National System of Innovation’ Contributions Essay

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Introduction

Disruptive and ‘sustaining’ technologies are emergent innovations that tend to change conventional technologies gradually or radically. Owing to their nature and comparative advantages that accrue the adopters of the innovations, numerous countries, companies, and industries have attempted to commercialize disruptively and ‘sustaining’ technologies. The rise of disruptive technologies in the contemporary world has phased out many companies that cling on to their old traditions of operations. Nevertheless, new entrants into the markets who take advantage of disruptive technologies have reaped handsomely from the innovations. As such, various countries have attempted to reform their national systems to commercialize disruptive technologies. While many proponents highlight that national systems have done a lot to facilitate the commercialization of disruptive technologies, I suppose that the national systems have done little to commercialize disruptive and sustaining technologies.

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National systems and commercialization of technologies

At the outset, it is important to recognize that disruptive technologies have some fundamental requirements for them to be able to replace conventional technology. This involves such areas as technology. With this in mind, it is essential to notice that various national systems have failed to adopt the appropriate technologies for their industries to replace the existing technology. In particular, Danneels (2004, p. 45) argues that within the broader requirements of disruptive and sustaining technology, there are areas that require refinement, especially those that enhance the commercialization of technologies. These gaps have been apparent in many industries and national systems. With these areas not successfully addressed, national systems are doing little to commercialize the emergent disruptive and sustaining technologies.

It is important to consider various phases that disruptive technologies undergo before their full commercialization. While these areas succeed each other, failure by national systems to place emphasis in all or one of the phases may lead to low-level commercialization of technological innovations (Danneels 2004, p. 47). The first stage is the emerging phase, during which there are new products and innovations in the market. These products attempt to replace existing technologies in a radical way, and industries perceive them as threats to the existing products.

In this phase, new sectors and industries come into the market. For instance, there was an emergence of new sectors relating to electronics by the end of the 20th century. The sectors now have grown to include information and technology with other areas expected to emerge. As Christensen & Raynor (2003, p. 56) explicate, national systems have failed to be flexible enough to incorporate the new sectors in their frameworks and allow the products to enter the second phase of development. This implies that the lack of flexibility within national frameworks that guide innovations has been detrimental to the commercialization of disruptive technologies (Christensen 1997, p.13).

While some national systems fail to support technologies, others market disruptive and ‘sustaining’ technologies. It is critical to appreciate that the second stage is typical of diminished risk for products’ failure, and it attracts increased production costs (Christensen & Raynor 2003, p. 56). Besides, product differentiation among products in the markets also characterizes this stage of development and commercialization of disruptive technologies (Christensen 1997, p. 71). Companies make products that are different from other products by competitors. Although they utilize similar technology, product differentiation at this stage is apparent. Nonetheless, it is at this stage of development that many technologies fail to have any impact in the market and consequently collapse. Mohr & Slater (2005, p.12) explain that disruptive technologies fail at this phase owing to the failure of design standards that national systems prescribe. Besides, governments fail to see disruptive technologies like products that require immense commercialization and fail to design regulatory frameworks that enhance the successful implementation of the innovations (Mohr & Slater 2005, p.12). As such, the national standards are currently doing little to facilitate the commercialization of technological innovations.

The mature phase is the third stage of the process of commercialization of innovation and technological products. As such, products fail at this stage, owing to the increased need to minimize production costs and focus on profit maximization. Companies that are able to exploit this phase and dominate the emergent markets may fail to achieve this objective due to countries’ provisions and other rules that may impede the disruptive technology to emerge. Owing to the need to reduce costs, the end-user of the innovations may end up paying up a significant proportion of the production cost (Slater & Olson 2001, p. 67). This makes technology at this stage very expensive, making authorities to intervene. As such, the national systems allow the existing technology to proceed and typify the markets with disruptive technologies unable to displace them successfully. As such, the national systems lead to slowed commercialization of new products. It is critical to enhancing the ability of the current system to be open and flexible to innovations.

Successful marketing of innovations and disruptive technologies is dependent on the ability of national systems to adopt and diffuse innovations. It is important to notice that there are different categories of national systems that may allow the successful implementation of technologies. Particularly, Slater & Olson (2001, p. 34) explain that different characteristics and segments of national systems of innovation may bring about different results and affect commercialization in both positive and negative ways. For instance, national systems that allow companies to pioneer the markets as early market innovators have the characteristics of enthusiasm and zeal. Slater & Olson (2001, p.16) assert that such national systems are typical of motivated adopters of technologies who appreciate the role of technology in shaping human society. Besides, the segment embraces technology and is able to put up with hitches that may be pertinent to the adoption of technological innovations.

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While the aforementioned segment may enhance the adoption and commercialization of disruptive technologies, Slater & Olson (2001, p.12) point out that other segments of adopters that typify numerous national systems of innovations are unable to enhance the commercialization process. Particularly, they say that segments such as laggards and late majorities are unable to tolerate technology and innovation (Slater & Olson 2001, p. 76). In fact, the two groups are the majority and represent conservatives who perceive technological innovation and consequent adoption with a lot of skepticism. With such characteristics, national systems of innovation are, in most instances, unwilling to facilitate adoption and commercialization of disruptive technologies. Therefore, it is apparent that numerous systems that provide a framework for the adoption of technology are adamant about commercializing the technologies and, thus, act as impediments to the process.

Many national systems of innovation are unable to have an appropriate market orientation. In this case, they do little to understand the needs of the customers prior to the development of their respective technologies. Research has shown that market orientation is important during the emerging phase of innovations, but this influence diminishes as the product reaches the maturity phase (Slater & Olson 2001, p. 43). This implies that national systems of innovations that fail to enhance the comprehension of the latent needs of the consumers may lead to innovations that are difficult to commercialize. Mohr & Slater (2005, p.15) explain that many national systems are ignorant of the customers’ needs by embracing technology at its maturity phase.

To that end, the process of commercialization of technological innovation becomes an expensive venture that may fail to achieve its objectives. For instance, early innovators are mainly in industrialized countries, while the majority of late adopters are in developing countries (Mohr & Slater 2005, p. 14). As such, the national systems of the developing countries have continuously adopted technology at its mature stages, making it almost impossible to adopt appropriate technology that addresses the pertinent issues and needs of their customers. Notably, failure by national systems to consult with early innovators regarding the needs of their customers makes it difficult for them to commercialize technology that is not relevant and does not address their issues fully.

Further, Hamel & Prahalad (1994, p. 57) point the failure by national systems to facilitate the process of commercialization of technology innovations due to a lack of marketing strategies to achieve the goals of commercializing innovations and technology. Specifically, they articulate that national systems are typical of vague strategies that make the process uncertain (Hamel & Prahalad 1994, p. 57). While innovation and technology may seem spontaneous, it results from the strategic process of planning that ought to have a clear structure of commercializing the final product.

From the onset, new market entrants may have such a strategy, but the existing institutions may be unable to integrate the strategy into their operations. In particular, while telecommunication firms such as Verizon have continued to integrate technology and ultimately remained profitable, new market entrants such as LG and Nokia have been successful and replaced other preexisting rigid firms (Bessant & Tidd 2011, p. 47). It is vital to notice that marketing strategy is pertinent to all the processes of selling, and ignorance of the process may result in poor commercialization of technology and innovations. Hence, Bessant & Tidd (2011, p. 54) claim that national systems ought to be responsive to technological innovations that will propel the countries to market technology.

Conclusion

In sum, national systems of innovations have failed to facilitate the successful commercialization of technology and innovation. First, they are typical of inflexible and rigid frameworks that are irresponsive to technological advances. Besides, the systems do not appreciate that the development of technology happens in stages during which failure to address the issues typical of every phase may reduce the innovation’s potential. This may lead to the collapse of innovations and technological products. Segmentation of adopters makes the process of marketing technological innovations, an expensive venture, especially when the national systems are conservative and demonstrate skepticism to technology. Marketing strategy and market orientation are other aspects of technology that are apparently lacking in many national systems. All these factors have led to the conclusion that national systems have done little if anything to facilitate the commercialization of disruptive technology.

References

Bessant, J & Tidd, J 2011, Innovation and Entrepreneurship, John Wiley & Sons, West Sussex.

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Christensen, C & Raynor, E 2003, The Innovator’s Solution: Creating and Sustaining Successful Growth, Harvard Business School Press, Boston.

Christensen, C 1997, The innovator’s Dilemma, Harvard Business School Press, Boston.

Danneels, E 2004,’Disruptive Technology Reconsidered: A Critique and Research Agenda’, Journal of Product Innovation Management, vol. 21 no. 4, pp. 246–258.

Hamel, G & Prahalad, C 1994, Competing for the Future, Harvard Business School Press, Boston.

Mohr, J & Slater, S 2005, Marketing High Technology Products and Innovations, Prentice-Hall, New Jersey.

Slater, F & Olson, E 2001, ‘Marketing’s Contribution to the Implementation of Business Strategy: An Empirical Analysis’, Strategic Management Journal, vol. 22 no. 11, pp.1055–1068.

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