1. Technology and Innovation Leeds School of Business University of Colorado Boulder, CO 80309-0419 Professor Stephen Lawrence

2. Course Outline Introduction to OM Productivity Linear programming Quality SPC tools Timeliness Queueing Theory Flexibility Inventory Theory Technology and Innovation Project Management Operations Strategy Business Performance Excellence Charles Sheeler Suspended Power 1939

3. Agenda Competing with technology S-Curve analysis Disruptive technologies Innovation in history Normal vs. revolutionary innovation Paradigms Managing Technology Technological Forecasting

4. The Value Equation

5. Competing with Process Innovation Competing with Marketing Capabilities Competing with Marketing Capabilities Competing with Technological Capabilities Competing with Technological Capabilities Competing with Operational Capabilities Competing with Operational Capabilities Process Enhancements Product Enhancements

6. Evolution of Product/Process Innovation Product Innovation Stage of Product Life-cycle earlylate Rate of Innovation high low Process Innovation

7. Trajectory of Tech Innovation Technological performance often follows an S-shaped curve Performance Effort (funds) Physical limit of technology Foster, Innovation: The Attackers Advantage, Summit Books, 1986

8. Performance Effort (funds) Physical limit of technology Foster, Innovation: The Attackers Advantage, Summit Books, 1986 Successive Tech Innovations

9. Patterns in History Unorderly not an orderly process of research and development; few elements of planning or cost-benefit analysis. Breaks constraints. Technological change involves an attack by an individual on a constraint that is taken as a given by everyone else. Unexplained timing. Often no good reason why an invention was made at a particular time and not centuries earlier (e.g. wheelbarrow and stirrup in Medieval times). Moykr, The Lever of Riches: Technological Creativity and Economic Progress, Oxford University Press (NY), 1990.

10. Stages of Technical Evolution Invention: Acquisition of new knowledge Innovation: Application of new knowledge Diffusion: Acceptance and adoption of new knowledge Analogy to Evolution Invention = Mutation Innovation = Adaptation to Environment Diffusion = Evolutionary Success Lesson: dead ends have value

11. Normal vs. Revolutionary Innovation Normal Innovation innovation with an accepted “paradigm” incremental in nature increasing specialization required Revolutionary Innovation often a response to “intellectual crisis” often proceeded by competing theories and ideas changes the world view of a discipline establishes a new paradigm Kuhn, T.S., The Structure of Scientific Revolutions, Univ of Chicago Press, 1962.

12. Paradigms Paradigm – a set of rules and regulations (written or unwritten) that does two things: Establishes or defines boundaries Governs how to behave inside the boundaries in order to be successful

13. Examples of Paradigms Everything that can be invented has been invented Charles H. Duell, Commissioner, U.S. Office of Patents, 1899. Louis Pasteur's theory of germs is ridiculous fiction. Pierre Pachet, Professor of Physiology at Toulouse, 1872 Airplanes are interesting toys but of no military value. Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre. There is no reason anyone would want a computer in their home. Ken Olson, president, founder of Digital Equipment Corp., 1977 640K ought to be enough for anybody. Bill Gates, 1981

14. Innovation as Chaos Path dependent and self-reinforcing Initial conditions are critical Small perturbations in initial environment can have a large subsequent in eventual technological evolution Inherent randomness (unpredictable) Positive feedback reinforces an evolutionary path Example: Beta vs. VHS video tapes Example: PC operating system

15. The Future? What disruptive technologies are currently evolving that are fundamentally changing the way we produce and deliver goods and services? What paradigms are being broken?