All technologies are constrained by a physical limit. Their growth in
performance over time follows the familiar S-shaped curve [25]. In theory,
the technical performance (y-axis) should be plotted against the cumulative
investment in the technology (x-axis). In practice, however, it is more
convenient to plot time along the x-axis.
The upper limit of the curve may be determined by a natural physical limit,
such as transistors per square millimeter in the case of semiconductor
integrated circuits.
The S-curve can be partitioned into three stages: early development, rapid growth, and the approach of maturity [26, 27].
Early development
This is the bottom of the curve and represents technical progress before a major market application has been found. It is characterized by:
- a low rate of growth
- high level of investment
- practical applications in specialist areas unmet by other technologies
- and under estimation of the time required to reach point of rapid growth.
Investment in this stage of development involves a significant degree of risk. Take, for example, the development of the integrated circuit industry.
Rapid growth
This is the center part of the curve and is the main period of exploitation. It is characterized by:
- technical uncertainty resulting in different approaches to the application of the technology
- rapid succession of new products with increasingly higher performance
- short product lives
- competitive advantage achieved through short development times
- business success associated with technical expertise
- emergence of new venture companies.
Towards the end of this stage, technical uncertainty diminishes as a dominant design emerges,
resulting in:
- longer product lives
- an increasing emphasis on reducing product cost
- segmentation of the market with products tailored to meet these segments.
Approach of maturity
This is the top part of the curve where the rate of performance improvements diminishes significantly. It is characterized by:
- an absence of radical new products
- market saturation
- industrial concentration resulting in a few dominant companies
- technology focus on cost reductions in manufacturing
- price-based competition resulting in low margins
- an emphasis on quality
- increasingly capital-intensive manufacturing operations.
Would you like to know more about how your technologies fit into this framework?
Come and talk to us.
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