Chapter 3 & 4

Chapter 3: Technology Speciation and the path of Emerging Technologies

Chapter 3 of Wharton on Emerging technologies starts with the example of internet which is result of change in domain of application of technology rather than the result of technology revolution. Authors named the shift in domain of applications and evolution of emerging technologies as ‘Technology Speciation’. By taking the insights from the evolutionary biology, authors say that the emerging technologies may emerge from:
1. Lineage Development: It is implementing a small technology developed in one domain into a new or different domain. And speciation process requires adapting to the needs of the new areas it is exploiting and also making use of the rich sources available in the new environment.
2. Gradual Evolution and Creative Destruction: Initial growth of emerging technologies may be slow but it ultimately replaces the existing technologies. This process was discussed by giving the example of wireless telephones and wired communication.
3. Melding of Technologies Lineages: New technologies may emerge from the convergence (where one technology is brought into the domain of another technology) or fusion (two technologies of different domain are applied to a new domain) of the existing technologies. (CAT scanner a combination of X-ray technology and the computing technology is an example of process of convergence and fiber-optic communication is an example given for fusion of technologies).
Authors suggest that managers can use technology speciation to their advantage- by focusing on the potential of a new technologies and their application in the market, creating a market for the new technology rather developing a new technology for the existing market, understanding the needs and requirement of the different consumers , sources of feedback, looking for opportunities for convergence or fusion technologies, studying emerging technologies in the smaller market before leaping into the bigger market. A new technology undergoes many changes and involves technological development and domain changes, managers need to understand this process and make better use of it.


Chapter 4: Identification and assessment of emerging technologies

Evaluation and assessment of technology is required for any firm to survive in the long run. Chapters 4 of Wharton on Emerging technologies discuss how technologies can be identified and assessed. In order to have long-term competitive advantage, early detection of emerging technologies is very important for the firms. Because changes in the emerging technologies are so rapid firms need to be dynamic in their approach when assessing emerging technologies. Authors suggest that managers should follow four interrelated steps -scoping, searching, evaluating and committing in their assessment of emerging technologies.
Scope: Scope for technology assessment is broad, so firms should limit their scope to new markets and new technologies, which includes customer definition, the cost of R & D, technical expertise etc. As the emerging technologies are ambiguous and ever changing, firms should be flexible in their evaluation process. Sometimes new technologies require firms to expand their scope, for example pharmaceutical industries need to change their scope as when there are changes in their related field such as biotechnology.
Searching: Once the scope is defined firms should look for the sources to tap the new technology. Sources can be found within the firms (many of the new technologies discovered by companies such as IBM, DuPont etc came from within their own organizations), public licensors such as universities, government and research institutes and from technical and trade literatures. Manager’s focus toward emerging technologies should be broad, they should be aware of the strong signals and weak signals that surround the emerging technologies. Examples for strong signals are patents and literary citations and competitors actions that are where, when and how competitive firms are investing in the market.
Evaluating: After scope is defined and the potential emerging technologies is recognized, it is important to evaluate technologies based on the financial and organizational criteria. As the emerging technologies are surrounded by ambiguity, risk and uncertainties, an effective evaluation plan is required to reduce at least some of the uncertainties and risks involved. Authors suggest that assessing a technology should be with respect to the firm’s environment such as technical capabilities of the firm, firm’s existing market etc. Risk evaluation is one of the important aspects in emerging technologies. Firms’ should consider assessing risk based on market, technology and organization.
Committing: After evaluation, firms should commit to the emerging technologies. There are four general commitment strategies suggest in the chapter.
Wait and watch: Though this kind of approach to emerging technologies is suggested as a one of the pitfalls of emerging technologies in chapter 2, authors suggest that sometimes it is an advisable strategy when it comes to a fast follower firm.
Position and learn: Smithkline Beecham uses its venture capital fund, as a positioning and learning approach. This kind of approach not only helps companies to identify new technologies but also excludes any kind of competitive threats.
Sense and follow: Once the firm identifies and assesses the technology, it follows the technology with active commercialization strategy.
Believe and lead: Though there are many risks involved with the emerging technologies, authors suggest that if a company believes in a technology, then it should fully commit all the resources towards the new technology and lead the technology.

A bit of research on ARCO from chapter 3.It was mentioned in the book that ARCO’s failure in solar energy power was due to their unpreparedness to the market. They entered the solar power market during the energy crisis of the late 1970’s and manufacturing their own photovoltaic arrays. ARCO was the first to build a 1 megawatt pilot operation, the Lugo plant in Hesperia, CA, which is now closed. The Carrizo Solar Corporation, NM bought the facility from ARCO in 1990. In 2000, ARCO was acquired by BP a UK based oil company and is officially known as BP West Coast Products LLC

Reference: http://www.eugeneleafty.com/SolarPower.asp
http://en.wikipedia.org/wiki/ARCO