvement is visible and the graph thattechnology obsolete.
charts the progress in the performance characteristic 
of a technology over time takes an S-shape.Another example is ceramics, which have higher
 operating temperatures and substitute for metals
The s-curve of technological innovation summarizesused in internal combustion engines; the newer
four major stages in the evolution of a performancetechnology permits better performance of the
characteristic.engines. The performance of the engines can
 continue to improve as a result of a sequence of
1. Emergence – (also known as embryonic stage)newer technologies, each with a higher limit of the
shows little improvement in key performanceperformance parameter of interest.
characteristic. Technology operates far below itsReference
potential. Neither the characteristics of technology nor 
its applicability to market needs may be wellNarayanan, V. K (2001) Managing technology and
understood. A long gestation period exists beforeinnovation for Competitive Advantage, Englewood
attempts are made to produce a technology. ThisCliffs, NJ: Prentice Hall.