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Chapter 3. Managing Technological Evolution > Projecting Foster’s S-Curves

Projecting Foster’s S-Curves

The incremental advances that occur within a technological framework and the radical shifts between technology frameworks can be presented graphically using a concept called the S-curve. Developed by Richard Foster, a McKinsey consultant, the S-curve shows the performance of a technology as a function of the amount of effort expended to develop it. That is, an S-curve allows you to show graphically the development of a particular technology.[2]

New technology products and services begin with a very low level of performance on the dimensions that are important to potential customers.[3] The performance of new technology products and services increase as the developers of those technologies invest time and effort in their development, improving them on the dimensions that customers care about. However, initially, the developers of a new technology achieve very little return on the investment of time and money in a new technology. When people first work on advancing a technology, they often spend time on developmental dead ends. Moreover, even when they do not head down dead ends, their progress is slow. As soon as researchers solve one problem, they are confronted with others, leading each problem-solving exercise to yield little in the way of tangible performance improvements. Ultimately, the developers of a new technology achieve breakthroughs that allow for dramatic improvement in performance. This improvement continues until the technology reaches diminishing returns, which then slows the rate of technology improvement. The result is an S-shaped curve of technology development (see Figure 3.1).[4]


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