Disruptive Space Technologies

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24 International Journal of Space Technology Management and Innovation, 2(2), 24-39, July-December 2012

Egbert Jan van der Veen, Institute of Space Systems, German Aerospace Center (DLR), Bremen, Germany Dimitrios A. Giannoulas, Institute of Space Systems, German Aerospace Center (DLR), Bremen, Germany Marco Guglielmi, European Space Research and Technology Centre, European Space Agency, Noordwijk, The Netherlands Thijs Uunk, Delft University of Technology, Delft, The Netherlands Daniel Schubert, Institute of Space Systems, German Aerospace Center (DLR), Bremen, Germany

ABSTRACT

The theory of Disruptive Technologies explains the evolution of technologies that disturb the status quo of both dominant technology platforms and competitive market layouts. In this paper, the theory of Disruptive Technologies for the space sector is explored. This exploration is required because the Disruptive Technology theory is currently based upon the innovation dynamics of mass consumer markets, which are significantly different from the dynamics of the low volume, highly governmentally influenced space sector. The objective is to clarify the dynamics of innovation in space (with particular respect to technological disruptions) in order to help decision makers in their effort to support innovation in the development of space technologies. This is done by analyzing the dynamics of the space sector and the theory of Disruptive Technologies in respect to its applicability to the space sector. The result of these analyses leads to the creation of a theory that is tailored to the specific innovation dynamics of the space sector. The theory is termed Disruptive Space Technologies. Key element of this theory is the fact that Disruptive Technologies in the space sector focus mainly on technology disruption rather than market disruption.

Keywords: Diffusion of Innovations, Disruptive Innovation, Disruptive Space Technologies, Disruptive Space Technology, Disruptive Technology, Innovation Dynamics, Innovation Management, Space Innovation Management, Space Sciences

INTRODUCTION others. Improving the capabilities of space technologies, in order to increase the benefits The exploration (and exploitation) of space has that the utilization of space can offer, is a ma- resulted in many technological advances for jor goal of all space faring nations. Since the humanity in areas such as materials, naviga- Apollo age, the space sector has concentrated tion, telecommunications, medicine and many mainly on a conservative method of technology development, focusing on low risk incremental innovations, rather than breakthrough, radical DOI: 10.4018/ijstmi.2012070102 or disruptive innovations (Summerer, 2009).

One of the reasons for this situation is the fact aspects of this theory are examined and evalu- that space technology requires long and costly ated with respect to their applicability to the development phases with strict performance and unique market dynamics of the space sector. A environmental requirements. Another reason new concept for evaluating technologies using a that can justify this situation is the very high mix of performance attributes is also introduced cost of space transportation. These two factors here. Second, an analysis of the space sector have resulted in very stringent quality and flight is conducted. The factors that differentiate the heritage requirements. This situation, in turn, space sector from conventional, terrestrial mar- has created a paradigm, where the usage of kets are discussed and the peculiarities of the technologies with meager or non-existing flight space sector are explored. Third, the process of heritage is discouraged and, consequently, new disruption in the space sector is investigated by technologies do not gain flight heritage because analyzing a number of technologies that have they are not selected (Szajnfarber, Grindle, & been disruptive to the space sector in the past. Weigel, 2009). Despite the existence of several The analysis of past DT’s and their predeces- projects that are trying to bridge this valley sors is done by using a mix of performance of death within technology evolution, many attributes for each technology, which is then technologies still end up in the dust bin after evaluated by experts of the field. This leads to substantial investments. The valley of death is an insight into technology developments and the gap of funding between basic technology disruptions in the space sector. development (push technology development up The research presented here was conducted to Technology Readiness Level (TRL) 4/5) and at the German Aerospace Center in Bremen in application specific technology development cooperation with the European Space Agency (pull technology development after TRL 6/7). (ESA) within the framework of a DLR project Because of the need to overcome the valley of supported by ESA (Contract 4000101810/10/ death, there is a clear requirement for an early NL/GLC). stage identification of technologies that could significantly improve the capabilities of space Theory of Disruptive Technologies applications by disrupting the state-of-the-art. This early stage identification leads to the Over the last few years the term Disruptive nurturing and protection of the right technolo- Technology (DT) has become a buzzword in gies against the valley of death and a resulting several organizations around the world. The improvement of the capabilities of the space term, first explained by Bower and Christensen sector. This identification of potential high- (1995), describes a technology that emerges out gain technologies can be achieved by mapping of a niche market and becomes so dominant the factors that determine and influence the that it disrupts the status quo of a market and market potential of a technology. The most often leads to incumbent companies being successful technologies will be disruptive to pushed out of the market. A new technology the state-of-the-art of space technologies and is classified disruptive when, in addition to will therefore be called Disruptive Space Tech- serving a niche market, it starts to appeal to the nologies (DSTs). majority of customers in the mainstream market. The aim of this paper is to create an under- Christensen, Anthony, and Roth (2004) call standing of the underlying processes that govern this process “low-end disruption”. This event technology disruptions in the space sector. This occurs because the DT, through incremental understanding allows for an adaptation of the technology improvements, starts to deliver the theory of Disruptive Technologies (DTs) to the same (or better) performance than the previously unique market dynamics of the space sector. dominant technology while also having addi- To gain this understanding, first the theory of tional attribute(s) that are valued by the niche DTs is subjected to a critical review. Different market. When this happens, the new technology

Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 26 International Journal of Space Technology Management and Innovation, 2(2), 24-39, July-December 2012 rapidly becomes the new standard and the old performance dimensions. In this research, an technology, and the companies that exploited attempt is made to determine the change in it, are pushed out of the market. customer perceived value of a technology not A DT is an exemption to the incremental/ on along a single performance attribute change radical innovations paradigm, which Chris- (as addressed by the performance dimension tensen (1997) classifies as sustaining innova- by Christensen, 2007), or two attributes (as is tions, because companies marketing these popularized by the mapping of functional at- incremental/radical innovations continue to tributes by Adner, 2002) but rather on a mix of serve the same customers with the intention performance attributes (e.g. cost, mass, effec- of sustaining their position in the market. The tiveness, efficiency). opposite of these sustaining innovations are For this purpose, a concept under the term DTs, which are technologies that disrupt the perceived performance mix is hereby introduced market of existing technologies exploited by by the authors. It represents a mixture of the incumbent companies. In practical terms this relevant performance attributes as perceived means that incumbent companies exploiting valuable by a customer or a part of the market. a dominant technology are being disrupted This leads to the following definition: by new entrants exploiting a new technology (Carayannopoulos, 2009; Tellis, 2006). The perceived performance mix is the mix of Examples of incumbents disrupted by functional attributes of a technology as ap- new entrants are illustrated in Table 1. Table 1 peared valuable to the customer. shows the dominant technology, the Disruptive Technology introduced by a new entrant, the The alternate performance mix of a DT can disruptive attribute that constitutes the biggest fulfill a performance mix that is perceived as source of change in the perceived customer valuable by customers of the main market or by value and therefore sparked the disruption and customers of a niche market. This can either be the period of disruption. a push development (where a product is created Companies marketing technologies attempt to fulfill a performance mix not previously ad- to satisfy customer demand. The demand or dressed) or a pull development (where a product requirements for technology performance dif- is developed to meet the demand for a certain fer with every customer. In marketing literature performance mix). Regardless whether the this heterogeneity in customer demand is called new product is developed from a push or a pull customer-perceived value (Yang & Peterson, perspective, it starts disrupting an incumbents’ 2004). In innovation management literature, market. A further illustration of the concept of this customer-perceived value has been used perceived performance is given by means of the as a basis to segment markets according to the example of portable music players: customer’s assessment of the technologies

Table 1. Examples of DTs

Dominant Technology Disruptive Technology (New Period of Disruptive Attribute (Incumbent) Entrant) Disruption Workstation Personal computer Affordability 1980’s 5.25 inch disk drive 3.5 inch disk drive Size, weight (laptops) 1980’s Compact Cassette Compact Disc Sound quality, capacity 1990’s Chemical photography Digital photography Capacity, development cost 2000’s Discman Mp3 player Portability, capacity 2000’s

The music industry has been a platform dominant portable music player platform and for several disruptions over the last decades. well as a failure of the next generation sustain- Changing sound recording formats, due to able innovation of the Minidisc player. advancements in technology, have led to the This shift in the value of products as per- development of a variety of portable music play- ceived by customers is a gradual process over ers to support each format. With the introduction time, is influenced by external factors. Examples of portable mp3 players to the market in the of external factors would be a reach of basic late 1990s, the Discman (portable CD-player) functionality or functional threshold after which market has undergone a significant disruption customers become ambiguous to any further (Beaudry, 2007). This disruption was primarily improvements. This saturation of customer owed to the change of how the customers valued demand leads to a refocusing of technical per- certain performance attributes. Figure 1 illus- formance to secondary performance measures trates this change with the help of a radar chart. such as aesthetics, functionality and cost. This The image shows the performance attribute mix change in perceived value of a product is es- as it was before and after the introduction of sential for understanding of this concept and mp3 players. Sound quality used to be valued for Disruptive Technologies in general, as it is most by the customers since this was the main often the alternate performance mix that appeals advantage that the CD had over the cassette. to the customers and thus making the technol- Additionally, battery life and exchangeability of ogy disruptive and not one single performance medium were very important. With the introduc- attribute. This can be very well seen in the tion of the mp3 format, however, this changed example of the Discman: despite the fact that dramatically. Sound quality had reached a the sound quality of the CD is vastly superior level where improvements would not have led to the mp3 (Meyer, 2000), Discmans reached to noticeable differences and battery life had a point of sound quality that was satisfying become sufficient for extensive use. The result enough for the mainstream customers. People was that customers started focusing more on consequently stopped valuing the performance other attributes like capacity, exchange of music mix of the CD and turned to the performance over the internet and portability. This ultimately mix provided by the mp3 format, although led to a disruption of both the Discman as the inferior on some attributes. Because of the DT’s

Figure 1. Change in perceived performance mix of portable music players. A higher score means a better performance on this attribute. Data comes from authors’ experience and serves for illustration purposes only.

Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 28 International Journal of Space Technology Management and Innovation, 2(2), 24-39, July-December 2012 initial inferiority and differences in the per- the term Disruptive Technology has become ceived performance mix, incumbent companies highly ambiguous. Christensen himself added are often blindsided and cannot see its potential. to the ambiguity of the term by proposing to They believe that the new technology can only rename DTs into Disruptive Innovations (DIs) serve a niche market and that the majority of (Christensen & Raynor, 2003). Christensen their customers will not value its use. In fact, proposed this alteration to the theory because it is often the customers themselves that tell the a market disruption has been found to be not incumbents that they do not value the new a function of technology itself but rather of its features (Christensen, 1997). In conclusion, the changing application. By taking the example latent customer needs of technologies are often of the portable music players, it can be argued the main source of disruptions. that not the MP3 player technology but rather The theory of technology displacements the market enabled the technology to become stems from the original concept of creative disruptive. This alteration broadens the theory destruction by Schumpeter (1942). Over the to encompass all innovations and not just tech- years the concept evolved and different terms nologies, which are defined as practical applica- were added to the theory such as Technology tions of scientific knowledge (products). This Discontinuation & S-Curves (Foster, 1986), means that the theory encompasses now also Radical, Incremental, Architectural & Modular disruptive innovations, thus including process, Innovation (Henderson & Clark, 1990), Dis- paradigm and position innovations. Markides ruptive Technologies (Bower & Christensen, (2006) states that broadening the concept is a 1995), Disruptive Innovation (Christensen mistake because different kinds of innovations & Raynor, 2003). A more elaborate history have different competitive effects and produce of the evolution of the theory of technology different kinds of markets. The authors tend to displacements can be found in Figure 2 (Yu agree to this point and are therefore continuing & Hang, 2010). In recent years, the usage of to use the term DTs especially since this article

Figure 2. Evolution of disruptive technology/innovation theory with the addition of the space sector

Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Space Technology Management and Innovation, 2(2), 24-39, July-December 2012 29 focusses solely on the disruption of technologies • Sainio and Puumalainen (2007) have de- (products of the space sector). Like Markides, vised a method to measure the disruptive other researchers have also raised questions potential of a new technology; regarding the theory of DTs. Some of these • Sood and Tellis (2011) have created a model questions are listed below: for understanding and predicting DTs; • Chan Kim and Mauborgne (2005) have cre- • Is a technology inherently disruptive or ated a method for identifying new-market does disruptiveness depends on the per- disruptions. spective of the firms confronted with the technical change? (Schmidt & Druehl, Most researchers are focusing on the pre- 2008) dictability of DTs as this would be the most • How can the theory be used as a predictive beneficial to companies dealing with a potential tool? (Tellis, 2006) disruption. However, thus far no consensus has • What is the exact definition of a DT? been reached as to what a DT precisely is and (Danneels, 2004) as a logical effect, how it can be predicted. In • The theory names the creation of spin-offs fact, no evidence of any method that can ac- as a solution to deal with DTs. What and curately identify or predict the course that a when should this be done? (Danneels, 2004) disruptive technology takes has been found to • When is a DT disrupting a dominant tech- date. It seems that the theory is suffering from nology? (Danneels, 2004) the fact that the spectrum of situations classified • Can the theory be used for creating instead as disruptive is too broad as well as the fact that of identifying DTs? (Yu & Hang, 2010) creating a unified theory capable of describing disruption in a range of markets with different These gaps in the theory have become market dynamics has proven difficult. known to the researchers working in this field Because of this, researchers have begun to and many have made attempts to fill them. adapt the general theory of disruption to several Some examples are listed below: specialized fields. The following fields have adopted a customized view of how DTs diffuse • Paap and Katz (2004) utilize the theory according to their unique market dynamics: of S-Curves as a method to model the underlying factors influencing disruptive • Education (Christensen, Horn, & Johnson, innovations; 2008); • Govindarajan and Kopalle (2005) propose • Medicine (Christensen, Grossman, & a method to measure the disruptiveness of Hwang, 2009); innovations; • Military (Mitchell, 2009); • Christensen (2006) explains a method that • Gaming technology (Smith, 2007); can be used to recognize the next disruptive • Information technology (Peterson, Ander- innovations on the horizon; son, Culler, & Roscoe, 2003); • Drew (2006) uses scenario planning meth- • Space (Summerer, 2009; Summerer, 2012; ods to identify disruptive innovations at Veen, 2010). an early stage; • Adner (2006) proposes a method to identify To summarize the theory of DTs, several how the customers perceived performance articles are used that provide a description of changes as a technology evolves. This the theory. The main characteristics of a DT, method is used as an indicator for new according to Adner (2002), Gilbert (2003), disruptive threats;

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Tripsas (2008) and Govindarajan and Kopalle Space Sector Innovation (2005) are: In the previous section, the general theory on • DTs initially serve a different market DTs has been presented. In order to understand segment than the dominant technology. the mechanisms of market disruption in the Possible market segments are: space sector, as opposed to other technology ◦◦ A niche market (part of the market sectors, an analysis of the space sector is exam- with different requirements); ined by exploring specifics and peculiarities. ◦◦ A low-end market (part of the market The space sector is a high-technology sec- where customers have a lower willing- tor, which is instrumental in advancing a range ness to pay); of scientific fields (e.g. meteorology, astronomy, ◦◦ A high-end market (part of the market earth science, geodesy telemedicine). Due to where customers have a higher will- research and development efforts and the result- ingness to pay); ing innovations, the technological capabilities ◦◦ A fringe market (a market that is of the space sector are steadily increasing. In similar to the main market). practice, however, innovation in space is more • At the moment of entrance into the market, frequently incremental upon the dominant DTs have a worse performance compared technology and provides small improvements to the dominant technology in the main in the performance of a technology. According performance attribute(s). This leads to an to Summerer (2009) this is partially caused by under-appreciation by the incumbents of a risk-averse culture in the space sector, leav- the technology, which effectively facilitates ing little room for the testing of innovations in its entry into the market. When the DT starts subsystems that are not imperative for achieving maturing, however, it surpasses the domi- mission success. nant technology in terms of performance According to Tkatchova (2011), research by better fulfilling the customer needs. and development and the diffusion of innova- This happens because of its alternate mix tions within the space sector are different when of performance attributes. compared to terrestrial consumer markets. Space is an especially harsh environment, which is not From the aforementioned insights, the fol- only hard to reach but also hard for technologies lowing working definition of a DT is derived: to operate in. This creates unique constraints in the form of additional operational requirements that greatly exceed those required for terrestrial A disruptive technology is a technology that technologies. These operational requirements alters the status quo of both the market position are determined by the following environmental of the dominant technology and the competitive constraints: market layout by having an alternative per- • High-energy radiation; ceived performance mix, which is valued more • Extreme temperatures; by the customer than the one of the dominant • Large and frequent temperature variations; technology. • Micrometeoroid and orbital debris impacts; • Vacuum environment; • High g-forces during launch; • Microgravity environment;

• Limited opportunities for repairs or adjust- • Mass market - Many sellers that face ments after launch. many buyers; • Monopoly market - One seller that faces The constraints of the space environment multiple buyers; have led to strict quality requirements for space • Monopsony market - One buyer that faces technologies, since the failure of even a single multiple sellers; component could potentially lead to a mission • Oligopoly market - Few sellers that face failure. In order to maintain a high degree of multiple buyers; component reliability, the following measures • Oligopsony market - Few buyers that face are taken: multiple sellers.

• Strict testing requirements; The space sector in respect to science mis- • Proven space flight heritage requirements; sions has been characterized as a monopsony • High need for redundancy or diversity; market in which the government is the main • Strict quality assurance and quality control investor in space related technologies (Szajn- processes. farber & Weigel, 2007; Summerer, 2012). It can be argues that the military has similar dynamics An additional issue that is specifically while to commercial market resemble more an relevant to space is the low volume demand Oligopolistic market structure. for space technologies as compared to mass Finally, there is one more difference be- markets. This, combined with high launch costs tween the space market and the general mass and tight import/export and health regulations market. In the mass market, the product (or (e.g. International Traffic in Arms Regulations technology) is usually operated directly by (ITAR), Registration, Evaluation, Authori- the end user. For space technology, this is not zations of Chemicals (REACH)), make the necessarily true since, in general, most space space sector an especially hard environment technologies (for example functional telecom- for start-ups. munications satellites) are operated by satellite Furthermore, an additional specific aspect operators who, in turn, sell their services to end of the space sector is that it is governed by market users or service providers (Public Customers dynamics that are different from those of the (PC) or Institutional Customers (IC) in Figure 3). mass consumer market. The market dynamics In the scenario of telecommunications of the space sector are influenced by the actors satellites, the service providers are the real and their interaction. In general, two types of customers of the space technology (STC in customer-seller relationships exist with respect Figure 3) and the space technology utilization to technology development: the consumer and is separated from the space technology develop- the governmental demand driven markets. In ment. The result of this separation is one of the the first, the consumers’ needs are central and reasons for the barriers for adoption of new translate to specific technology requirements. space technologies and the resulting slow evo- In the second, governmental needs, which can lution of the space sectors’ capabilities. be either militarily or scientifically driven, Furthermore, it must be noted that space are central. This difference in customer-seller technology customers (especially within the interaction means that the innovation dynamics telecommunication market) are generally not in the scientific and military fields differ from very motivated to bear the risk of testing and those in the commercial field. In general, the trying out a new technologies without an exter- following market forms can be identified: nal incentive since that results in higher costs thus lower profit margins. A much preferred

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Figure 3. Key players in the space technology market

approach is to configure the space segment technology developments can be identified as in a way that changes in performance can be the technology push factor, mission specific delivered to the PC and the IC without the technology developments can be identified need of changes in the space hardware. This as the demand pull factor (Summerer, 2012). is particularly evident in the telecommunica- Especially technology push investments result tions sector where satellites can be seen, which in breakthrough technologies whereas demand were built more than 10 years ago, that are pull investments result in more incremental broadcasting the highly advanced signals of innovations (Nemet, 2009; Carayannis & Roy, High Definition television (HDTV), although 2000). This is primarily because technology HDTV did not even exist when the satellites push investments involve more fundamental were developed (this has amongst others, been research and application of novel materials enabled by turbo coding). whereas demand pull investments involve the At this point, it has been established that improvement of existing technologies or de- the space sector market structure and resulting signs. Taking this into account, the technology innovation dynamics is significantly different push area of technology development may ap- from other high-technology sectors. This leads pear to be the most interesting when it comes to to a technology development process that is also introducing DTs in the space sector. Therefore, different from other high technology sectors. in order to cultivate DTs in the space sector, it These characteristics of technology develop- seems that technology push investments have ment within the space sector are elaborated next. to be increased. However, there are two main In the space sector, a distinction can be reasons why technology push investments in made between basic technology development the space sector are impeded. and mission specific technology development. The first reason is that mature technologies When looking through the so called technol- are favored in the selection processes for tech- ogy push and demand pull models, basic nology development programs. This is because

Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Space Technology Management and Innovation, 2(2), 24-39, July-December 2012 33 the lion’s share of technology development in for the space sector providing flight heritage to the space sector is undertaken in the frame of space technologies which can later be used for a mission development program (demand pull commercial satellites. Some examples of past investments). Peculiarly, this creates an impend- DSTs which have been matured specifically ing dead-lock of technological development, for Science and Earth Observation missions at since a certain technology is only developed if it the European Space Agency are listed below: is considered to be mature enough for a mission. This problem is amplified by the fact missions • Goce: Drag compensation technology are proposed only if the scientist involved con- (Fehringer, Andre, Lamarre, & Maeusli, sider them as technologically feasible. In other 2008); words, large gaps between technological state- • Smos: Interferometric radiometry (Drink- of-the-art and technological mission demands water, Kerr, Font, & Berger, 2008); are avoided (Szajnfarber, Grindle, & Weigel, • Hershel: Silicon Carbide mirrors (Crone, 2009). This can be a hindrance to innovation Elfving, Passvogel, Pillbratt, & Tauber, as only sufficiently ambitious technological 2006); demands really drive innovation (Szajnfarber, • Gaia: Silicon Carbide structure (Douglas, Stringfellow, & Weigel, 2010). et al., 2007; Gare, Sarri, & Schmidt, 2009). The second reason is that technologies need to be tested and eventually flight-proven. Particularly interesting is the case of Silicon Flight-proving a technology is often the largest Carbide manufacturing that was first developed hurdle to take in any space technology devel- for a mirror application for Hershel, and was opment program. This is a direct result of the subsequently infused in Gaia, but for a differ- risk-averse nature of the space sector, which ent application. prevents non-conservative and innovative To further illustrate relevant aspects of technologies to be tested and flight-proven on technology development, and to get a better commercial telecommunications and navigation idea of how technology development in the missions. In fact, not being able to properly test space sector works, it is useful to analyze the and subsequently flight-prove a technology is diffusion of innovation within the space sector. the main reason why a significant amount of A popular method of visualizing technology technologies never reach full maturity. development within a certain technology sector The situation is, however, very different is the hype cycle (Fenn & Raskino, 2008). This in the context of Science and Earth Observa- method, originally developed by Gartner, can be tion missions. The customers of this part of used to map the various upcoming and mature the space sector are usually scientists, which technologies in any technology sector or domain have an ever increasing demand for new types (Fenn & Raskino, 2008). As an example, a hype of advanced space sensors. This need allows cycle with the various technologies within the them to drive mission requirement to a point propulsion and power domains of the space where using innovative less proven technologies sector is displayed in Figure 4. Note that the can become an absolute imperative. This is in graph does not display the technological ma- contrast to telecommunication satellite opera- turity, but rather the perception of the potential tors for whom the investment into new, risky (expectation) for the technology. technology does not prove to be economically In conclusion, it has been established that viable. Because of this, Science and Earth Ob- the space sector market structure and the result- servation missions can be seen as the lead users ing technology development process differs

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Figure 4. Hype cycle of the space sector. Data comes from authors’ experience and serves for illustration purposes only.

significantly from other high-technology sec- analysis of these technologies shows that space tors. This means that the characteristics of technologies are highly subject to the percep- technology disruption have to be revised for tion of performance of a customer as it is the the space sector in order to take into account case with non-space technologies. The detailed these differences. analysis and the data used are too lengthy and exceed the scope of this paper and thus, only Theory of Disruptive the results are presented here. Several examples Space Technologies of past disruptions are illustrated in Figure 5 with the help of radar charts. The example of In the previous sections, the theory of DTs and miniature satellites is chosen to illustrate low- the market dynamics of the space sector have end encroachment within the space sector. These been discussed. It was concluded that the space types of satellites are overall inferior in techni- sector is sufficiently different from terrestrial cal performance compared to regular satellites consumer markets that a reassessment of the and it is solely the unique mix of performance theory of DTs is required for the space sector. attributes that these types of satellites offer To better understand the impact, evolution (combination of functionality with low cost & and manifestation of DSTs and the path they low complexity) that appears valuable to cer- take in replacing existing technologies, several tain customers. However, as determined in the technologies that have been disruptive to the section above, the customer-seller relationship space sector in the past have been analyzed. The within the space sector is significantly differ-

Figure 5. Performance mixes of DST (blue) vs. former dominant technology (green)

ent compared to the mass consumer market. introduced by new entrants and focus less on the Because of an increased customer power and competitive market layout disruption and more the comparative small size of the space sector, on pure technology disruption. This standpoint following the disruption no major shifts were has merit especially for the space sector where observable in the competitive market layout. basic technology development is mostly the This coincides with the standpoint on DT product of institutes and research groups. presented in Schmidt & Dreuhl (2008). Ac- The past DSTs share the common charac- cording to this standpoint, the theory of DTs teristic of having a different mix of performance should relax the constraint that DTs have to be attributes compared to the dominant technolo-

Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 36 International Journal of Space Technology Management and Innovation, 2(2), 24-39, July-December 2012 gies. This allowed them to first enter a niche on the dominant technology to justify the market (for instance a specific scientific mis- increase in risk and cost when using the sion) before encroaching on the market of a new space technology; dominant technology. Because of this, the • Market characteristics: the space sector is scientific missions could be seen as the lead a complex market that is highly influenced users of the space sector. While the over-per- by governmental entities. Development formance on a mix of performance attributes and usage of a technology is often linked is a characteristic DSTs share with DTs, the to political motives, national industrial following differences between the two can be policy, and other social aspects. observed: When analyzing innovation literature and • Development time: The development the theory of DTs, a resemblance can be found of a space technology takes a long time between radical innovations and DSTs. Both are and, therefore, the response time of the explorations of new technologies and replace incumbents to DSTs is high. They have the dominant technologies. Additionally, they both opportunity to either start a development offer a higher performance on the perceived process of their own (if the development performance mix compared to the dominant time permits it) or take over the company technology. The key difference between these marketing the new technology. Either way, theories is that DSTs do this in an unexpected the incumbents are unlikely to be pushed way or, in other words, by over performing on out of the market by a DST; an alternative performance mix, which is valued • Flight heritage: A dominant space tech- by customers of a niche market. This means nology already has a long flight heritage. that the disruption of technologies is mostly A new space technology candidate must governed by market factors rather than tech- deliver a very significant improvement nical performance superiority. It is the market

Figure 6. Aggregation level pyramid with respect to radical innovation within the space sector. SoS = System of Systems

Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Space Technology Management and Innovation, 2(2), 24-39, July-December 2012 37 that changes in an unexpected way and thereby lower cost and higher performance increases facilitates the disruption of the state-of-the-art the utilization of space for commercial ventures technology by a DST. The insights mentioned such as earth observation, telecommunication above lead to the following definition of a DST: & navigation while possibly opening it up to new ventures such as space tourism, space A Disruptive Space Technology is a technol- based solar power and asteroid mining. This ogy that radically changes the status quo paper intends to contribute to the process of of the space sector by having an alternative space innovation by helping decision makers perceived performance mix, which fulfills the with the identification of future DSTs. user’s technology requirements better than the dominant technology. REFERENCES It is important to note that also many Adner, R. (2002). When are technologies disruptive? ambiguous terms have been used to classify A demand-based view of the emergence of competi- disruptive, discontinuous or radical innovations tion. Strategic Management Journal, 23(8), 667–688. within the space sector. For example, within doi:10.1002/smj.246 the European space sector, the term Disrup- Adner, R. (2006). Match your innovation strategy tive Technologies is predominant while in the to your innovation ecosystem. Harvard Business US the term Game Changing Technology is Review, 84(4), 98–107. prevalent. Additionally, the term Breakthrough Beaudry, D. N. (2007). The effects of technology Discoveries seems to be the leading term for convergence on markets. In Proceedings of the Dy- basic technologies such as materials and fun- namics of Globalization - AIB US-Northeast Chapter damental physics. Because of this, it would Meeting, Portsmouth, NH. be useful to have a structure of classification Bower, J. L., & Christensen, C. M. (1995). Disruptive that fits the existing terminologies as close as technologies: Catching the wave. Harvard Business possible. Such a structure of classification of Review, 43–53. technology replacement is proposed in Figure 6. Carayannis, E. G., & Roy, R. I. (2000). Davids vs Goliaths in the small satellite industry: The role of technological innovation dynamics in firm competi- CONCLUSION tiveness. Technovation, 20(6), 287–297. doi:10.1016/ S0166-4972(99)00137-6 Since its conception, the space sector has relied heavily on governmental contributions Carayannopoulos, S. (2009). How technology- for funding of technology developments. In based new firms leverage newness and smallness to commercialize disruptive technologies. Entre- this respect, the space sector is somewhat of preneurship Theory and Practice, 33(2), 419–438. a late bloomer seeing as other historical high doi:10.1111/j.1540-6520.2009.00297.x tech industries such as the railroad industry, the terrestrial telecommunications industry, Christensen, C. M. (1997). The innovator’s dilemma: When new technologies cause great firms to fail. the aircraft industry and computer industry Boston, MA: Harvard Business School Press. all required an initial government investment before it was feasible for commercialization to Christensen, C. M. (2006). The ongoing process of building a theory of disruption. Journal of Product occur. The space sector has not gone through Innovation Management, 23(1), 39–55. doi:10.1111/ this commercialization process yet, but it is j.1540-5885.2005.00180.x possible, if more is invested in the development of technologies with a high disruptive Christensen, C. M., Anthony, S. D., & Roth, E. A. (2004). Seeing what’s next. Boston, MA: Harvard potential. This would lead to a future where Business School Publishing.

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