The Innovation Strategy Map

There’s no doubt that technology and innovation go hand in hand. That’s why it’s important to understand the strategy behind the evolution of innovation. As a budding entrepreneur, you’ll want to gain strategies and tools for staying ahead of the curve.

Discover how technology and innovation evolve over time with Victor Seidel, Guest Expert on the Oxford Strategic Innovation Programme from Saïd Business School, University of Oxford.

Transcript

So let’s consider how technologies evolve over time. We’ve already considered how new industries or new markets evolve. And we’re all sort of familiar about the idea of maybe an S-curve of how a market develops over time. Slowly at first, then it takes off. Then maybe the market peters out. But underlying an industry or market S-curve are underlying technology S-curves. And it’s important, in our innovation toolkit, to really think about how these technologies evolve, because the evolution of these technologies and their performance is what creates value that, in the end, creates a new market or industry. There’s a large body of research about how technologies evolve over time.

How technologies evolve over time

Typically, there’s an early stage, called the era of ferment, when different technologies are vying to be the next big thing. One of those technologies wins out, becomes the dominant design. When a dominant design is established, that allows for takeoff. A lot of new innovations can build off of that dominant design. And so we have an era of incremental change. 

Then over time, there’s some exhaustion to that type of technology, a performance limit as it were, and the opportunity for a discontinuity until the next technology S-curve takes off.

The evolution of S-curves

We can think about this and the example in the auto industry. So, in the early days, there was a lot of different ferment about what a car looked like. Then the dominant design, run a petrol engine car, a lot of improvements over time, and then eventually, a tailing off. So we can think about petrol engines or gas engines that have been the dominant design. And we can think about, now the introduction of a discontinuity, a whole new architecture by which we think about vehicles in terms of electric vehicle platforms. And this is defining a new S-curve. One thing that’s important to think about is what is the nature of performance on an S-curve?

So for a car, we can think about a lot of different dimensions, even for the engine. We can think about fuel efficiency. So over time we had an S-curve of that petrol or gas engine that tails out, and fuel efficiency, the next S-curve on electric vehicles, probably starts quite a bit higher. But we can also think about: there’s another S-curve that might be about the range. In the petrol engine we had pretty good range. But early electric vehicles, very short range. And so we can think about how there are a number of different S-curves that are at play in the evolution of any new technology. And the way in which different firms sort of work their way up the S-curve is the way in which certain firms can dominate in a certain market.

The competitive landscape

So now that we have that S-curve in mind, we can sort of think about how that has implications for the nature of competitive advantage. Some firms are really good at working up a certain S-curve in that area of incremental, or what’s sometimes also called routine innovation. So we can think about dominant players in the auto industry, for example, really good at extracting the next bit of value and performance over that incumbent technology.

We can think about some new entrance in electric vehicle technology, for example, or we can think about how in the music industry moving from magnetic recording technology to digital technology involved a whole new set of technologies, expertise, skills, types of engineers that weren’t valued by the old incumbent technology.

The nature of strategy in innovation

So, in general, we can think the nature of strategy in innovation is often a battle between S-curves. People are working up existing S-curves and those new entrants, they’re trying to find a new discontinuous innovation, the next S-curve, often called a radical innovation.