Choosing the right technology: a framework for success

For firms facing rapid technological change, knowing which technology to back need not be a guessing game or a purely creative exercise.

To understand how firms flourish in the new environment, we studied technological evolution in seven markets: external lighting, desktop memory, display monitors, desktop printing, data transfer, analgesics and energy storage devices. We covered these markets over quite a varied time period, from almost 200 years for analgesics to 30 years for desktop printers. From our in-depth analysis, we identified four challenges that firms need to confront to master technological change.

“Companies have a tough time keeping up with technological change and selecting the right technologies for their products.”

For companies in technology-driven markets, these challenges are a good point to start from when thinking about developing a growth strategy. Each challenge can be considered as a question. Even if a firm cannot fully answer each of these questions, just grappling with them can reveal the dilemmas it faces and help it define a coherent strategy.

In response to this, we provide a framework for informed decisions. The framework consists of identifying the levels of innovation, the competing technologies at each level, the dimensions of performance on which to compare them and the patterns of evolution on each dimension. 

Our study has shown that some prior beliefs about technology evolution and selection are wrong. It refutes the “confirmed wisdom” that technology evolution patterns follow simple successive S-shaped curves. Rather, patterns of evolution are complex, on multiple dimensions and only partly predictable. Importantly, firms need to invest in or at least monitor a portfolio of technologies in order to appreciate which technology to back.

The complete article was written by:

  • Gerard J. Tellis
    Professor of Marketing, Neely Chair of American Enterprise and Professor of Marketing, Director of Center for Global Innovation, Marshall School of Business, University of Southern California, U.S.
  • Ashish Sood
    Assistant Professor of Marketing, Goizueta School of Business, Emory University, U.S.
  • Notes: This research benefited from a grant by Don Murray to the USC Marshall Center for Global Innovation.

Download the full article pdf (pdf, 1,6 MB)

Ernst & Young refers to one or more of the member firms of Ernst & Young Global Limited (EYG), a UK private company limited by guarantee. EYG is the principal governance entity of the global Ernst & Young organization and does not provide any service to clients. Services are provided by EYG member firms. Each of EYG and its member firms is a separate legal entity and has no liability for another such entity's acts or omissions. Certain content on this site may have been prepared by one or more EYG member firms