When creating a new technology initiative, it is not only the technology that is important, but also the underlying ecosystem that driving the technology that fundamentally determines its success. Ecosystem factors determine the rate of acceptance for a new technology, and when a new technology is competitive against an older entrenched tech, the new technology’s acceptance rate will be hindered. How do you determine at what rate your tech will be accepted? How do you determine if it is the right time to deliver your tech to the world?
The article, “Right Tech, Wrong Time” by Professors Ron Adner and Rahul Kapoor, explores the different ecosystem factors that contribute to acceptance rates. One factor is whether a technology initiative installment base is dependent on other technology factors. They call this “overcoming ecosystem challenges.” “Right Tech” uses the example of HDTVs. The technology had been in existence since the early 80’s, but was unable to be accepted until broadcasting technologies were able to catch up. Whether an existing competitive technology has innovation ecosystem potential is a contributing factor to tech acceptance rates. Adner and Kapoor’s example is of the barcode. Though a new, more advanced technology existed, the barcode is still the dominant tech as its capabilities have expanded, moving from instantaneous price points at the register to accumulating aggregate sales for business strategies.
The two professors divide the potential acceptance rates into 4 categories, or quadrants as they present their data in graph form. The first is Creative Destruction, where the incumbent technology has low ecosystem extension and the challenge of creating a new acceptance ecosystem is low. In this category, acceptance rates of a new technology initiative are at their highest. Robust Resilience is when the two factors of creative destruction are reversed. This is by far the hardest ecosystem for a new technology to grow, and will have the lowest acceptance rate. Robust Coexistence is when the new technology’s ecosystem challenge is low and the old technology’s ecosystem has opportunities to innovate. In this situation the two technologies are both growing at the same rate. However, the old tech will eventually be replaced by the new. The final category is the Illusion of Resilience. This category is when the old tech has very little life left in it but the new tech is still waiting for the infrastructure to succeed. In this position, the new tech will rapidly dominate the old tech as soon as the infrastructure is in place.
To examine what category your tech falls into, the professors present six different questions to help analyze your tech’s acceptance rates:
-What is the execution risk–the level of difficulty in delivering the focal innovation to the market on time and to spec?
-What is the co-innovation risk–the extent to which the success of the new technology depends on the successful commercialization of other innovations?
-What is the adoption-chain risk– the extent to which other partners need to adopt and adapt to the new technology before end consumers can fully assess its value proposition?
-Can the competitiveness of the old technology be extended by further improvements to the technology itself?
-Can it be extended by improvements to complementary elements in its ecosystem?
-Can it be extended by borrowing from innovations in the new technology and its ecosystem?
If the analysis of your tech ecosystem, though these questions, has more positive factors than negative, then it may be the right time to market your technology. However, if after answering your questions there are more negative factors from the robust ecosystem of the old technology then it would be financially prudent to slow the progress of your tech, before expenses become too burdensome.