Product and technology life cycles

For the following analysis, it would be helpful to consider the implications of product and technology life cycles for the exercise of technology evaluation.  The curve of product life cycle is S-shaped and shows three phases : growth, ascent and maturity phases.  By then, however,  they will reflect the growth of the industry rather than of the product. 

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Overtime, some earlier forms of a product phase out (fade into oblivion) or shift from one industry to another.  For significant innovations like the  automobile, television and computers, for which the overall product life cycle is comparatively long, the subcycles constituting it may be of different lengths.

The technology life cycle has four phases:  latent development, ascent, maturity and decline. Very basic products have very long product lives, but particular technologies involved in making or servicing  these products (typically)  have shorter lives. The technology life cycle can be regarded as having a rising potency on the ascent phase; it reaches a peak at some point and declines until it ceases to have valid potency.

The reconfiguration of technology

It is generally difficult to transplant technology from one environment to another.  In other words, products or processes developed in the context of one market environment are seldom wholly suitable in another. 

This sometimes holds true even for technologies transported between industrialized countries.  For example, the composition and form of the leading detergent products are markedly different in the United States, Western Europe and Japan even though the principles under which detergents are formulated remain the same.  This happens because of differences in washing traditions, the fibre mix in  the laundry basket, demographic factors etc.  The same phenomenon occurs in the motor car industry; even though the manufacturer and trade marks are the same in different countries, the car models differ significantly in such features as seating capacity, number of doors, thrust, acceleration, fuel consumption, suspension and comfort.

The technology transfer framework

By and large, most technology originates in industrialized countries, although the newly industrializing countries are becoming important contributors.  A technology package develops to meet an existing or forecast market need in its country of origin and is consistent with accessible resources.  It can be said to be “appropriate” to that environment.  Although such a technology may later be modified to use different raw materials and simpler levels of automation, it will still be recognizable as mature technology.

A mature technology reflects the capabilities of mass production, the market preferences of an affluent population and the workability and efficiency of a well-developed industrial infrastructure.  It also embodies a large number of major and minor improvements made over a long period of time.  Furthermore, a mature technology reflects the strength imparted to it by the legal framework in which it is used.

A state-of-the-art technology, particularly one on the ascent portion of the technology life cycle, is unlikely to be available for licence, especially to a licensee in the relatively amorphous marketing and legal environments of a developing country.  Even if it were available, it would most likely be inappropriate for a developing country, not only for the reason cited above but for others as well, such as a lack of technological complexity in the industrial structure of the host country.

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In industrialized countries technologies yield products or processes with specifications different from those of the innovative products. 

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The differences result from the processes of competition and imitation and from the mechanisms of market segmentation, product positioning and niche markets, which both multiply technologies and broaden their range.  Companies often consider exporting technologies to subsidiaries, joint ventures, or third parties for a number of reasons: to avoid home-market competition, to enlarge international market share, to gain access to more conducive markets and to offset development costs. 

The technologies may be offered for licence directly by the owner of the technology or through engineering companies and licence brokers.  For almost the same reasons, the technologies applied in products and processes in the mature or declining phase of the technology life cycle may become offered for licence and sale.  >>  Next