Several weeks ago I wrote about some of the basic considerations in
evaluating technology trends. (see here and here), In those posts I discussed some of the dynamics
of technological advance and offer some initial guidance to get you started in
technology trend analysis.
One of the points I emphasized in those columns is that it is imperative
to assess the performance of technologies, not at their present level of
performance but at where they will be in the future. Similarly, when evaluating the substitution of
an incumbent technology by an emerging one, we make the case that it is less
important to compare the present performance of the two technologies than their
future potential.
To illustrate this dynamic, the figure below shows two technology
s-curves – one for an incumbent technology and the other for an emerging
technology destined to eventually replace it.
On the y-axis we plot some relevant performance measure of the technologies
in question. Note that this is not sales
or market share but rather some performance parameter of interest. For example, in computing it could be the
clock speed of a chip (as was done for the original Moore’s Law) or the storage
density of disk drives. In the energy
arena, we may track the energy conversion efficiency of solar photovoltaic
cells, the heat rate of thermal generators (either fossil or biomass), or the
efficiency of wind turbines.
Note that, in the figure, the new technology begins life at a lower
level of performance than the incumbent technology. This phenomenon, which is all too common,
often leads one to mistakenly dismiss the emerging technology as inferior to
the incumbent. But, in fact, those who
do are asking the wrong question.
Rather, it is important to look at the potential of the new technology
to surpass the performance of the incumbent which occurs at the cross over
point shown in the schematic. Equally
important is the difference in performance limits of the two technologies, for
if the difference is sufficient, the new technology will sustain its inexorable
march to overtake the incumbent.
Even if we do not have sufficient data to plot precisely where we are on
the s-curve, it is crucial to know whether the technology is just beginning its
upward trajectory or is nearing its performance limit. This is well
demonstrated in a recent Washington Post article describing a prototype US Navy laser weapon system which quotes one
naval analyst: “’Naval guns are near the
theoretical limit of their performance envelope now,’ [he] said. ‘We can only
expect very minor improvements in the future, whereas with lasers we can expect
significant improvements in range, lethality, and accuracy.’"
Laser weapon on
the USS Ponce
Were we plotting the
s-curves for naval combat systems, as the quote implies, we might employ range,
lethality, and accuracy as the performance metrics of merit. In this case, even without quantitative data
on these measures, it is apparent that this new weapons technology holds great promise
to overtake existing systems and substitute for conventional weapons technology.
