Tuesday, August 03, 2004

S Curve vs. Z Curve: The Battle for Competitive Advantage

R&D is all about discovering technology (through research) that can be applied to a new product profitably (through development). Ivory Tower projects aside, most companies rely upon being the first with a new idea to give them a competitive advantage. That advantage can be maintained through trade secrets, patents, and complexity of application. But eventually the competition is going to find a way to match that advantage, and if possible, surpass it. Therefore, everything that R&D and the CTO do will eventually be commoditized.

This fact is why Ford Motor Company continues to invest in R&D. If Henry Ford's ideas for a modern production line had not been copied by every other car company, Ford could still rely on them for its profit margins.

Nicholas Carr draws the Z curve to illustrate the declining advantage provided by IT. It illustrates the fate of all new technologies in providing an advantage. Nothing is new and unique forever.

Web Source: Digital Renderings: The Z Curve and IT Investment


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