TECHNOLOGY LIFE CYCLE
TECHNOLOGICAL CHANGE
Technological growth is the result of new inventions and
innovations. Every invention is something new and in most cases it is a
combination of already existing technological elements. An invention becomes
innovation when applied for the first time. An innovation which has little
disruptive impact on behaviour pattern is called a continuous innovation
(e.g. fluoride tooth paste). In such cases alteration of an existing product
rather than creation of a new product is involved. There are also dynamically
continuous innovations which do not involve new consumption patterns but
involve the creation of a new product or the alteration of the existing one
(e.g. electrical tooth brush). Further, there are discontinuous innovations,
which involve the establishment of new behaviour patterns and the creation of
previously unknown products such as automobiles, televisions, computers etc.
The process of technological change is clearly linked to
innovation. Technological change occurs through substitution and diffusion. The
simplest form of technological substitution occurs when a new technology
captures over a period of time a substantial share of the market from an
existing older technology. The new technology is better and economically more
viable. Thus after it has gained small market share, it is likely to become
more 'competitive with time. Therefore, once a substitution has begun, it is highly
profitable to eventually take over the available market. This is a simple
one-to-one technological substitution process.
There is a broad spectrum of factors, which can have an impact
on the process of substitution and diffusion. These can be broadly classified
into (a) factors affecting the demand for a technology; and (b) factors
affecting the supply of a technology.
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TECHNOLOGY LIFE CYCLE
The life span of various technologies can be conveniently
identified as consisting of four distinct stages, all of which taken together
form the ’Technology Life Cycle'. The stages of technology life cycle
are innovation,
syndication, diffusion, and substitution.
Innovation stage: This stage represents the birth of a new product, material or process
resulting from R&D activities. In R&D laboratories, new ideas are
generated by ’need pull' and 'knowledge push' factors. Depending
upon the resource allocation and also the change element, the time taken in the
innovation stage as well as in the subsequent stages varies widely.
Syndication stage: This stage represents the demonstration (pilot production) and commercialization
of a new technology (product, material or process) with potential for immediate
utilisation. Many innovations are shelved in R&D laboratories. Only a very
small percentage of these are commercialized. Commercialization of research
outcomes depends on technical as well as non-technical (mostly economic)
factors.
Diffusion stage: This represents the market penetration of a new
technology through acceptance of the innovation by potential users of the
technology. But supply and demand side factors jointly influence the rate of
diffusion.
Substitution stage: This last stage represents the decline in the use and eventual extension
of a technology due to replacement by another technology. Many technical and
non-technical factors influence the rate of substitution. The time taken in the
substitution stage depends on the market dynamics.
DIFFUSION AND GROWTH OF TECHNOLOGIES
There is another way of looking at the technology life from the
perspective of growth and diffusion. Every technology eventually reaches a
decline phase owing to the development of better technologies (in terms of
performance and/or cost). In other words technological change occurs through 'substitution'.
The process of technological advancement through substitution is shown
schematically in Fig-1. Most technologies follow an S-shaped growth
pattern. However, it has also been observed that, although 'Particular
technology eventually reaches a stage where it has limited use, new
technologies are developed to achieve further growth with respect to any particular
‘figure of merit' (i.e. index of particular requirement). For example,
if one takes the speed of passenger travel as a `figure of merit', then
Technology T1 is a propeller aircraft, T2 is the turbo prop aircraft and T3 is
the jet aircraft. Each of these, technologies normally shows an S-shaped
improvement over time. Moreover, the overall growth of these successive
technologies (representing a system of high order, characterised by a
succession of discontinuous innovations) also exhibits an S-shaped growth
pattern.
Figure-1 : S-shaped
growth of technologies
Source: Technology
for Development, UN-ESCAP,1948.
The hardware intensive technology diffusion process can be
considered to consist of five phases (Figure 2). The first is the 'incubation
phase' where many ideas are gradually reduced to one commercial product for
introduction into the market. Next, is the 'introduction phase' where
the applications of the new technology are very slow. Later when the number of
applications increase rapidly, the technology is in its "growth
phase". After sometime its growth reduces and some stability can be observed
in the ‘maturity phase'. Finally, an improved substitution makes the technology
obsolete, and hence it enters the ‘decline phase'. It may be noted however,
that time taken for these different patterns varies widely. The introduction, growth
and maturity phases of a technology are also referred to as the three major stages
of ‘Technology Life Cycle’.
Figure 2 : Phases In
the technology diffusion process
Source: Technology
for Development, UN-ESCAP
TECHNOLOGICAL TRANSFORMATION
It is recognised that it is neither possible nor desirable to
try to develop technology in every sector when one talks of building up
indigenous technology. Nevertheless, it may highly desirable that in carefully
selected areas of production there is a vertical integration with respect to
all stages of technological transformation necessary to put a product on the market,
starting from the natural resources.
A schematic presentation of the stages of technological
transformation in the production of goods is presented in Figure-3. The
presentation is simplistic and it only illustrates the basic point of
technology planning. Everything starts from nature and eventually goes to the
market. In between there are five major stages of transformation. The first
stage is called the 'collective stage' and includes such operations as
extracting, mining and farming. Stage two can be called 'refining stage'
and includes operations such as purification, preservation and metallurgy.
‘Processing' can be deemed as third stage where chemical and electrical
conversions take place. The fourth stage is the ‘manufacturing stage’
which refers to all kinds of mechanical conversions and fabrications. The last
stage is ‘packaging stage', where things are assembled and packaged for
dispatch to the markets. There are considerable variations in the technology
content added to the product at each of these five stages.
Figure-3 : Five stages of Technological Transformation in the production of goods
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