illustrate the linear presentation of the technology process

Primer: Technology Innovation Processes

Technology innovation is often described as a linear process that starts with basic scientific research, proceeds through applied research, then development followed by demonstration and deployment as commercial products and processes. While this depiction is convenient, the reality is usually much more complex and iterative, with interplay among scientists, engineers, design professionals, marketing experts, users and customers, providers of complementary products and services, and others.

While many important energy technology advances have emerged from scientific research, others have arisen from customer and user insights, shop-floor experimentation, and other sources. Policies and regulations can also propel, impede, or channel technology development. Scientific and technical capabilities (technology push) and signals from the marketplace (market pull) represent the dual drivers of technology innovation, with both elements typically needing to be present.

Linkages and Success Drivers in Technology Innovation

The following points, drawn from a U.S. congressional report on innovation and commercialization, summarize major findings concerning the innovation process and system. [1]

Linkages Between Science, Technology, and Innovation

• The linear model of innovation —which implies that innovation proceeds sequentially from new scientific discoveries to new products, processes, and services—is limited in its descriptive and predictive powers. Innovation can assume many forms, including incremental improvements to existing products, applications of existing technology to new markets, and uses of new technology to serve an existing market. Though typically less revolutionary, these other forms of innovation are equally important to the U.S. economy and national well-being in terms of the performance improvements and cost reductions they produce.
• Science plays a critical role in innovation, but is not necessarily the driver of new products, processes, and services. New ideas for innovation can stem from many sources, including new manufacturing capabilities and recognition of new market needs, as well as scientific and technological discoveries. Innovation and commercialization require considerable feedback between science, engineering, product development, manufacturing, and marketing.
• The nature of innovation changes over time as product lines and industries mature. Whereas the early stages of an industry are characterized by radical innovations that create wholly new products, processes, or services and are often based on new science or technology, later stages are characterized by incremental innovation, which builds upon existing products, processes, and services and derives more from advances in manufacturing capability, product design, and component technologies.
• Successful commercialization is not simply a matter of developing technology first or getting to market first. While being first can bestow advantages on an innovating firm, firms must create and maintain a competitive advantage in the marketplace by staking out and protecting a proprietary position through patents, trade secrets, or market barriers, and by securing the complementary assets and skills needed to ensure proper manufacturing, marketing, and support.

Elements of Innovation Systems

• Successful commercialization requires an environment conducive to innovation and requisite industrial infrastructure. Institutional arrangements are needed to establish standards, regulations, and rules governing areas such as intellectual property and antitrust. Human, financial, and scientific resources are required as the basic inputs to the innovation process. Complementary assets—both related technologies and necessary skills in manufacturing and distribution—are often needed to ensure that companies can succeed in the marketplace. Potential customers frequently need additional assurances and warranties that new products, processes, and services will work as advertised. Policymakers cannot assume that investments in the science base alone will ensure economic success.
• Government and industry both play a role in establishing the environment and infrastructure necessary to support innovation and commercialization. Government influences innovation and commercialization through tax and financial policies and through the patent system. Furthermore, in fulfilling its public missions, government affects technology development and market acceptance through procurement, regulations to protect human health and the environment, development of technologies, and funding of basic research. The unintentional effects of government actions on the innovation and commercialization process must be understood in order to maintain a healthy economy.

Commercialization and the Valleys of Death

As a technology advances from an early idea through proof-of-concept, then on to a commercial product or process deployed at scale, there is a progression of activities typically requiring growing scales of investment. Sometimes a large corporation or major government initiative can support technology development throughout all these stages, but typically a varying cast of investors and supporting entities channel technologies from early research through development and demonstration and then into commercial production.

Figure 1 provides a schematic illustration of stages of the commercialization process, key players, and the three “Valleys of Death” that technology developers may encounter and would need to bridge to achieve success.

Figure 1. Handoffs in commercialization create the well-known Valleys of Death

For entrepreneurial start-ups, angel and venture capital (VC) investors can help move a technology from the laboratory to an early commercial prototype to bridge the first Valley of Death. VC investors can also fund further development to cross the second Valley of Death that stands prior to initial deployment as a commercial-scale demonstration. However, before investing at that stage, VC investors need to perceive an exit path to cash out of a technology by handing it off to private equity, public markets, or an incumbent industry buyer that can take the technology to a commercially deployable scale.

Figure 2 illustrates various private and public sector institutions and activities that can help sustain a promising technology through the commercialization process and bridge the Valleys of Death.

Figure 2. Piecemeal interventions can address individual Valleys of Death

State and federal government can, at times, provide support through funding channels, technical and business assistance, and incubator services. State Energy Offices can play important roles to support clean energy technology innovation and commercialization in their states, ranging from helping develop Governor-led innovation initiatives and policies and coordinating state agencies and resources to administering innovation-supportive policies and programs. 

Characteristics of Innovation in Different Phases of Industrial Development

The focus and characteristics of innovation tend to vary with the maturity of a product or technology. (See Table 1.) During the early stages of a major technology, there are often significantly different approaches that compete on functional performance. Historic examples include early automobiles where steam, electric and gasoline powered models competed, and early personal computing, where companies offered products with differing, incompatible architectures and operating systems. Typically, as the technology enters the growth phase, industry will settle on a smaller number of standard types with competition becoming more sensitive to cost and, often, profit margins decreasing. Businesses will seek to improve and differentiate their products through new features, components, and services while trying to lower production costs. As a product becomes commodity-like, cost reduction, which can include energy-related savings, becomes the competitive focus along with some enhancements in quality.

However, at times the trajectory of a product or technology may also be disrupted by fundamental product and production changes (for example, LED versus incandescent and fluorescent lamps) or by enabling new and greater functions and services (for instance, mobile phones disrupting landline telephony while also enabling many other computing and communication services).

Both incremental and fundamental innovations are critical to advancing economic development and productivity; improving the quality, affordability, and range of products and services; and supporting energy and environmental performance objectives.

Table 1. Characteristics of Innovation in Different Phases of Industrial Development

In the energy sector, innovations can take many forms, affecting products, processes, and services. New technologies can serve new functions or better perform existing functions. Existing technologies can be applied innovatively to meet new needs.

While eyes and investor dollars are often drawn to major new emerging technological opportunities (e.g., improved photovoltaics, next generation nuclear reactors, carbon capture chemical processes, advanced energy storage, smart buildings and energy controls), many innovations provide incremental improvements in cost, performance, and quality of existing products and services that collectively deliver great advances and benefits. All of these, emerging from entrepreneurial start-ups hatched in university labs, corporate R&D, National Laboratories, shop-floor tweaks, customer insights, and elsewhere, are vital to advancing clean energy technologies.

Author/Contact: Rodney Sobin, Senior Fellow, NASEO ( [email protected])

----------------------- [ 1 ] U.S. Congress, Office of Technology Assessment, Innovation and Commercialization of Emerging Technologies , OTA-BP-ITC-165 (Washington, DC: U.S. Government Printing Office, September 1995).

The technological innovation process and its 8 steps

The technological innovation process consists of a series of phases necessary to implement improvements or develop a new production process, product or service.

There are two ideas about the origin of technological innovations. One argues that the technological push comes from the scientific research and development sectors, with no commercial purpose and the other (Market Pull), more accepted today, affirms that it’s market needs that instigate companies to develop new technologies that satisfy the demands of consumers and businesses.

In this post, we’ll analyze the technological innovation process focused on meeting market needs and how it applies in companies.

Also see: How many stages do you use in process innovation?

The 8 stages of the technological innovation process

1- basic research.

Basic research is that phase of the technological innovation process that only occurs in large companies, usually in the pharmaceutical, energy and information technology sectors, which keeps research and development departments continuously abreast of the state of the art technologies that most impact their organizations.

2- Applied research

When it detects some specific market needs that may represent an opportunity to develop a sustainable competitive advantage for the business, the company searches among the technologies that dominate the way to solve this problem.

At this point, you can integrate existing technologies creatively and innovatively or really develop something totally new.

3- Development

When reaching a solution to the market need, it’s time to develop the product, service or process that will be marketed or employed.

For this, a prototype is developed that must be tested, preferably with the help of the public that will use it.

Two interesting approaches to this stage of the technological innovation process can be used:

• Design thinking , which takes into account how people interact with innovative products and services
• Scrum , which promotes small iterations, incremental advances in the prototype and the rest of the innovation process, always based on the needs of those who will use it.

Know more: One of the authors of the manifesto criticizes Agile and Scrum methodologies

4- Engineering

With the prototype set, you have to turn it into a scalable product or service that can be mass-produced or meet the specific needs of an industry.

Materials, suppliers, appropriate forms of storage and transportation are searched, such as connecting parts and benefiting inputs, defining which professionals will need to be hired and trained, among other measures.

5- Manufacture

This is one of the most important aspects of the technological innovation process.

It is time to define the best way to deliver the solution created to the final customer, with efficiency and quality.

Start this by modeling the process , using, preferably, BPMN automation software .

Also read: 7 business process modeling tips for lay-people

6- Marketing

With the product or service ready to be released, it’s time to do concept tests, market research and market testing to see if any adjustments are still required depending on how their acceptance and distribution is taking place in test markets.

7- Promotion

Once the market tests are done, the product or service is launched nationally or globally, depending on the markets the company serves.

This stage of the technological innovation process can use agile mar k eting , which employs Scrum and Kanban methodologies to launch the products and services rapidly to achieve results as soon as possible.

8- Continuous improvement

Once launched, both the product or service and the process flows used to produce and deliver them to end customers are constantly measured and analyzed, with the aim of looking for ways to improve them even more, adding even more perceived value to the final customers.

Also, check out from our blog: Can continuous business improvement work without automation?

With HEFLO , free BPMN 2.0 modeling cloud-based software , you can model and analyze your processes with much more agility and assertiveness, always seeking to innovate.

3 Comments . Leave new

Very Helpful Article on technological innovation process

Thanks Rahul

New conformities arise hence the need for more innovations especially in technology

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Technological Progresses and the Production Functions (With Diagram)

As knowledge of new and more efficient methods of production become available, technology changes.

Furthermore new inventions may result in the increase of the efficiency of all methods of production. At the same time some techniques may become inefficient and drop out from the production function.

These changes in technology constitute technological progress.

Graphically the effect of innovation in processes is shown with an upward shift of the production function (figure 3.27), or a downward movement of the production isoquant (figure 3.28). This shift shows that the same output may be produced by less factor inputs, or more output may be obtained with the same inputs.

Capital-deepening technical progress:

Technical progress is capital-deepening (or capital-using) if, along a line on which the K/L ratio is constant, the MRS L K increases. This implies that technical progress increases the marginal product of capital by more than the marginal product of labour. The ratio of marginal products (which is the MRS L K ) decreases in absolute value; but taking into account that the slope of the isoquant is negative, this sort of technical progress increases the MRS L K . The slope of the shifting isoquant becomes less steep along any given radius. The capital-deepening technical progress is shown in figure 3.29.

Labour-deepening technical progress:

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Technical progress is labour-deepening if, along a radius through the origin (with constant K/L ratio), the MRS L, K increases. This implies that the technical progress increases the MP L faster than the MP K . Thus the MRS L ,K , being the ratio of the marginal products [(∂X/∂L)]/[(∂X/∂K)], increases in absolute value (but decreases if the minus sign is taken into account). The downwards-shifting isoquant becomes steeper along any given radius through the origin. This is shown in figure 3.30.

Neutral-technical progress:

Technical progress is neutral if it increases the marginal product of both factors by the same percentage, so that the MRS L K (along any radius) remains constant. The isoquant shifts downwards parallel to itself. This is shown in figure 3.31.

Related Articles:

• Technical Changes in Agriculture (With Diagram)
• Elasticity of Input Substitution, Technological Progress and Income Distribution
• Long-Run Production Function (With Diagram)
• Ridge Lines (With Diagram) | Production Function | Economics

The Process of Technological Innovation

Cite this chapter.

• Nicholas S. Vonortas 4  

Part of the book series: Economics of Science, Technology and Innovation ((ESTI,volume 11))

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It has become cliché to argue that a chasm of significant proportions has developed between mainstream economic analysis 1 of technological advance and business practice. This chasm is often attributed to the insistence of many economists to cling to old-fashioned ideas concerning the creation and diffusion of innovations and to disregard the pragmatic study of technological progress. The resulting underestimation of the complexities of the process of technological advance and the institutions which affect it has had serious consequences on the predictive ability of theory. 2

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Vonortas, N.S. (1997). The Process of Technological Innovation. In: Cooperation in Research and Development. Economics of Science, Technology and Innovation, vol 11. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-5511-7_4

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