Technology Life Cycle: Guide to Understand the Stage of Innovation

Every product has a life cycle, but technological products, by their nature, seem to grow, mature, and decline faster than other products.

If you have gone on to develop new technology, how soon it will gain a competitive advantage is the key.

Have you gone on to look at each stage of the cycle to see how it will lead to profit maximization? Hence, there is a need to reshape your investment strategies accordingly.

What Is the Technological Life Cycle?

Technological change is the result of discoveries or innovations. Every invention may be new, and it can be a combination of existing technological elements.

An invention becomes an innovation when you apply it for the first time. Even the process of technological change is linked to innovation.

Technological change occurs through diffusion and substitution. A simple form of technological innovation occurs when a new form of technology, over a substantial period, captures a major share of the market.

Though there is a broad spectrum of factors that can have an impact on the diffusion and substitution processes

The definition of a product life cycle

A product, like people, tends to have a lifecycle, and a product lifecycle formulates the stages where a product starts as an idea before it is phased out of the market.

The new contemporary products grow over time, and the older established products lack in popularity.

All the products fail to survive to reach the final stage. The demand for a few of them continues to grow, whereas it continues to fall for a few others.

Make sure that your products are up-to-date and aligned with the business requirements so that the business remains healthy.

Every business needs to constantly innovate so that its value proposition complies with current and future trends.

Breaking down the technology life cycle

The technology life cycle is different from the life cycle of a product, as it deals with the performance of the product in the marketplace, whereas the lifecycle of a product goes on to focus on various levels of technology in the development of a product.

There is bound to be the utilization of technology in the business process. It harps on the commercial gains of the technology used in the business process of a product.

When it comes to the technological life cycle, it is mainly concerned with the cost and time of developing an innovative technology style that gives the business an edge.

Developing a competitive product can have a major impact on the entire life cycle of a technology, making it longer or shorter.

The technological life cycle’s shape is called the “S-shaped curve.” Most renowned companies develop this technology for their benefit.

The Phases Of The Technology Life Cycle

Below are the phases associated with the technology life cycle of a product.

Research and development phase

This phase is also referred to as the “bleeding phase,” as the income from the inputs embedded in the technology is negative, and the possibility of the technology failing is higher.

Since the revenues are high, the money for developing this technology comes from your pocket.

At this stage, you must take the feedback on the technology that industry experts have developed and tweak it so that it complies with industry standards, giving it an edge from a novelty perspective.

Ascent phase

This phase of the technology life cycle is referred to as the “leading edge,” as the company starts to recover its expenses and costs and the technology it has developed begins to gain strength.

It goes beyond the initial phase of development to get accepted in the market.
The onus is on the company to create all hype about the innovation as the new technology trends tend to gain acceptance from all quarters.

Maturity phase

The phase emerges when the gains of the technology are stable and high, but there exists a point of saturation.

The public is well accepting the developed technology as the competitors are well aware and caught the realms of the developed technology. The revenues are bound to take a hit once the technologies developed start to become commodities in the market.

To remain relevant in the market, it is necessary to make innovative changes in technology while keeping the customers’ evolving needs in mind. An eye on the competition is also necessary at this stage.

Decline phase

This is an inevitable stage of the technology life cycle as the companies witness a decline on the sales front as there arises a need for a new form of technology.

In some cases, the companies could reach a point where there is no return, and technology replacement is needed.

The best possible step the company can take is to move out of the current technology and incorporate its resources in a new project where the returns could be substantial.

The four stages of a technological life cycle

There are four stages of a technological life cycle that are depicted as follows:

Four Stages Of Technological Life Cycle

  • Innovation stage
  • Syndication stage
  • Diffusion stage
  • Substitution stage

Innovation stage

The stage represents the growth of a new product, material, software, or process from research and development activities.

In a company’s research and development department, new activities are planned and executed depending on the current trends in the market.

The stage is quite an early one, as the ideas have to be tested and verified, taking into consideration the internal and external factors that may impact a business’s operations.

Syndication stage

The stage emphasizes the demonstration and commercialization of the new technology involved. The process, products, or materials with the optimal resource for success must be utilized immediately.

Many innovations are put on hold in the research department, and only a small percentage is used for commercial purposes. The outcome of the same is dependent upon economic factors.

Diffusion stage

The focus of this stage is for the new technology to penetrate the market as users widely accept it due to its novel creation and innovation.

They result in enhanced brand value, higher profits, and elevated revenue generation, making it a market leader.

But note that the demand and supply of factors jointly influence technology diffusion.

Substitution stage

This stage is the last one in the technological life cycle, and it showcases a decline in the use of technology due to the emergence of another form of technology that caters to the present needs of the target market.

The time frame for this substitution stage depends on the market dynamics, with various technical and non-technical factors influencing the substitution rate regarding technology.


With time, business managers will need to embrace and participate in the growth of technology. Apart from improving individual firms’ financial performance and security, innovations also play an important role in increasing product sales.

By using a life cycle approach, businesses can track the current progression of technology. If an innovation is unique, it needs to be protected with a patent.


What is the technology life cycle?

The technology life cycle is a model that explains how technology evolves over time, from its introduction to the market to its eventual decline.

What are the stages of the technology life cycle?

The stages of the technology life cycle are introduction, growth, maturity, and decline.

What happens during the introduction stage of the technology life cycle?

During the introduction stage, new technology is introduced to the market. It is often expensive, has limited functionality, and may only be adopted by early adopters.

What happens during the growth stage of the technology life cycle?

The technology gains wider acceptance during the growth stage, and its adoption rate increases rapidly.

It becomes more affordable and accessible to a larger audience.

What happens during the maturity stage of the technology life cycle?

During the maturity stage, the technology reaches its peak adoption rate.

It is widely available and often has multiple competitors in the market.

What happens during the decline stage of the technology life cycle?

During the decline stage, the technology is gradually phased out as it becomes obsolete, outdated, or is replaced by newer and more advanced technologies.

Why is it important to understand the technology life cycle?

Understanding the technology life cycle is important for businesses and individuals as it helps them to plan their investments and innovation strategies more effectively.

It also helps to identify opportunities for growth and potential threats to their current business models.

Can technologies skip stages in the technology life cycle?

Yes, it is possible for technologies to skip stages in the technology life cycle, particularly if there is a major breakthrough or disruptive innovation that rapidly changes the landscape.

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