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Technology S-curves 1

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Christian Sandström holds a PhD from ChalmersUniversity of Technology, Sweden. He writes and speaksabout disruptive innovation and technological change.

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This presentation will introduce the concept ofTechnology S-curves and explain how it can be used. 3

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4

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Performance 5

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Performance Time 6

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Performance A technology’s performance evolvesslowly in the beginning. Time 7

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Performance A technology’s At some point, a performance evolves breakthrough happens and itslowly in the beginning. now improves rapidly. Time 8

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Performance Limits of what is scientifically possible are reached and performance doesn’t increase much more. A technology’s At some point, a performance evolves breakthrough happens and itslowly in the beginning. now improves rapidly. Time 9

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One example: Thickness ofmechanical watches 10

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Inches thick (inverted)1600 1700 1800 1900 11

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Inches thick (inverted) The first mechanicalwatches were asthick as a lemon. 1600 1700 1800 1900 12

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Inches thick Since the early 1900s, mechanical (inverted) watches have not become much thinner. The first mechanicalwatches were asthick as a lemon. 1600 1700 1800 1900 13

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As a technology reaches its mature stage, it becomes increasingly vulnerable to substitute technologies. 14

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Foster (1986):”Toward dawn on Friday, December 13, 1907, the sailing ship Thomas W. Lawson sank off the Scilly Isles in the English Channel. All but the captain and one crew member were lost. This would have been just another Friday the thirteenth shipwreck, but the Thomas Lawson was special. Foster, R.N., Innovation: The Attacker’s Advantage. New York: McKinsey,1986. 15

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Foster (1986): ”Toward dawn on Friday, December 13, 1907, the sailing ship Thomas W. Lawson sank off the Scilly Isles in the English Channel. All but the captain and one crew member were lost. This would have been just another Friday the thirteenth shipwreck, but the Thomas Lawson was special.It was a beautiful, huge ship with seven masts. It had been designed to compete against the new steam-powered vessels that had increasingly taken cargo business away from sailing ships. Constructed by the Fall River Ship and Engine Building Company, the Thomas Lawson could travel at 22 knots if the winds were brisk… Foster, R.N., Innovation: The Attacker’s Advantage. New York: McKinsey,1986. 16

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… But to gain swiftness her designer had to sacrifice maneuverability. She wasunwieldy and difficult to handle. In fact, she was so unstable sha capsized while atanchor during a severe gale. According to one account, she was found one morninglooking ”not unlike the back of a whale… the the vast hull on its side washed by theseas.” No attempt was ever made to design a faster cargo-carrying sailing ship. Thebuilders and their employees sought other things to do. The age of commercial sail 17ended with the Thomas Lawson, and steamships began to rule the seas.”

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Speed (knots)20104-5 1500 1600 1700 1800 1900 18

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Speed (knots) By the early 20th century, sailing ships had reached technological maturity. The Thomas W. Lawson was an attempt to improve the technology beyond what was20 physically possible.104-5 1500 1600 1700 1800 1900 19

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A pattern of displacement may look like this: 20

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Performance Time 21

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Performance Time 22

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Performance The initially lower performance makes it seemingly irrational for firms dominating the previous technology to invest at an early point. Time 23

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Performance As performance then improves rapidly there is a considerable risk that these firms are left behind. The initially lower performance makes it seemingly irrational for firms dominating the previous technology to invest at an early point. Time 24

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One example:Mechanical and Electronic Calculators 25

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Performance / Price By the 1950s, mechanical calculators had reached technological maturity Time 1900 1950 1970 26

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Performance / Price By the 1950s, mechanical calculators had reached technological maturity Electronic calculators were initially more expensive and offered lower performance Time 1900 1950 1970 27

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Performance / Price By the 1950s, mechanical calculators had reached technological maturity. Integrated circuits implied a major breakthrough, electronic calculators became better and cheaper, displacing mechanics within only a few years 1970-1972. Electronic calculators were initially more expensive and offered lower performance. Time 1900 1950 1970 28

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The Technology S-curve is apowerful tool that can be used in order to explain how technologies evolve and displace each other. 29

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Find out more:www.christiansandstrom.org