Disruptive technology roadmaps

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Abstract

Disruptive technologies create growth in the industries they penetrate or create entirely new industries through the introduction of products and services that are dramatically cheaper, better, and more convenient. These disruptive technologies often disrupt workforce participation by allowing technologically unsophisticated individuals to enter and become competitive in the industrial workforce. Disruptive technologies offer a revolutionary change in the conduct of processes or operations.

Disruptive technologies can evolve from the confluence of seemingly diverse technologies or can be a result of an entirely new technological investigation. Existing planning processes are notoriously poor in identifying the mix of sometimes highly disparate technologies required to address the multiple performance objectives of a particular niche in the market. For a number of reasons, especially the inability to look beyond short-term profitability, and the risk/return tradeoff of longer term projects, it is suggested that current strategic planning and management processes promote sustaining technologies at the expense of disruptive technologies.

We propose a systematic approach to identify disruptive technologies that is realistic and operable and takes advantage of the text mining literature. This literature-based discovery process is especially useful in identifying potential disruptive technologies that may require the input from many diverse technological and management areas. We believe that this process holds great potential for identifying projects with a higher probability of downstream success. Further, we suggest a process to take the identified potential disruptive technology from the “idea stage” through to the development of a potentially feasible product for the market. This second stage makes use of workshops and roadmapping to codify the ideas of technological and management experts, who were identified in the literature-based discovery stage. Our goal is to describe and explain the pragmatic steps suggested by our innovative and practical process.

The proposed process could identify technologies whose eventual development and application to specific problems would generate innovative products. The goal is to isolate technologies that have the potential to redefine an industry, or alternatively, have the potential to create an entirely new industrial setting. Use the text-mining component of literature-based discovery to identify both the technical disciplines that are likely candidates for disruptive technological products, and experts in these critical technical and managerial disciplines. While we know that this is but one way to investigate nascent disruptive technologies we feel it is imperative that the representatives of these potentially critical technical disciplines are included in the roadmap development process, either as implementers or as consultants.

Every firm is looking for “the next great thing”. Literature-based discovery offers a starting point for identifying at least a portion of the major contributory technical and managerial disciplines necessary for potential disruptive technologies and discontinuous innovations. Combining literature-based discovery with a practical workshop/roadmap process dramatically enhances the likelihood of success.

Introduction

Disruptive technologies can be either a new combination of existing technologies or new technologies whose application to problem areas or new commercialization challenges (e.g., systems or operations) can cause major technology product paradigm shifts or create entirely new ones [1]. Management researchers have studied the commercial potential for disruptive technologies for nearly a century. Kondratief [2] and Schumpeter [3] were among the early researchers in the field suggesting “Long waves of technological change and the process of creative destruction caused by new technologies and new skill sets either creating or redefining firms and existing markets”.

The recent interest in the field has ignited numerous differing arguments for the exact definitions of either disruptive technologies or discontinuous innovations. Disruptive technologies can be considered scientific discoveries that break through the usual product/technology capabilities and provide a basis for a new competitive paradigm. Discontinuous innovations can be considered products/processes/services that provide exponential improvements in the value received by the customer. Disruptive technologies have been referred to as earthquake, game breaking, whirlwind, typhoon, or emergent technologies. The nomenclature is not important but the phenomena are. Disruptive technologies are by their nature nascent and only can be revealed as being disruptive in hindsight. They therefore provide a major problem for a technological forecaster or roadmapper, requiring a degree of insight not required for sustaining technologies (albeit high tech) that follow the established technology product paradigm in a given industry [4]. Products based on disruptive technologies provide dramatic improvements to current product market paradigms, or produce the physical and service products that initiate new industries. These regime changes define a new product platform, which is far different from what the market would have experienced with “only” incremental innovation.

One challenge in the study of discontinuous and disruptive innovation is the lack of widely accepted definitions. Definitions of disruptive technologies focus on firm-based product technology factors [5]; industry wide product technology factors [6]; and the gap between substitutable technological learning curves on cost or performance basis [7], [8]. Definitions of discontinuous innovation focus on customer behavior [9], product newness [10], market factors [11] or some combination of these factors [12].

Disruptive technologies create major new growth in the industries they penetrate by allowing people and firms with differing skill sets to provide step function value to existing industries or create new ones from the value they provide. An examination of the successful disruptive technologies suggests that they provide exceptional value to less satisfied customers of the current technology product paradigm [9]. In the past few decades, consumers have accepted products and services that have been enabled by disruptive technologies. Many of these have been (1) smaller, (2) lighter, (3) cheaper (4) more flexible and convenient, (5) more reliable, (6) more efficient with higher unit performance (energy density, computing power, etc.), and (7) operationally simple. Disruptive technologies offer a revolutionary change in the conduct of processes or operations.

To meet multiple consumer-based performance objectives, disruptive technologies typically draw upon many diverse technologies. For example: (1) Smaller products may require advances in micro- or nanotechnologies; (2) Lighter products may require advances in materials technologies; (3) Cheaper products may require advances in component technologies and associated manufacturing processes; (4) More flexible and convenient products may require advances in human factors research, ergonomics, and artificial intelligence; (5) More reliable products may require advances in design, manufacturing and quality control processes, and probability and statistics; (6) Higher unit performance products may require advances in chemistry and physics, materials, heat transfer, design, and micro- and nanotechnology manufacturing processes; (7) Operationally simple products may require advances in artificial intelligence, robotics, and design. Existing planning processes are notoriously deficient in identifying the mix of highly disparate technologies required to address the multiple performance objectives necessary to suggest potential disruptive technologies. In fact, it is paradoxical that “disruptive planning processes” are required to replace today's “sustaining planning processes”, in order to systematically identify potentially disruptive technologies and their associated development strategies.

The common usage of disruptive technologies in the literature focuses on new, typically revolutionary, technologies. While the underlying concept of revolutionary technologies is not new [13], the potentially devastating impact of these technologies on successful industries has received attention in books and articles by Christensen et al. [14], Christensen [15], and Moore [9], and more traditional pieces by Schumpeter [3]. Further entrepreneurial authors such as Kirchhoff and Walsh [16] and many of the disruptive technology researchers cite that why successful and apparently well-managed organizations fail is that they do not recognize the distinction between sustaining technologies and disruptive technologies. Entrepreneurial firms with no established customer base can take advantage of disruptive technologies and redefine current markets whereas large firms refuse to cannibalize their own markets through the use of disruptive technologies.

Sustaining technologies are those that improve the performance of established products through the current technology product paradigm. They are often developed by successful companies for, and in close collaboration with, their most important and lucrative clients [16]. In other words, they are often the result of those successful firms following the excellent business practice of listening closely to their customers (see Ref. [17], also Ref. [16]).

In contrast to sustaining technologies, which improve the performance of established products, disruptive technologies often provide value parameters not recognized by the mainstream market and might actually provide worse product performance features on some parameters valued by the mainstream market, at least in the short run [17].

Successful companies often fail to invest aggressively in nascent disruptive technologies, to their long-term demise and dismay. Possible reasons for their demise include: first, disruptive products are simpler and cheaper; they generally promise lower, not higher, profit margins; second, disruptive technologies typically are first commercialized in emerging or insignificant markets; and third, leading firms' most profitable customers generally do not want, and indeed initially cannot use, products based on disruptive technologies [18]. By and large, the product embodiment of a disruptive technology is initially embraced by a small fraction of customers in a market. Hence, most companies with a practiced discipline of listening to their best customers and identifying new products that promise greater profitability and growth are rarely able to build a case for investing in disruptive technologies until it is too late [14], [17].

Kirchhoff, Christensen, Moore, and others make a rather convincing case that the very rational refusal by successful companies to invest in disruptive hard or soft technologies can lead to their rather sudden loss of dominance in their respective fields, if not their total disappearance. It is certainly possible to extrapolate this disruptive technology scenario to national defense, with the potential consequence of shifting national military dominance.

There are at least two main generic reasons why sustaining technologies tend to be preferred at the expense of disrupting technologies in large firms: incentives and procedures. The larger firms are driven by quarterly profitability. A technology with the potential to radically reduce the cost of a product, but whose application is years in the future, and whose cost is being borne currently, is likely to reduce current profitability, and unlikely to enhance one's upper management career. The incentive problem in both the commercial and national defense sectors is that the larger social benefits require a longer term global optimization objective function (i.e., the common good), whereas individual incentives are driven by shorter term local optimization objective functions (i.e., the individual good). In plain English, the near-term individual rewards from sustaining technologies that yield short-term low-risk payoffs displace the longer term social benefits that could result from proactive high-risk high-payoff disruptive technology selection. The procedural problem is that technology selection decisions, especially in large established commercial and government organizations, are increasingly being made by larger and more inclusive committees, a process traditionally steeped in tradition and conservatism. Revolutionary disruptive concepts are less likely (on average) to receive committee approval than evolutionary sustaining concepts.

To guard against the potentially devastating consequences caused by the introduction of disruptive technologies, whether in the commercial or national defense sector, a number of strategic steps are required. The main step required is a change in the strategic orientation at most firms. A longer range strategic perspective that is better able to evaluate and anticipate short- and long-run risks is needed to restore balance to the typically shorter range tactical reactive operational mode. The incentives necessary to affect this paradigm shift are beyond the scope of this paper. Our hope is that practical research approaches like the one advanced in this paper will facilitate the necessary change in corporate culture. Once this managerial and cultural hurdle has been overcome, then, processes can be developed to identify, plan for, and develop technologies with higher probability of having disruptive impact.

In this paper, we present processes that will facilitate the generation of potentially disruptive technologies. The key features of these processes are: (1) they insure that a wide range of alternative candidate technologies are considered for disruptive scenarios; (2) they identify many of the technical and managerial disciplines required to develop the highest priority alternative candidate technologies, and incorporate them in the development plan for the alternative technologies selected; (3) they use tandem literature-, workshop-, and roadmap-based approaches to exploit the strengths of each and eliminate the weaknesses of each. In the remainder of this paper, a literature/workshop/roadmap-based approach to systematically identify, plan for, and develop potentially disruptive technologies is advanced.

Section snippets

Objectives

This paper aims to develop a process that will facilitate the identification of potentially disruptive technologies, and to provide a systematic approach for developing and implementing such technologies.

General

There are two broad perspectives in the generation of a nascent disruptive technology. The first is a market-based approach where firms perceive a need in the market and then generate the technologies necessary to meet the need. This top-down mode starts from a modified operational scenario, and then generates the requirements for a technology that will result in disrupted operations. Another possible starting point is to evaluate the firm's technological strengths and then look for a market

Conclusions

This paper has served to provide means to identify a full range of candidate disruptive technology alternatives, as well as to identify the appropriate subtechnologies necessary for successful development of each candidate technology alternative, using systematic methods that survey all related technological and managerial information that are required. Literature-based discovery offers a starting point for identifying the major contributory technical and managerial disciplines. Coupling

Ronald N. Kostoff received a Ph.D. in Aerospace and Mechanical Sciences from Princeton University in 1967. He has performed aerospace research for Bell Laboratories, managed energy programs and organizations for US DOE, managed technical assessment for ONR, and conducted text-mining studies for the past decade. He edited three special journal issues, and has authored over 100 technical papers.

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    Ronald N. Kostoff received a Ph.D. in Aerospace and Mechanical Sciences from Princeton University in 1967. He has performed aerospace research for Bell Laboratories, managed energy programs and organizations for US DOE, managed technical assessment for ONR, and conducted text-mining studies for the past decade. He edited three special journal issues, and has authored over 100 technical papers.

    Dr. Robert Boylan started his career at Peat Marwick where he specialized in tax planning. He completed his Ph.D. at Duke University in 1990. He spent 15 years as a professor at Rensselaer Polytechnic Institute and is currently a visiting professor at the University of North Florida. He is actively consulting in many areas including corporate and personal financial strategy and technological innovation. His research interests mirror his consulting interests and include management and technology, financial strategy and value creation.

    Dr. Gene Simons has been associated with Rensselaer for 37 years where he chaired the Industrial and Management Engineering Program, developed the Graduate Programs in Manufacturing Systems Engineering, and founded the Northeast Manufacturing Technology Center. He is currently the Associate Dean for Special Graduate Programs in the Lally School of Management and Technology where he is responsible for executive and distance education. His honors include the CASA/SME LEAD Award in 1987 for the Outstanding Manufacturing Engineering Program (worldwide) and being elected FELLOW of the Institute of Industrial Engineers in 1992. He has published numerous articles on various topics in Management and Technology. He also has developed national training programs for industrial extension agents and directors under a grant from the National Technology Transfer Center.

    The views in this paper are solely the authors', and do not represent the views of the Department of the Navy, or any of its components, the University of North Florida, or Rensselaer Polytechnic Institute.

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