Investing in new technology is a risky decision that requires careful consideration of the interplay of factors with regard to its maturity, adoption, and social application. The decision by the Saudi Government to suspend a multibillion-dollar solar power generation plant is a major loss for energy companies (Jones and Said). The majority of them considered it as an opportunity to participate in a project that would inevitably end the kingdom’s reliance on crude oil, diesel and gas for the production of electricity. The main objective of the project was to boost the country’s capacity to produce renewable energy.
The high interest that the project attracted from various investors can be explained using the Gartner’s life cycle that identifies five phases of a new technology’s adoption. The first phase is referred to as technology trigger, which covers the period between the creation of a new innovation and when people hear about its potential. At this point, the media publicizes the technology in order to attract the interest of the public.
This phase is very important to investors because it aids in estimating the kind of reception that the technology will receive once it has been introduced in the market. Although the commercial viability of the technology is usually unknown at this phase, a thorough market analysis is necessary with regard to assessing its potential to succeed (Jones and Said). The second phase is known as the peak of inflated expectations. It includes the results of the publicity created about a proposed technology. At this point investors learn about the success score of the proposed innovation depending on the results of market analysis. Most companies choose to either engage or abstain from investing in such projects.
The suspension of the solar power project is a major loss to many startups in the country that had hinged their financial growth on its development. Softbank chose to invest the money set aside for the solar power plant to support new global technologies and companies (Jones and Said). The fact that key details of the project were not clear, many investors opted not to invest in the power plant because it would have been costly in the long run.
This decision generated disappointment, which is the third phase of the hype cycle. It is characterized by waning interest from investors due to experiments that fail to deliver the desired outcomes. The fourth phase is called slope of enlightenment, which entails efforts to demystify a proposed technology. The phase is achieved through the development of pilot projects that are used to demonstrate the value of the technology in the market.
This phase is very crucial to an investor because conservative companies often choose to take the necessary caution (Jones and Said). After establishing the viability of the solar power project, Softbank chose to invest its money in other projects that matched its interests. The final phase is known as stable productivity, and it involves the mainstream adoption of the proposed technology. It is characterized by clearly defined criteria for assessing the provider’s viability, as well as evaluating the benefits of the technology’s applicability and relevance in the market.
Although the solar power project has not reached this phase, energy companies and investors believe that it has huge potential based on the growing demand for renewable energy across the world. The solar and wind-power project that the Saudi Arabia government had started before the agreement with Softbank is a clear indication that the proposed technology was destined to succeed had all the details been articulated in the right manner (Jones and Said).
Work Cited
Jones, Rory, and Summer Said. “Saudi Arabia Shelves Work on SoftBank’s $200 Billion Solar Project.” The Wall Street Journal. 2018. Web.