Dominant Design Technological Discontinuities and Dominant Designs: A Cyclical Model of Technological Change Philip Ande

1. Dominant DesignTechnological Discontinuities and Dominant Designs: A Cyclical Model of Technological ChangePhilip AndersonMichael L TushmanTulkitsee: Heikki Virkkunen

2. What does it mean Technological breakthrough or discontinuity initiates an era of intense technical variation and selection culminating in single dominant design Over the time 50% of the implementations are based on dominant design, only one design can meet this goal Many researches suggest that technological change can be characterized as a sociocultural evolutionary process of variation, selection and retention.

3. Life cycle of dominant design Technological discontinuity 1 -Era of Ferment -Design competition -Substitution Dominant Design 1 -Era of incremental change -Elaboration of dominant design Technological discontinuity 2� etc

4. Technical discontinuity Rare and irregular intervals in every industry an innovation appear that command a decisive cost or quality advantage over current solution Innovations depart dramatically from the norm of continuous incremental innovation that characterizes product classes Triggers a period of ferment that is closed by emergence of dominant design These discontinuities either affect underlying processes or the product themselves

5. Process vs. Product discontinuities Process Catalytic cracking of petroleum Electronic imaging (vs light-lens copying) Genetic engineering Product Jet (vs piston) engines Diesel (vs steam) locomotives -Electronic (vs mechanical) typing CT scanners (vs x-rays)

6. Competence-enhancing and competence-destroying discontinuities Competence-enhancing discontinuity presents new ways to enhance productivity based on previous knowledge Usually works by retrofitting new parts of machinery to previous ones that automates tasks that were done by hand before, but still needing expertise to make it really work

7. Competence-enhancing and competence-destroying discontinuities Competence-destroying discontinuity presents new process or way to produce end product which renders obsolete the previous process knowledge Usually introduces completely new machinery or processes Allows newcomers to enter the field

8. Example: flat-glass industry At the beginning, dominant design was hand cylinder blowing -Needed artisan with skills 1903 The Lubbers machine -Displaced the artisan -Competence-destroying 1907 Improved Lubbers machine -Competence-enhancing 1917 The Colburn process -Displaced Lubbers machine -Competence-destroying Finally float-glass process, combined window and plate glass industries

9. Era of Ferment Introduction of radical advance increases variation in product class New innovations are usually crude and experimental when introduced In era of ferment, companies benchmark the new innovations and numerous implementations that occur Social, political and organizational dynamics select single industry standard or dominant design from number of technological opportunities Ends with the emergence of dominant design

10. Era of Ferment Old innovations are rarely just vanishing Business is built on previous innovation and companies need time to absorb and learn new technology New technology rarely works well and old technology is stretched to its limits to make last performance increases

11. Era of Ferment Variation of new innovation occurs Technology is not understood and because each company wants to differ from competitors HD-DVD vs blu-ray, SACD vs DVD-Audio, Amiga vs Mac vs. x86 The number of new designs introduced during era of ferment is greater than during the following era of incremental change

12. Birth of dominant design Dominant design emerges from market demand which is affected by combination of technological possibilities and individual, organizational and governmental factors Majority of potent adopters will wait the emergence of dominant design before investing to new technology Emergence of standard is a prerequisite to mass adoption and volume production of nextgen technology and sales will peak after the era of ferment �Discontinuity itself will not be dominant design because they are shaped by technical variation in the era of ferment� Could the dominant design be created artificially, by market demand?

13. Birth of dominant design �When patents are not a significant factor, techical discontinuity is followed by single standard� Variation is driven by random technological breakthroughs, and technological discontinuities initiate technological rivalry between alternative technological regimes -> Alliances -> multiple standards? If competition process is artificially forestalled, dominant design may not emerge. This is a case when company builds a thick layer of patents protecting dominant design and controls the diffusion via strategic license decisions. In these cases the emergence of dominant design is a matter of strategic choice for the innovating company Market power can put enough weight behind a particular design to gain popular fame thus making it dominant design

14. Era of incremental change Emergence of dominant design changes the competitive landscape, new designs must win market share from old de facto standards After dominant design arises, technological progress is driven by numerous incremental innovations of new dominant design instead of trying to invent new ones Technological regime becomes more orderly. Most of the total performance improvement over the lifetime of technology will occur outside era of incremental change Focus of competition shifts from higher performance to lower costs and differentiation via minor design variations and strategic positioning tactics

15. Benefits of dominant design Dominant design permits companies to design standardized and interchangeable parts to optimize organizational processes, volumes and efficiency Customer point of view: dominant design reduces product-class confusiond and decrease prices Dominant design reduces variation. Downside: creates monopolies in some cases Competence-destroying dominant designs will be implemented by newcomers of the industry while competence-enhancing dominant designs will be implemented by oldschoolers which already have invested in previous processes and knowhow. It's easier for newcomers to start from scratch.

16. Market force behind dominant design Producers and customers accept a package of relatively well known innovations in favor of technical excellence in order to reduce technical uncertainty -> dominant design is not frontier of technical performance Apple II & VHS were not best products of the day but provided the best overall package market needed Sales peak after dominant design emerges due to lower costs and public acceptance

17. Fin