[MUSIC] This is Mike Rosenberg and we're still with strategy and sustainability. This is Session 2 on strategic issues and the fourth of these issues, which is technological innovation in segment five because we started with the introduction. But it's the fourth of the strategic issues. The technology lifecycle. This is technology and this is from old I used to work there a long time ago. That technology is born, it grows, becomes mature, and then it goes out of favor. This is a very standard thing. Most technologies come and go over time. At one point, in a technology's development, you get what an academic called Dossy called the dominant paradigm, dominant design. That everybody agrees that this is what technology should look like. This is the DC-3, then plane Douglas DC-3, which when it came out was the first aeroplane. Fixed wings, two engines, tail in the back. Fantastic aeroplane. Very, very successful. And ever since then, aeroplanes look like this. If you go back to the Wright brothers and before the DC3, you'll find some aeroplanes with the propellers in the back or the tail in the front, or two wings, all kinds of combinations. But the DC3 because the dominant design, and most aeroplanes we see today look like this. If you look at technological evolution, and this is a chart which looks at how fast did the new technology go to 50% of penetration in the North American market. And by the way, I apologize that many of my examples through this whole course are North American examples. I grew up in the United States. I live in Europe. But there's just a lot of examples from there. I would urge people from other parts of the world to think about the examples in your country. And if they're compelling, please, please write to us and send us more examples. because we're always looking for new ideas. But it took the automobile for example 14 years to go from 10% penetration in the United States to 50%. Then another 15, 20 years to get to 90% penetration. Meaning, how many people had a car? It took the telephone a similar amount of time. It took radio a similar amount of time. Refrigerators, how long did it take refrigerators to get there? Color TV, how long did color TVs take? How long did the personal computer take? And then what you see is, there's a break and things start to get a little bit faster. The smartphone only took seven years to get to 50% penetration. And what most people agree with is that technological development is getting faster as time goes by. Clane Kutchinson at Harvard wrote a whole series of books about disruptive technology. About how when new technology comes along and it slowly, slowly gets better, at some point it gets good enough to replace the technology that its replacing. Then you get a complete change in technology, which can happen. Typically, the new technology is lighter, Faster cheaper or perhaps more ecologically balanced than the old technology. And it takes a while for it to develop a niche market before it actually becomes good enough. Sometimes when that happens, the companies which were making the old technologies just didn't see it coming or didn't invest in it. And then you find new companies emerging. One of the questions which a lot of people ask is, is the electric car going to be the next disruptive technology? This is clearly what Elon Musk and the people of Tesla are betting on. This is what the people at Ford, General Motors, and the other major car companies believe is not going to happen. They think some people will buy electrics, but they're still betting very heavily on internal combustion engines. These are just examples of disruption. Here's a test example. The LED light bulb which is basically changing all the light bulbs on the planet. And if you go back in time, you can see the old returnable bottles which got replaced by cans. Then aluminum cans, then PET bottles. So you can see how distribution of soft drinks changed as the technology changed over time. The last thing that I want to talk about in terms of technology is, new science can also bring new problems. So James Lovelock is very well known. He was the original guy who came up with this idea of Gaya, Gaya being the earth which is a self sustaining organism and can correct itself. Very, very well respected. Perhaps the father of modern ecology. But in the 1950s, Mr Lovelock invented this device which you can see, which is the electron capture device. Which is the first time that we're able to really measure pollution in the air. And of course you couldn't have the Clean Air Act, you couldn't have any of that stuff, if we weren't able to measure pollution. Because who knows what it is. Tide was a revolution in dishwashing. The automatic washing machine which changed the world in many, many ways. But dishwashing soap for many years, had phosphates in it. And phosphates can give too many nutrients to rivers, ponds and lakes producing these algae blooms which eventually choke the life out of the rivers. Phosphates were first found to do damage in the 1970's. Substitutes were developed. But again, it took 10 or 20 or even 30 years for different states and different countries to ban phosphates in laundry detergent. The latest thing of this nature is something called Bisphenol A, which is, or BPA, an additive to plastic which makes it very hard, very thin, and very transparent. It seems that at the molecular level, BPA looks somewhat like human hormones. And there is fear that it could effect our human development, because our bodies might confuse trace amounts of the chemical for hormones. And now, most tests have found it's safe, but just in case. The European have banned BPA from baby bottles and the Food and Drug Administration has recent removed its permission to use this stuff. Again, you're in the BPA business, there's no real proofs that it's harmful, but it might be harmful, and you've got to be careful. Just to put all of this stuff in prospective, however, I did want to mention what the Gardener group calls the Hype Cycle. Which is new technology comes along, people get really excited about it, then it doesn't work. And then eventually it comes to a plateau. So there's a lot of technologies out there. There's a lot of technologies which are potentially more environmentally friendly. Some will be adopted, some will not be adopted. There are other things we are doing today which might be proved to be harmful in the future. And again, in each business, in each segment, you got to think about what's going on and really drill down to understand to what degree new technology can affect you. [MUSIC]
