Technology Cycles

Technology consists of the knowledge, tools, and techniques used to transform inputs (raw materials and information) into outputs (products and services). A technology cycle begins with the birth of a new technology and ends when that technology reaches its limits and dies as it is replaced by a newer, substantially better technology.

For example, technology cycles occurred when air conditioners supplanted fans, when Henry Ford’s Model T replaced horse-drawn carriages, when planes replaced trains as a means of cross-country travel, when vaccines that prevented diseases replaced medicines designed to treat them, and when battery-powered wristwatches replaced mechanically powered, stem-wound wristwatches.

From Gutenberg’s invention of the printing press in 1448 to the rapid advance of the Internet, studies of hundreds of technological innovations have shown that nearly all technology cycles follow the typical S-curve pattern of innovation.

Early in a technology cycle, there is still much to learn, so progress is slow, as depicted by point A on the S-curve. The flat slope indicates that increased effort (in terms of money or research and development) brings only small improvements in technological performance.

Fortunately, as the new technology matures, researchers figure out how to get better performance from it. This is represented by point B of the S-curve. The steeper slope indicates that small amounts of effort will result in significant increases in performance. At point C, the flat slope again indicates that further efforts to develop this particular technology will result in only small increases in performance. More importantly, however, point C indicates that the performance limits of that particular technology are being reached.

After a technology has reached its limits at the top of the S-curve, significant improvements in performance usually come from radical new designs or new performance-enhancing materials. That new technology is represented by the second S-curve.

Eventually, however, the new technology will replace the old technology. When that happens, the old technology cycle will be complete, and a new one will have started.