Understanding the political and legal environment that will impact a new technology is a vitally important part of assessing the potential value that a technology may have for your company. Through a review of the internet from the early days, through today, and into the future (at least as of the time of the writing of the book), the authors analyze the impact that governments can have on the development of an emerging technology. Ten lessons are presented that provide management insight into the potentials for this impact to occur.
One of the most common forms of government intervention is the creation of laws, regulations, and standards. These interventions are common and occur across a large number of industries, for example the FDA’s regulation of drug development and the FCC’s regulation of communication frequencies. These laws and regulations can offer significant advantages and disadvantages to companies. The FDA makes it very difficult to get new drugs approved, resulting in a major emphasis of pharmaceutical companies research on FDA approval. Likewise the FCC can provide tremendous advantages to companies that are able to create mini-monopolies by getting exclusive access to ranges of frequencies for their use (though at great cost to the company to purchase this range). While standards of often developed in the market governments can take an active role in encouraging or even developing the standards. Another major impact that governments can have on the development of emerging technologies is the funding of research and development of new technologies, either through educational support, defense research contracts, or other forms of grants and financial support. Certainly companies that are able to take advantage of these contracts and funds, have a major advantage over companies that don’t have this support; in fact in some industries companies live and die by the government contracts that do or don’t get. Governments can also greatly impact the growth of emerging technologies through direct support of companies and industries. Perhaps more now than at any other time in our nation’s history the government is taking a very active role in the support of companies. This brings forth the question of how will this new development affect the way business must assess technologies. With the new administrations push for alternative fuels, now may be an ideal time to get into the energy production business with a concept built around solar, wind, biofuels, or some other form of alternative fuel. There are a number of considerations that one must keep in mind while reviewing a new technology, and while it is often easy to overlook the impact that government may have, that would be a tremendous mistake, perhaps more so now than ever.
Wednesday, March 4, 2009
Wednesday, February 25, 2009
Wharton Chapter 3
Technology Speciation and the Path of Emerging Technologies
To compare technology’s progression with biological evolution seems like it should be a far-stretched analogy; however, the authors correlate that the same types of environmental adaptations that spur the speciation of animals can also be responsible for developing technologies. To explain their analogy, the authors point out that, like the biologists’ theory of “punctuated equilibrium” where there are bursts of evolutionary changes in animals that deviate from the gradual progression due to specific events such as the formation of geographical barriers separating populations, technology has, likewise, had bursts of new technologies that were stimulated by adapting a previous technology to a new environment with different resources and thus created a new technology. Through the many examples of wireless communication, the internet, radial tires, CAT scanning, automobiles, et cetera, the authors depict and define patterns of technological speciation.
While the analysis of how technologies have emerged is interesting, it is only relevant if we, as current and future businessmen, can apply--and manage—the strategic implications of this knowledge. To actively seek out and direct the stimuli needed to further technological improvements, rather than just allow them to happen gradually, is a purpose we should engage and aspire to. As further motivation, the authors give well-supported advice on selecting market contexts for products, understanding market diversity, and following the lead users of technology to exploit market opportunities and encourage the acceleration of evolution. I feel this information encourages us to look at the possibilities in our very own spheres of influence, rather than wait for a technology to develop in a lab somewhere.
To compare technology’s progression with biological evolution seems like it should be a far-stretched analogy; however, the authors correlate that the same types of environmental adaptations that spur the speciation of animals can also be responsible for developing technologies. To explain their analogy, the authors point out that, like the biologists’ theory of “punctuated equilibrium” where there are bursts of evolutionary changes in animals that deviate from the gradual progression due to specific events such as the formation of geographical barriers separating populations, technology has, likewise, had bursts of new technologies that were stimulated by adapting a previous technology to a new environment with different resources and thus created a new technology. Through the many examples of wireless communication, the internet, radial tires, CAT scanning, automobiles, et cetera, the authors depict and define patterns of technological speciation.
While the analysis of how technologies have emerged is interesting, it is only relevant if we, as current and future businessmen, can apply--and manage—the strategic implications of this knowledge. To actively seek out and direct the stimuli needed to further technological improvements, rather than just allow them to happen gradually, is a purpose we should engage and aspire to. As further motivation, the authors give well-supported advice on selecting market contexts for products, understanding market diversity, and following the lead users of technology to exploit market opportunities and encourage the acceleration of evolution. I feel this information encourages us to look at the possibilities in our very own spheres of influence, rather than wait for a technology to develop in a lab somewhere.
Wednesday, February 11, 2009
Wharton on Emerging Technologies - Preface & Chapter 1
Reading Summary
“Snow melts first at the edge.” This quote, to me, sums up the key thought that was put forward in the preface and first chapter of Wharton on Emerging Technology. In order to be able to reach the mass market the manager that is working with emerging technologies must focus not on the mass market that they intend to reach, but on the users that will be the first wave of customers. These are the early adopters and those with needs that are strictly not being met with current technologies. A manager, by focusing on these customers, can learn a great deal about what is needed to push a new technology into the mass market. As was demonstrated in the PDA example the failure of the first PDA by Palm was not a problem for the company, in fact as a manager of an emerging technology one must expect to fail at times. The paradox of these technologies is that one must be a pioneer to succeed, but pioneers often fail. As Palm did the key is to minimize potential loss, and learn from that failure to ensure future success. While Palm succeeded others failed to do this, Apple’s foray into PDAs cost hundreds of millions and got them nowhere, because they approached the mass market first offering the product they believed everyone wanted, and fell right on their face.
Research Update
To delve a little deeper into the ideas and concepts that are presented in this book I have decided to take a little different route than most of you. I have a copy of The Innovators Dilemma that I picked up a few years ago and never got around to reading. I have begun to delve a little into that book as I feel that it may provide additional insight and a little different perspective on some of the topics. I know that Clayton Christenson is a well respected author on the topic of innovation. His specific focus is the idea of disruptive technologies. Which he explains are those that don’t follow the standard trend of the market, but look to meeting the needs of different users or meeting different needs for existing users. One of the major examples that Christenson gives is in the hard drive industry where traditionally the trend is for larger capacities, but disruptive technologies have come in the way of making smaller drives with lower capacities to target different customers. As I was reading Fast Company this week their list of the “Top 50 Most Innovative Companies” included Intel. While this is not a surprise, the product that they focused on most was their Atom processor. This is a great present day example of a disruptive technology. In an industry where faster and more powerful is the trend the Atom processer reduces speed and focuses on smaller, cooler, and lower power consumption. This appears to be a great opportunity for Intel as it puts them at the leading edge of a new or emerging market with netbooks and powerful mobile devices.
Analysis
As I read chapter one of Wharton on Emerging Technologies, I was torn between two competing feelings. The insight that this book provides was hinted at with the examples of the PDA market and Biotechnology; however, each time the book began to approach true insight it stepped back and said…”in chapter x we’ll discuss.” Frankly I hate preview chapters. It’s like a carrot on a stick hanging just out of reach; and it makes me want to just stop chasing. In fact after reading the preface I was more excited about the book than I was after chapter one. I expect that this will be a great book that provides a great deal of insight and some good ideas, so I’m quite glad that I will be forced to soldier on despite this frustrating start. I’m not certain that I would if I was reading this on my own as opposed to for a class.
Resources:
The Innovator’s Dilemma – Clayton Christenson
Fast Company – March 2009
“Snow melts first at the edge.” This quote, to me, sums up the key thought that was put forward in the preface and first chapter of Wharton on Emerging Technology. In order to be able to reach the mass market the manager that is working with emerging technologies must focus not on the mass market that they intend to reach, but on the users that will be the first wave of customers. These are the early adopters and those with needs that are strictly not being met with current technologies. A manager, by focusing on these customers, can learn a great deal about what is needed to push a new technology into the mass market. As was demonstrated in the PDA example the failure of the first PDA by Palm was not a problem for the company, in fact as a manager of an emerging technology one must expect to fail at times. The paradox of these technologies is that one must be a pioneer to succeed, but pioneers often fail. As Palm did the key is to minimize potential loss, and learn from that failure to ensure future success. While Palm succeeded others failed to do this, Apple’s foray into PDAs cost hundreds of millions and got them nowhere, because they approached the mass market first offering the product they believed everyone wanted, and fell right on their face.
Research Update
To delve a little deeper into the ideas and concepts that are presented in this book I have decided to take a little different route than most of you. I have a copy of The Innovators Dilemma that I picked up a few years ago and never got around to reading. I have begun to delve a little into that book as I feel that it may provide additional insight and a little different perspective on some of the topics. I know that Clayton Christenson is a well respected author on the topic of innovation. His specific focus is the idea of disruptive technologies. Which he explains are those that don’t follow the standard trend of the market, but look to meeting the needs of different users or meeting different needs for existing users. One of the major examples that Christenson gives is in the hard drive industry where traditionally the trend is for larger capacities, but disruptive technologies have come in the way of making smaller drives with lower capacities to target different customers. As I was reading Fast Company this week their list of the “Top 50 Most Innovative Companies” included Intel. While this is not a surprise, the product that they focused on most was their Atom processor. This is a great present day example of a disruptive technology. In an industry where faster and more powerful is the trend the Atom processer reduces speed and focuses on smaller, cooler, and lower power consumption. This appears to be a great opportunity for Intel as it puts them at the leading edge of a new or emerging market with netbooks and powerful mobile devices.
Analysis
As I read chapter one of Wharton on Emerging Technologies, I was torn between two competing feelings. The insight that this book provides was hinted at with the examples of the PDA market and Biotechnology; however, each time the book began to approach true insight it stepped back and said…”in chapter x we’ll discuss.” Frankly I hate preview chapters. It’s like a carrot on a stick hanging just out of reach; and it makes me want to just stop chasing. In fact after reading the preface I was more excited about the book than I was after chapter one. I expect that this will be a great book that provides a great deal of insight and some good ideas, so I’m quite glad that I will be forced to soldier on despite this frustrating start. I’m not certain that I would if I was reading this on my own as opposed to for a class.
Resources:
The Innovator’s Dilemma – Clayton Christenson
Fast Company – March 2009
Thursday, January 22, 2009
What do you mean "mad"?
After studying Psychology for four years it has come to my attention that all of us are at least slightly mad (read insane). So why would I think any differently about myself...well okay I suppose the truth of the matter is that I'm the only sane person in this insane world...but doesn't that really just make me even more insane than the rest of you. Oh well we'll see in the end.
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