Technology adoption lifecycle revisited

Technology Adoption Lifecycle Analysis (TALC)

New technology presents risk for many customers. They react differently toward this risk based on their innate characteristics, the wants and needs of their companies, and the behaviour of other buyers. The Technology Adoption Life Cycle (TALC) models how different groups of customers adopt to discontinuous innovation at different times. This model helps policy makers and technology developers build the best strategy for each phase of a product’s life.

Disruptive Innovation and the Technology Adoption Life Cycle

Disruptive innovation (Cristensen) refers to a new technology that gets its start away from the mainstream of a market and then, as its functionality improves over time, invades the main market. Such technologies are disruptive because they revolutionize industry structure and competition, often causing the decline of established companies. They cause a technological paradigm shift.

Technological paradigm shifts occur when new technologies come along that revolutionize the structure of an industry or market, dramatically altering the nature of competition, and requiring companies to adopt new strategies to survive.

Paradigm shifts appear to be more likely to occur in an industry when one, or both, of the following conditions are in place. First, the established technology in the industry is mature and approaching or at its “natural limit,” and second, a new “disruptive technology” has entered the marketplace and is taking root in niches that are poorly served by incumbent companies using the established technology.

Established companies are often aware of the new technology but do not invest in it because they listen to their customers, and their customers do not want it. Of course, this arises because the new technology is early in its development—only at the beginning of the S-curve for that technology. Once the performance of the new technology improves, customers do want it, but by this time it is new entrants, as opposed to established companies, that have accumulated the knowledge required bringing the new technology into the mass market.

Five stages of the adoption process

Most new technologies, including disruptive innovation, follow a similar technology maturity lifecycle, which while similar to a product life cycle, applies to an entire technology or a generation of technology.  From a layman’s perspective, the technological maturity or TALC phases can be broken down into five distinct stages.

  1. Bleeding edge – any technology that shows high potential but hasn’t demonstrated its value or settled down into any kind of consensus. Early adopters may win big, or may be stuck with a white elephant.
  2. Leading edge – a technology that has proven itself in the marketplace but is still new enough that it may be difficult to find knowledgeable personnel to implement or support it.
  3. State of the art – when everyone agrees that a particular technology is the right solution.
  4. Dated – still useful, still sometimes implemented, but a replacement leading edge technology is readily available.
  5. Obsolete – has been superseded by state-of-the-art technology, maintained but no longer implemented by the specific firm.(Moore)

Moreover, the primary phases of the Technology Adoption Life Cycle can be mapped to stages of the product life cycle providing specific insight into market dynamics at any stage of technology adoption defining target user profiles, product/service requirements, communication channels, support dynamics and stakeholder strategies.  In the figure below, it becomes evident that during the Early Adopter stage:

  • Target users are innovators or early adopters; and
  • The product life cycle is initiating but will not reach critical mass until it has successfully crossed the Pilot Chasm risk (note: this is generally true for technologies that require significant investment in hardware, infrastructure and/or training…other technologies reach an Early Adopter chasm instead).

Chart of TALC mapped to Product Life Cycle S Curve (SEPA International adaptation)

TALC provides a visual metaphor accompanied by specific guidelines for understanding the current state of the market and the next steps required to secure stable market development.

The TALC models explain that early adopters and innovators are essential for any new technology as proof of concept but invariably, successful transition to the early mass market requires regrouping and targeting of an entirely different user profile: the pragmatist. If this transition is not affected correctly, the initiative and underlying technologies risk falling into the TALC model chasm delaying significantly any future adoption.