The information age is in full swing in 2025. Access to larger volumes of data have changed the market structure across nearly every industry and there are no signs of these trends slowing down. All the while, this is opening up new approaches to research and development whether in the lifesciences, advanced manufacturing or beyond. Here we will discuss how the UK can put its own industry on the cutting edge and seize the future.
There is a large volume of research on how technology is categorised across every sector. However, there are remarkably few attempts to provide a high-level taxonomy across all technology sectors, and even less tackling the problem from a commercialisation perspective. To understand technology in emerging markets, a generalised approach is required. One that can provide understanding while the final structure of the market is still an open question.
The Research and Development Society utilises the Triple Chasm 9-layer model to categorise the components of vector I3 that make up a product or service model in combination with the classification of technologies as either pervasive, focused or hybrid. This framework allows the broader industry to understand the impact new innovations can have on a market and how companies can understand the value of their intellectual property, products, services and broader data.
As the Triple Chasm Model outlines, many of the new business models accessible to UK SMEs are built on the back of new hybrid technologies. However, when understanding emergent market spaces, it is important to begin by understanding the impact of pervasive technologies. These technologies create waves across all market spaces and allow new players to rapidly emerge and displace the existing hegemonic firms when leveraged effectively. The invention of the World Wide Web, the transistor and today new generative AI models are all examples of this phenomenon. Amazon, TSMC and, perhaps OpenAI today, have all embedded themselves as lynchpins in new market structures built around the pervasive technologies they are built on.
Focused technologies, like mobile phones, electric vehicles and new gene editing techniques similarly provide opportunities for new firms but they do not produce the same breadth of impact. While mobile devices completely rearranged the telecoms industry, the automotive sector remained unchanged. The new market structures that emerge from both pervasive and focused technologies create vast new expanses to play in. It is in this realm that hybrid technologies are built into new products and services.
What can governments and industry policymakers draw from this framework? The technologies we choose to back now will determine how our science and technology industries are positioned for decades to come. Heavily supporting pervasive and focused technologies can help well positioned companies carve out vast swathes of the market and embed themselves as lynchpins in the new ecosystems should they be ahead of the curve. The market impact of quantum technologies and personalised medicine are yet to fully manifest and with the right support the UK can seize leverage on an international scale. Unfortunately, the unknown nature of emergent technologies means this outcome is never guaranteed. The UK semiconductor industry failed to capture the production of integrated circuits in the same manner as Japan, Taiwan or the USA. Fortunately, the creation of a new industry allowed numerous other business models to be integrated into the development of the final product. Arm Holdings found their niche in the deployment of hybrid technologies. Their expertise and design tools allowed them to find success and prevent the UK from becoming a bystander to the industry.
A similar situation can be found in the AI sector and, more relevant to our focus, the drone sector. Large players in the US & China are already competing to provide the pervasive technologies that the future AI market will be built around and existing corporates alongside new players in countries like Turkey have a head start on providing large scale production of military UAVs.
How can UK firms understand the different components of their own product/service that can contribute to their overall business model? Here the 9-layer model provides a useful framework. Any complete drone product consists of an assembly of platforms with a broad range of applications. Energy storage devices, propulsion systems and flight control units form the core components, but a network of additional applications and service offerings are built around the product. Data and/or meta-data accumulate at every level. Any technology-oriented firm should begin by identifying the relevant components and technologies present in their product. No firm will control every element on this grid but through assessing the ownership of each, they can identify partners, as well as additional resources that can be leveraged in their business model.
9-Layer Model Drone Elements
Some of these components will be best left to 3rd party suppliers & services; others will be developed in house or in partnership agreements. As any company develops their business model, they will need to understand which of these elements they outsource and which they will develop in house. From this they can develop a complete product and service definition profile to support their prioritisation.
Example Product and Service Definition Profile
Above is the profile of a drone manufacturer with a portfolio of several products. Given their focus on integrated platforms, the majority of their components are purchased from third parties as displayed by the low scores marked for their base & application technologies. Their platforms, applications and tools however display far higher relevance.
New technologies developed and harnessed in the UK will create opportunities for growth wherever they surface. How does the UK ensure that the benefits remain within the nation and support communities where the benefits are needed most? Join us next week where we will discuss how we spread prosperity, within the UK and across the regions.