This document introduces the concept of a "Sailing Ship effect", where an established technology facing disruption from a new technology undergoes accelerated improvements just before being displaced. The concept is illustrated using an S-curve to show how a new technology improves rapidly after an initial breakthrough, eventually surpassing the established technology. Examples are given of analog CCTV facing threats from digital IP video, and the automotive industry facing saturated markets. The Sailing Ship effect represents a last attempt by incumbent firms to improve the established technology in response to the disruption threat, even though the new technology ultimately wins out.

1. The Sailing Ship Effect

2. Christian Sandström holds a PhD from Chalmers
University of Technology, Sweden. He writes and speaks
about disruptive innovation and technological change.

3. This presentation introduces
and explains the concept of a
Sailing Ship effect.
3

4. In order to do so, the concept of
a technology S-curve will be
described first.
4

5. 5

6. Performance
Time
6

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

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

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

10. When one technology is
displaced by another
technology, the pattern might
look something like this:
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11. Performance
Time
11

12. Performance
The initially lower
performance makes it
seemingly irrational for
firms dominating the
previous technology to
invest at an early point.
Time
12

13. When the established
technology is threatened, this
usually triggers existing
companies to improve it.
13

14. Such improvements are referred
to as a sailing ship effect.
14

15. This notion comes from an
observation by Gilfillan (1935)
who noted that the best sailing
ships were produced when
steam ships had already
displaced them.
15

16. A Sailing Ship effect can be
illustrated in the following way:
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17. Performance
Time
17

18. Performance
Time
18

19. Performance
The threat of being
displaced triggers
investments in the
established technology,
increasing its
performance.
Time
19

20. Performance But it is too late and the new
technology wins in the long term.
The threat of being
displaced triggers
investments in the
established technology,
increasing its
performance.
Time
20

21. Some examples:
21

22. http://www.hdcctvalliance.com/
“The HDcctv Alliance is the
trade association for the
global HDcctv industry.
HDcctv is the world's only
electrical interface
standard for HD
surveillance video,
providing 100% digital
transmission of
uncompressed HDTV
signals over existing
coax. Seeing is
believing!”
22

23. http://www.hdcctvalliance.com/
“The HDcctv Alliance is the
trade association for the
global HDcctv industry.
HDcctv is the world's only
electrical interface
standard for HD
surveillance video,
providing 100% digital
transmission of
uncompressed HDTV
signals over existing
coax. Seeing is
believing!”
Analog HDCCTV is a contradiction in terms! Why this
notion? And why in 2009? 23

24. Analog CCTV is threatened by
Digital, IP-based video
surveillance.
24

25. As the image quality of IP
surveillance improved and HD
quality was progressively
introduced from 2008 and on,
this put pressure on analog
CCTV companies.
25

26. HDCCTV can thus be regarded
as a sailing ship effect.
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27. Image Quality
Time
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28. Image Quality
CCTV was introduced in the
1950s and improved over
the following decades. Time
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29. Image Quality
IP Video started off with a
lower performance.
CCTV was introduced in the
1950s and improved over
the following decades. Time
29

30. Image Quality
With HD Quality
in 2008, it was
now better than
CCTV.
IP Video started off with a
lower performance.
CCTV was introduced in the
1950s and improved over
the following decades. Time
30

31. Image Quality
Being increasingly threatened, With HD Quality
CCTV companies make som final in 2008, it was
improvements to an obsolete now better than
technology. CCTV.
IP Video started off with a
lower performance.
CCTV was introduced in the
1950s and improved over
the following decades. Time
31

32. Image Quality
Being increasingly threatened, With HD Quality
CCTV companies make som final in 2008, it was
improvements to an obsolete now better than
technology. CCTV.
IP Video started off with a
lower performance.
CCTV was introduced in the
1950s and improved over
the following decades. Time
32

33. Grübler (1990) describes a sailing effect pattern
in the automotive industry:
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34. Grübler (1990) describes a sailing effect pattern
in the automotive industry:
“It is as if the industry itself anticipates the approaching
saturating markets and tries to gain ground by
accelerating the pace of incremental innovations. Note
that during periods of steady, regular high growth rates
(the steep part of the automobile diffusion curve) the
rates of technological change appeared to be much
slower.
Faced with almost saturated markets, the industry
appears to be forced to rapidly introduce technological
innovations as part of the competitive "elbowing" in
the struggle for market shares.”
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35. Sources
Gilfillan, S.C., Inventing the Ship, Chicago, Follett
Publishing Co, 1935.
Grübler, A. (1990) The Rise and Fall of Infrastructures -
Dynamics of Evolution and Technological Change in
Transport, Physica-Verlag.

36. Find out more:
www.christiansandstrom.org