Chapter 6 examines yet another unique problem to emerging technologies – assessment of future markets. When a technology is still emerging there might not be a market for it, and potential customers may not know about it. There is uncertainty too if the technology will be successful in any market, and there is no historical data on the technology or the market to help make decisions. Chapter 6 discusses approaches, best practices, and methodologies that can be used to decipher potential market for emerging technologies.
There are three main principles that guide successful assessments of future markets.
Diffusion and adoption
Each technology follows its own unique path and timeframe to adoption. This is because the rate to adoption is heavily influenced by the perceived advantage over existing products or alternatives, the risk of buying the new technology, different barriers to adoption, and customer awareness of the product. The diffusion process is dynamic, affected by competition and prices, innovation and development of the technology, and investments in marketing and customer awareness. The number of customers who adopt the technology and product determines the diffusion speed. Understanding the five different customer groups (innovators, early adopters, early majority, and laggards) also impacts the diffusion rate. Successfully marketing the technology differently depending on the different customer segments and different customer needs will increase the rate of mainstream adoption.
Exploration and learning
Successful companies make informed decisions through learning about potential markets ahead of their competitors. By using market probing techniques and refining the product and learning from every result, they can make quicker, more informed decisions. A probe and learn, or iterative sequence will further expand knowledge of potential markets by learning from past results and allowing to integrate them into the future. A market inquiry is the beginning of a very active and dynamic process of collecting information on potential customers and needs, making decisions and applying constraints, and experimenting with beta products. In the early stages, alternatives can be evaluated, and different standards can be evaluated. Once substantial information has been gathered, it needs to be evaluated before a decision to act can be reached. Barriers to acquiring information, disseminated information, and using information have to be overcome to be successful.
Triangulation for insights
Exploring all possibilities using different research methods, using different data, and looking for a convergence of conclusions is needed when the customers and markets are still unknown. Emerging technologies, especially disruptive ones, cannot be evaluated using the standard methods used in other areas of business. There is not one method to use, but a collaboration of methods and results will yield the most informed results. Customers may have a hard time grasping the concept of a new technology, so gathering information about customer needs and usage will be more rewarding than studying customer’s reaction to a new prototype. Studying lead users can help identify needs that a new product may satisfy. Lead users understand the problem they are facing, and may have an idea of a technology or product that can fix it. They may have experimented with a solution already, they may be working with similar products already, and they can be involved with areas of the problem. They can be a great tool for understating the “pain” and helping develop a viable solution. Emerging technologies can solve problems customers do not know they have, so problem identification, story-telling, and observation of customers and markets can yield potential markets for a technology. By studying the inflections of the adoption of the technology and anticipating them, companies can gain the competitive advantage over their competitors. While there is no way to be exact, methodical guesswork, tracking leading indicators, information acceleration, and diffusion modeling can provide information on the rate of diffusion on a technology.
Emerging technologies are ambiguous and disruptive, so they require a unique approach to anticipate future markets. Intense information is needed to assess customer needs, customer problems, and possible rate of adoption of a technology. There is no single strategy that will yield results on its own, so by using a combination of tools and methods, a company can gain competitive advantage by having the best information into potential markets and anticipating critical inflection points.
Looking outside the box and focusing on the potential of the technology in different markets with different customers and needs is critical to success. Chapter 6 offered some general methods to do so, but with the ambiguous nature of emerging technologies it would still be extremely difficult to predict. I think that this is where one of the core concepts of emerging technologies comes into play – staying flexible in strategic ways. Not only does a company need to stay flexible with the initial development of a technology, but expanding into future markets and researching future needs of customers and uses of the technology would also require a flexible but strategic company.
RFID tags are an example of an emerging technology that has evolved through many different markets. Initially, they were used for inventory purposes (made popular by Walmart), and even thought to be potentially disruptive to barcode technology. Now RFID is moving away from inventory into different markets, such as human and animal tracking. State and Federal Correction departments are starting to use the technology because it automates processes and eliminates human errors. RFID tags are also being used on endangered species and other animals to help gain knowledge and better understand their behavior. RFID tags may not have been extremely successful in the early markets of inventory, but they are certainly becoming more widespread in different markets and will continue to grow into other uses.
References
http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9024960
http://www.discoverrfid.org/how-it-works/facts-and-figures.html
Sunday, March 29, 2009
Tuesday, March 3, 2009
Wharton Chapter 5
Wharton Chapter 5 discusses the government's role in emerging technologies. Despite the negative image of government restricting innovation and hindering the emerging technology process, government can play a very monumental and beneficial role, as illustrated by the development of the Internet. Wharton identifies seven general ways the government can impact an emerging technology:
Military Technology – Encourages new technologies that the government and military can benefit from.
-Research Infrastructure – Government invests in general research and encourages the findings to be shared
-Institutional Infrastructure – Government provides public and legal institutions to foster or prohibit emerging technologies
-Standard setting – Although standards are usually set by the market, the Government can step in and establish a technology standard.
-Government Regulation – This is especially influential in the medical field with the regulation by The Food and Drug Administration.
-Government Directives – the Government does not fund any technologies, but takes a direct role in influencing the commercialization efforts
-Government Subsidies – Government directly support different firms and technologies.
Wharton continues the chapter with 10 different lessons for managers regarding government interaction with emerging technologies.
-Government can help shape a new technology in the beginning – look outside the box and focus on future application of the technology
-If the Government withdraws research support, beneficiaries of the support will resist – managers can either push for continued support, or position themselves to somehow benefit from the Government withdrawal
-Government can help transition from public to private “ownership” of a technology b- transition periods are great opportunities to gain a competitive advantage
-New technologies can cause social concerns – companies must be prepared to defend their stance and technology, and political demands can turn into profit opportunities
-Disruptions caused by the technology will be met with legal and political reactions – managers must look at the broad spectrum for any possible implications caused by the new technology
-A high demand technology will create demands for government-regulated universal service – this can translate into protection from market competition
-Quality of service should be regulated by the market, but dominant firms sometimes make the mistake of providing poor customer service – managers need to recognize the importance of customer service and customer satisfaction, no matter what market position the firm is in
-The power of individual firms may need to a monopoly, in which case the government may step in and try to regulate – companies need to encourage fair competition or they might face regulation from the government
-Bottleneck markets may result in the government stepping in to address the issue of the vertical integration of conduit and content – companies must once again need to encourage fair competition across the entire market or risk facing regulation from the government
-Government regulation can have unintended side efforts and possibly even negatively impact the commercialization of the technology – companies should strive for minimal regulation, if any.
The Government has the ability to affect an emerging technology in every stage of development.
Managers and companies must be aware of the potential impact from the government, and stay proactive by operating fairly and competitively in the market. By anticipating possible regulation earlier on in the technology development, a company will be more prepared to respond quickly. Companies can benefit from the interaction of government and a technology, they just need to be prepared and proactive in the process.
GPS (Global Positioning System) is an example of a technology that was evolved from the original technology and been used in many different markets. In 1993, the U.S. Air Force launched the first network of 24 satellites, known as GPS. The GPS technology was created from a combination of engineering and scientific advances, specifically the atomic clock. The technical evolution of the atomic clock and the GPS follows the speciation patterns of emerging technologies, but the Government influence and regulation also played a huge part in the GPS product we use today.
GPS was originally designed by the Department of Defense strictly for military use. The companies that helped create the GPS technology recognized the huge potential in the commercial market, and finally the Pentagon allowed use of the technology in the commercial market. Use was allowed under a policy called “selective availability,” which meant that the military and other authorized users would be given the most accurate broadcast signals. The Pentagon also reserved the ability to interfere with any civilian signals if they so chose to.
In 1996 however, the White House decided to open up the higher level of GPS accuracy to everyone. The federal government also communicated their commitment to “providing GPS services for peaceful civil, commercial, and scientific use on a worldwide basis and free of charge.”
Now we can find some sort of GPS unit in a wide variety of devices – cell phones, wireless cards, car navigation systems, etc. One of the news articles we talked about was the Google Latitude system, which is a GPS application for your mobile phone or PC that shows your “friends” positions. This has caused concern over privacy issues, so I can't help but wonder if the government may step in again with some sort of privacy regulation or legislation?
http://www.beyonddiscovery.org/content/view.article.asp?a=458
www.google.com/latitude
Military Technology – Encourages new technologies that the government and military can benefit from.
-Research Infrastructure – Government invests in general research and encourages the findings to be shared
-Institutional Infrastructure – Government provides public and legal institutions to foster or prohibit emerging technologies
-Standard setting – Although standards are usually set by the market, the Government can step in and establish a technology standard.
-Government Regulation – This is especially influential in the medical field with the regulation by The Food and Drug Administration.
-Government Directives – the Government does not fund any technologies, but takes a direct role in influencing the commercialization efforts
-Government Subsidies – Government directly support different firms and technologies.
Wharton continues the chapter with 10 different lessons for managers regarding government interaction with emerging technologies.
-Government can help shape a new technology in the beginning – look outside the box and focus on future application of the technology
-If the Government withdraws research support, beneficiaries of the support will resist – managers can either push for continued support, or position themselves to somehow benefit from the Government withdrawal
-Government can help transition from public to private “ownership” of a technology b- transition periods are great opportunities to gain a competitive advantage
-New technologies can cause social concerns – companies must be prepared to defend their stance and technology, and political demands can turn into profit opportunities
-Disruptions caused by the technology will be met with legal and political reactions – managers must look at the broad spectrum for any possible implications caused by the new technology
-A high demand technology will create demands for government-regulated universal service – this can translate into protection from market competition
-Quality of service should be regulated by the market, but dominant firms sometimes make the mistake of providing poor customer service – managers need to recognize the importance of customer service and customer satisfaction, no matter what market position the firm is in
-The power of individual firms may need to a monopoly, in which case the government may step in and try to regulate – companies need to encourage fair competition or they might face regulation from the government
-Bottleneck markets may result in the government stepping in to address the issue of the vertical integration of conduit and content – companies must once again need to encourage fair competition across the entire market or risk facing regulation from the government
-Government regulation can have unintended side efforts and possibly even negatively impact the commercialization of the technology – companies should strive for minimal regulation, if any.
The Government has the ability to affect an emerging technology in every stage of development.
Managers and companies must be aware of the potential impact from the government, and stay proactive by operating fairly and competitively in the market. By anticipating possible regulation earlier on in the technology development, a company will be more prepared to respond quickly. Companies can benefit from the interaction of government and a technology, they just need to be prepared and proactive in the process.
GPS (Global Positioning System) is an example of a technology that was evolved from the original technology and been used in many different markets. In 1993, the U.S. Air Force launched the first network of 24 satellites, known as GPS. The GPS technology was created from a combination of engineering and scientific advances, specifically the atomic clock. The technical evolution of the atomic clock and the GPS follows the speciation patterns of emerging technologies, but the Government influence and regulation also played a huge part in the GPS product we use today.
GPS was originally designed by the Department of Defense strictly for military use. The companies that helped create the GPS technology recognized the huge potential in the commercial market, and finally the Pentagon allowed use of the technology in the commercial market. Use was allowed under a policy called “selective availability,” which meant that the military and other authorized users would be given the most accurate broadcast signals. The Pentagon also reserved the ability to interfere with any civilian signals if they so chose to.
In 1996 however, the White House decided to open up the higher level of GPS accuracy to everyone. The federal government also communicated their commitment to “providing GPS services for peaceful civil, commercial, and scientific use on a worldwide basis and free of charge.”
Now we can find some sort of GPS unit in a wide variety of devices – cell phones, wireless cards, car navigation systems, etc. One of the news articles we talked about was the Google Latitude system, which is a GPS application for your mobile phone or PC that shows your “friends” positions. This has caused concern over privacy issues, so I can't help but wonder if the government may step in again with some sort of privacy regulation or legislation?
http://www.beyonddiscovery.org/content/view.article.asp?a=458
www.google.com/latitude
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