TIM Lecture 2

Question 1

Long-term Patterns of technological change

Answer 1

• Technological change is generally cumulative and evolutionary
• Most innovations are new combinations of existing technologies or the introduction of new elements into existing systems
• Technological development is not a smooth, automatic process, it takes place in fits, spurts and jumps(e.g. electric lighting & vacuum pumps)

Question 2

Consequences of TEP

Answer 2

• Winners & losers: nations and firms
• Re-design & new configuration of the capital stock
• New skill profile in the labor force
• New pattern of industrial relations
• Competitiveness is based on:
  - knowledge, creativity and
  learning
  - innovation & R&D
• New national and international regulations

Question 3

S-Curve Description

Answer 3

Y-axis output variable (performance of technology)
X-axis input variable (aggregate R&D spending or time)
Four stages:
1. Emergence
2.Rapid improvement
3.Declining improvement (Potential of technology between this stage and Maturity)
4.Maturity (Limit of technology)

Question 4

S-Curve Benefits

Answer 4

It can help to avoid some typical problems of established companies:
– Currently used technology is over-estimated
– R&D budgets are linked to revenues
– Misinterpretation of market signals due to biased attitude
– Lack of flexibility of historically grown organizational structures and cultures

Question 5

PLC (Product Life Cycle)

Answer 5

Problems: 
- Unit of analysis 
- Applicability to services or
complex products
3 main phases:
- Fluid
- Transitional
- Specific
In Product innovations dominant design is established during the fluid phase.
In Process innovations it is established in the transitional phase.

Question 6

Breakdown of PLC phases

Answer 6

Read Slide 22

Question 7

PLC and Competition

Answer 7

Phase 1: performance entries > exits
Phase 2: differentiation entries = exits
Phase 3: price entries

Question 8

Adopter categories 1: Innovators

Answer 8

– “venturesome”
– active information seekers
– cosmopolite social relationships
– able to cope with a high degree of uncertainty

Question 9

Adopter categories 2: Early adopters

Answer 9

– often opinion leaders
– more integrated part of local social system than innovators
– sought by change agents as a “local missionary”
– Put approval stamp on new idea

Question 10

Adopter categories 3: Early majority (“deliberate”)

Answer 10

– interact frequently with their peers
– seldom hold positions of opinion leadership
– makes up about one third of all members

Question 11

Adopter categories 4: Late majority

Answer 11

– Adoption may be an economic necessity or the result of increasing peer pressures
– system norms must favor the innovation

Question 12

Adopter categories 5: Laggards

Answer 12

– very localite, near isolates in social network
– the past is point of reference
– limited resources
– tend to be suspicious of innovations and change agents