Drs. Tellis and Sood (USC and Emery University, respectively) discuss the need for management to choose and back the “right” technology to grow their business. [Please note this link is NOT their technical article, but one more easily read and digested.] Their premise is that management often fails to discern among different levels of technology (and, therefore, miss the boat); it believes in the orderly path for technology development (as opposed to random path); and, management feels that consumer taste is directed by whim (but, the authors correctly state this is untrue- consumers are motivated by existing innovation and changes).
These professors attempt to define three terms- platform, design, and component. The platform is defined as the underlying technology that employs a unique scientific principle. Design could be the various implementations (which they exemplify with size), while the components would be the various constructions possible.
The orderly path of technology innovation is easier to fathom- this theory basically assumes that a newer technology has low acceptance and/or performance, improves after some breakthrough, and then the benefits level out as the technology matures. They recommend that management back a variety (portfolio) of technologies, so that sudden improvements in one or more of them won’t leave their firms by the wayside. Their example (a good one, I might add) was the business of laser and ink-jet printers.
Finally, they aver that consumer metrics (note- consumers can be end users, other manufacturers, or users in your own company) are not random (as would be technology development), but are driven by the emergence of new platforms. One should study new technologies to see how they compare to the features of the existing ones and how the strengths or benefits of the features of these new platforms might shift consumer attitudes.
I will use the dialysis industry of the 80’s and 90’s (and, hopefully, the 10’s- assuming politics is removed from the equation) as my example.
After the passage of HR-1 in the mid-70’s, Medicare began paying for dialysis. This led to a fairly large expansion of the dialysis business (which has continued to this very day). At the time, the primary treatment was based upon the use of acetate-buffered solutions. This was not because they were better for the patient, but because the technology allowed manufacturers to produce one gallon concentrates that would supply the full treatment for the user (at the hospital or clinic, primarily). One could make his/her own dialysate, but it was time consuming- and most of the machines used to provide the treatment were based upon acetate buffers.
Since the business was growing, many manufacturers began to develop new designs. These designs (in the authors’ sense) were more efficient means of affording treatment- instead of coils, flat-plates and hollow fiber dialyzers were being developed (the device that allowed the removal of toxins from the extracorporeally treated blood)- and were becoming rapidly available. In addition, new components (again, in the authors’ sense) were being developed- more efficient membranes, ones that would allow for more rapid or more selective transport.
These improvements led to the need for a more biologically-compatible dialysate. As the efficiency of overall treatment increased, the problems with the acetate platform became more evident. (Without providing a full healthcare lesson, one should know that the buffer in your blood is NOT acetate, but bicarbonate. While the body can convert acetate slowly to the bicarbonate buffer, as treatment became more efficient, patients were temporarily losing bicarbonate and gaining acetate- which is not the desired result). As such, some physicians began their own small-scale use of bicarbonate dialysate. This necessitated new delivery machines- and the on-site and immediate production of bicarbonate dialysate (until 1982, no-one could manufacture a bicarbonate concentrate- that was what we invented…)
So, this seemed to solve a series of problems. However, all of these dialysis treatments are predicated upon the failure of another technology platform- that of transplantation. Over the ensuing years, we now are more efficient in transplanting kidneys, but patients’ long-term survival is still not adequate, drugs are required, and most importantly, our supply of kidneys is not adequate (donors are needed…). If this platform could be improved, then the need for dialysis would decrease. That would be one platform to watch…
Another platform, one which we thought would be the “bullet in the heart” of dialysis, was the cultivation of true artificial kidneys via stem cell technology. However, that platform has been blocked by both technological improvements and political interference. One would assume within the next few years, the political interferences will have diminished and perhaps those patients undergoing dialysis can look forward to a true “artificial kidney” therapy…
One should also look at the authors’ analysis by examining the energy situation. Over the past few years (and certainly since the election of President Obama), almost every one of us would expect tremendous development work to proceed in alternative energy sources (coal gasification in-situ, biodiesel, solar, etc.)- but, the fact is that the price of conventional fuel has dropped, so the immediacy is gone. Of course, the supply of that conventional fuel is not endless, so one would hope that we would, indeed, continue to exploit our manifest ideas on alternative energy. However, that is a discussion for another day…