Technology Trajectory Models

Technology-followers tend to begin with acquiring mature technology from advanced countries, and then make incremental improvements to manufacturing processes. Once they have accumulated manufacturing capabilities, they can move on to the next level of technology value chain. Process technology leads on to minor product innovations. As they accumulate product design skills, they become more confident in new product development. This technology development path reverses the direction of technology trajectory in developed countries where radical product innovations are followed by a series of incremental innovations to add new values.

Utterback provided a technology trajectory framework that explains innovation processes in developed countries. According to him, industries and firms in advanced countries develop along three stages: fluid, transition and specific. During the early stage of new technology development, competition among product designs becomes intense in fluid fashion. As product changes are frequent, so operational processes remains fluid. After going through trial and error in the market, a dominant product design emerges. Competition then shifts from product design to cost. Production capability and scale economies become more important. The production system gets more automated and specific, producing standardized product, and incremental process improvements become important. At the later stage of the state, technology followers in developing countries can come into play since they can compete in price with their low cost production system.

This model may change significantly with a shift in the techno-economic paradigm. This framework seems better suited for explaining technology trajectory in mass markets as opposed to small niche markets in which the issue of scale does not matter. A dominant design watershed in this model seems to explain innovation strategies of technology followers in transition periods when exercising a fast-follower strategy. Since technology followers can’t try out new business model due to costs and risks involved, they can follow technology leaders’ strategy by modifying the product designs in significant ways when imitation is possible.

Kim proposed a three-stage model – acquisition, assimilation and improvement – to extend the Utterback model. He developed this model to explain the process of technology accumulation in developing countries. Developing countries move along from acquisition of mature foreign technology including packaged assembly processes to assimilation of foreign technology to make differentiated products, then to improvement of mature technology. As such, the pattern of technology accumulation in developing countries (focusing on Korea) is fundamentally different from that of developed countries.

Lee et al. also propose the reversal process of innovation moving from mature to early phases. They argue that the three-stage technology model proposed by Kim takes place not only in the specific stage, but also in the transition and fluid stages as Korea progresses in their technology capabilities.

Although these models are useful to some degree in understanding and analyzing the process of technology accumulation and technology policy in Korea, this model doesn’t seem to consider the dynamics of technology trajectory in technology followers as they progress toward reaching an advanced stage.

Note: The rest of the analysis won’t be shared due to the proprietary nature of the content.