Changing Paradigms - I

The Market Pull

I concluded last week the Saga of Research vs Innovation whose main take away should be the differences in skill and organisation underlying "the making" of research vs "the making" of innovation, differences that result in failures when organisations, including EIT ICT Labs, try to tackle innovation in the same way they tackle research.

1. Market pull

I would like now to start exploring some paradigm changes that are affecting both research and innovation starting with the most crucial one: the prominent role of the market.

Till last century (that's not so far away, 15 years ago...) we have seen that technology was enabling new services and new products. Actually, the market had to wait for technology advances to see innovation coming in.

That was the age of technology, it started some 80 years ago, I would say, with the invention of new chemical production processes first, like the ones that led to plastic materials, and then with the exploitation of electronics that in the end changed the rules of the game and it is still impacting overall evolution today. The availability of technology in the last century was limited and the marked had to wait for such an availability to progress. In a way technology dictated what was possibile and pushed the market in the direction of those possibilities. This is reflected by the paradigm of "technology push". 

Note that with availability it is meant here the set of characteristics that can make a technology viable on the market: its existence, of course, as well as its affordability and usability. More recently we have to include in the set of characteristics defining technology availability also its cultural acceptability (particularly evident in genetics technology advances).

Based on this set of characteristics technological availability in the last century was scarce and any advance in its availability would push the market towards its exploitation. Demand exceeded Offer.

At the turn of the century this scarcity started to fade away and the market discovered that there were alternative technologies available that could innovate on the market. Hence, the steering shifted from the technology push (here I am, use me!) to a "market pull" (this is what I want and therefore let's go this way).

As shown in the drawing, technology (availability) advances (research) enables new services and new products and these are indeed brought to the market. In this sense we are still seeing a technology push, and most technology based start ups are indeed doing just that: prod the market with their new product/service leveraging on technology advances, aka research results.

However, the market reaction to this push creates a feedback onto the technology advance, in the sense that a success in the market leads to more investment being funnelled on that successful technology that in turns leads to more advances through research (remember that research transform money into knowledge).

On the other hand, a failed push results in venture capitalists cutting funding to that technology (as well as the stop of investment within a company) with the outcome that that technology no longer improves.

Now, this does not seem that different to what happened in the past, if something does not succeed in the market it just fades away. Actually, there are some, important, differences that have resulted in the technology push, market pull paradigm shift.

Author - Roberto Saracco

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