exponential change: what drives it? what does it tell us about the future?
DESCRIPTION
These slides show how “exponential improvements” in a small number of technologies are driving most of the changes in the world, they explain the sources of these exponential improvements, and they show how we can use an understanding of these exponential improvements to think about the future. In spite of the wide spread belief that change is everywhere, most changes can be attributed to exponential improvements in a small number of technologies such as integrated circuits, magnetic storage, and fiber optics. The sources of these exponential improvements are the fact that these technologies benefit from reductions in “scale” (while others benefit from increases in scale). For example, smaller feature sizes enable faster, cheaper, and lower power ICs. More importantly, we can use an understanding of “scaling” to show how some biological, mechanical, and other phenomenon also benefit from reductions in scale. This suggests that we can expect rapid improvements in some types of bio-electronic ICs, micro-electronic mechanical systems (MEMS), and nano-technology. Similar arguments are made for systems that are constructed from such “components” and for technologies that benefit from increases in scale.TRANSCRIPT
Exponential Change:
What Drives It?
What Does it Tell us About the Future?
Jeffrey Funk
Associate Professor
Division of Engineering & Technology Management
National University of Singapore
Mail: [email protected]
These slides summarize ideas that are described in a forthcoming book from Stanford University Press (Technology
Change and the Rise of New Industries) and taught in a graduate course entitled ―Analyzing Hi-Tech Opportunities.‖
Other slides on my slideshare account provide more details on these ideas and the application of these ideas to
various new technologies.
Change is Seemingly Everywhere…….
• Products and services
– New ones continually appear
• Firms
– New ones are formed
– Existing firms exit a business, are acquired or go
bankrupt
• Governments
– New ones including new political systems and new
countries continuously emerge
Many Drivers of this Change
• Market based economy and supporting institutions
– Smoother functioning financial, insurance, and regulatory
systems facilitate the emergence of new products and
services and the formation of new firms
• Better methods of communication
– From postal mail services to the printing press,
telegraph, telephone, and now the Internet
– They speed up flow of information and thus promote new
ideas, technologies, strategies, policies, and even
political change
• For example, recent political upheavals in the Middle East are
partly due to new communication mediums such as Facebook
and Twitter
However……………..(1)
• However, a smoother functioning market economy
and better communication technologies are clearly
not the whole story
• Both of them only indirectly lead to better products
and services, and they do this only when better
techniques/technologies are available
– Without better techniques, an improved ability to
commercialize or communicate would be meaningless
– Furthermore, better communication technologies are
clearly based on new technologies
• For Internet, it is the low cost of uploading and downloading vast
amounts of data that makes internet so powerful
However……………..(2)
• But why have these communication technologies
experienced such rapid improvements, while many
other technologies have not?
• Doubling in the performance of communication and
other electronic-based technologies every one to
two years is often termed “exponential”
• In contrast to “linear” improvements
– doubling in performance of communication technologies
every one to two years has over decades led to many
orders of magnitude improvements
– Understanding why some technologies experience such
exponential change while others do not is essential to
thinking about the future
•
Outline
• What technologies are experiencing large changes
and in particular exponential improvements?
• What drives these Improvements?
– Existing theories on technological change do not help us
– My approach to technological change
• What do these exponential improvements (and
their sources) tell us about the future?
– Integrated circuits (ICs) and electronic systems
– Bio-electronics, Micro-electronic mechanical systems
– Telecommunications,
– Lighting and displays, Solar cells
What technologies are experiencing large
changes and in particular exponential
improvements?
• In homes and offices – primarily computers, other
electronic products, telecommunication and the
Internet
• In transportation – primarily electronic controls
• In factories
– many new processes for ICs, LCDs, other electronics
– but mostly use of electronic controls and IT
• In hospitals
– many new medical equipment, but mostly improvements
in electronics for imaging and other diagnostic devices
In Other Words, Large Changes are
Restricted to a Few Places
• Exponential improvements in integrated circuits (ICs)
and magnetic storage are driving many changes
– these improvements enable new/better electronic systems
– many of these new systems directly provide us with value
or indirectly provide us with more wealth
• This wealth enables us to acquire things whose costs
& performance not experiencing rapid improvements
– bigger and better houses and automobiles
– better vacations and many other things
– These slides are primarily concerned with drivers of
exponential improvements
Outline
• What technologies are experiencing large changes
and in particular exponential improvements?
• What drives these improvements?
– Existing theories on technological change do not help us
– My approach to technological change
• What do these exponential Improvements (and
their sources) tell us about the future?
– Integrated circuits (ICs) and electronic systems
– Bio-electronics, Micro-electronic mechanical systems
– Telecommunications,
– Lighting and displays, Clean energy
Cumulative Production Drives Cost
Reductions
• Costs fall as cumulative production grows in learning or experience curve as automated manufacturing equipment is
– introduced and organized into flow lines
• Implications: stimulating demand will lead to cost reductions. This is one reason why many governments subsidize the introduction of clean energy more than they subsidize R&D spending
• Clayton Christensen’s theory of disruptive innovation also implies that increases in demand will lead to reductions in cost and improvements in performance
Christensen’s
theory of
disruptive
innovation implies
that performance
improvements
automatically
emerge once
demand for a low-
end innovation
emerges
Problems with Learning Curve
• Can’t use learning curve until production has begun
• Learning curve assumes all components unique to a new product
• Learning curve doesn’t explain why some technologies experience more improvements in cost and performance than do others
• An emphasis on cumulative production
– focuses analyses on the production of the final product
– implies that learning done outside of a factory is either unimportant or is being driven by the production of the final product
• But many cost reductions or performance improvements are the result of activities done outside of the factory
– advances in technology or science done in laboratories
– reductions in scale (e.g., ICs) or increases in scale (e.g., oil tankers)
– improvements in complementary technologies such as components whose demand are being driven by other systems
Consider Computers (and other electronic products)
• Conventional wisdom: costs fall as volumes increase….
• Reality
– Cost of computers dropped for same reasons that their performance rose: rapid improvements in ICs
– Improvements in ICs only partly came from introduction of automation
– Bigger reason was large reductions in scale of transistors, memory cells, and other dimensional features
– Reductions in scale required new manufacturing equipment
• depended on advances in technologies and science
• were largely developed outside of high-volume production facilities
– Rate of implementation depended more on calendar time (think of Moore’s Law) than on cumulative production volumes
Cost reductions aren’t being driven by
falling assembly costs Total bill of materials: 172.46
Manufacturing/assembly costs 6.50
Total 178.96
Source: //gigaom.com/apple/iphone-3gs-hardware-cost-
breakdown/
Consider Clean Energy
• Conventional Wisdom
– Costs fall as more electric vehicles, wind turbines, and
solar cells are produced
• Reality
– Electric vehicles: batteries are key technology and their
energy density depends on finding more appropriate
materials
– Wind turbines: costs fall as scale of turbines are increased
– Solar cells: costs per ―peak watt‖ fall as engineers and
scientists increase efficiencies, reduce material thicknesses,
and increase scale of substrates and production equipment
As Bill Gates said in 2010 interview
• ―The irony is that if you actually look at the amount of money that’s been spent on feed-in tariffs and you properly account for it — tax credits, feed-in credits in Spain, solar photovoltaic stuff in Germany — the world has spent a massive amount of money which, in terms of creating both jobs and knowledge, would have been far better spent on energy research.‖ He also argues that funding theses supply-side approaches would require very little money. ―I was stunned, when I did the work with the AEIC (American Energy Innovation Council), to see that if you wanted the U.S. energy industry as a whole to fund this R&D, you’d only have to tax energy 1 percent(1).‖
• (1) See Jason Pontin’s interview of Bill Gates in Technology Review, Q&A: Bill Gates, The cofounder of Microsoft talks energy, philanthropy and management style, August 24, 2010, http://www.technologyreview.com/energy/26112/page1/, accessed on August 26, 2010
Models are Important
• They encourage you to look in certain places
• But if the models are wrong, they encourage you to
look in the wrong places
• The learning curve suggests that
– Reductions in costs primarily come from activities done in
production facilities
– Thus, we should
• increase volumes of the final product
• subsidize the final product in order to experience increased
volumes
– In reality, technological change is much more complex
Time
Performance
Another Theory: New Technologies Experience Dramatic
improvements in Performance and Price Following
Emergence of New Technology
Emergence of New Technology
The Data Doesn’t Support Notion of
Dramatic Improvements
• Data suggests there are smooth rates of improvements that can be characterized as incremental in nature over multiple generations of technologies
• These rates of improvements depend on the technology and the science that forms the basis of the technology
• These incremental improvements enable one to roughly understand near-term trends in performance and/or price/cost for new technologies.
Models are Important
• They encourage you to look in certain places
• But if the models are wrong, they encourage you to look
in the wrong places
• The theory of ―dramatic improvements in performance
emerge following emergence of new technology‖
suggests that
– rates of improvement have nothing to do with characteristics
of technology or the science that forms basis of technology
– thus, we can say anything we want about the future
performance of a new technology!
• Particularly if we combine this theory of other theories
One Combination of Theories
• A low-end innovation will displace the existing technology and become a disruptive innovation because
– learning curve says increases in demand lead to increases in cumulative production and thus reductions in cost
– theory of ―dramatic improvements‖ says these improvements will be initially very rapid, faster than previous technology
• Thus
– a low-end innovation will experience rapid improvements and the low-end innovation will displace the dominant technology
– And thus
• The challenge is to find a low-end innovation
• One that has inferior performance, fewer features, or that is smaller
• Don’t fall into the trap of simple theories that don’t make scientific or engineering sense
Reality is much more complex & interesting
• Certain technologies have the potential for greater improvements in performance and cost than do other technologies
• Understanding why some technologies have more potential than do other technologies is essential for thinking about the future
• These technologies are more likely to displace the dominant technology than are other technologies
• Of course this displacement also depends on the relative importance that users place on price, features, and different dimensions of performance
Outline
• What technologies are experiencing large changes
and in particular exponential improvements?
• What Drives these Improvements?
– Existing theories on technological change do not help us
– My approach to technological change (summarized in
forthcoming book from Stanford University Press,
Technology Change and the Rise of New Industries)
• What do these Exponential Improvements (and
their sources) tell us about the Future?
– Integrated circuits (ICs) and electronic systems
– Bio-electronics, Micro-electronic mechanical systems
– Telecommunications, Lighting and displays, Solar cells
Technology Paradigm
• 1) a technology’s basic concepts or principles and
the tradeoffs that are defined by these concepts
or principles
• 2) the directions of advance within these tradeoffs
where these advances are defined by a
technological trajectory(s)
• 3) the potential limits to these trajectories and
their paradigms
• 4) the roles of components and scientific
knowledge in these limits
Focusing on Direction of
Advance/Technological Trajectory
• 1) improving the efficiency by which basic concepts and
their underlying physical phenomena are exploited (e.g.,
finding materials that better exploit a physical phenomenon)
• 2) radical new processes
• 3) geometric scaling: Some technologies experience
improvements as they are made
– smaller: features on integrated circuits (ICs), storage regions in
magnetic platters or tape
– larger: production and transportation equipment, engines
• 4) improvements in “key” components (ICs) drive
improvements in systems (e.g., computers) even before the
system has been introduced
Directions of Advance/Methods of
Improvement (1)
• Increase efficiencies by which a technology
exploits a physical phenomenon
– Efficiency of engines, etc.
– These improvements often require new materials that
better exploit a physical phenomena
• Batteries
• Lasers
• LEDs
• Lights
• Solar cells
• Transistors
Fig. 2.3. Improvements in Energy Storage Density for Various Technologies Including
Chemical Batteries
Source: Koh and Magee, 2008
Thermal, Propulsive, Overall Efficiencies of Jet Engines
Luminosity per watt of
lights and displays
Organic
Transistors
For these and other Technologies
• At what rate is efficiency being improved?
• When might these improvements lead to a superior value proposition for – some set of users?
– most users?
• What are the potential/limits (if any) for improvements in efficiency, e.g., can new materials that better exploit a specific physical phenomenon still be found?
• Are there complementary technologies that are needed for these improvements?
• As an aside, what are the policies or strategies that will – promote these improvements?
– help us find and exploit these markets?
Outline
• What technologies are experiencing large changes
and in particular exponential improvements?
• What Drives these Improvements?
– Existing theories on technological change do not help us
– My approach to technological change
• Improving the efficiency by which…..
• Geometric scaling
• Improvements in key components
• What do these Exponential Improvements (and
their sources) tell us about the Future?
Geometric Scaling (1)
• Definition – refers to relationship between geometry of technology, the scale
of it, and the physical laws that govern it
– “scale effects are permanently embedded in the geometry and the physical nature of the world in which we live” (Lipsey et al, 2005)
• Studied by some engineers (and biologists), but only within their discipline – chemical engineers: chemical plants (many references)
– mechanical engineers: engines, tankers, aircraft (fewer)
– electrical engineers: ICs, magnetic and optical storage (many)
• But very few analyses for engineering in general by either – engineers
– management professors
– economists
Geometric Scaling (2)
• For technologies that benefit from larger scale
– output is roughly proportional to one dimension (e.g., length cubed or volume) more than is the costs (e.g., length squared or area) thus causing output to rise faster than do costs, as the scale of technology is increased
• Examples
– Some types of production equipment, particularly ones used for
• chemicals, basic materials
• semiconductor wafers, LCDs, and solar cells
– Engines
• Steam, internal combustion, and jet engine; also steam turbine
– Transportation equipment
• buses, planes
• oil tankers, freighters
Example of Benefits of Larger Scale: Engines
Diameter of cylinder (D)
Cost of cylinder
or piston is function
of cylinder’s surface
area (πDH)
Output of engine
is function of
cylinder’s
volume (πD2H/4)
Result: output rises
faster than costs as
diameter is increased
Height
of
cylinder
(H)
Geometric Scaling (3)
• For technologies that benefit from smaller scale, the benefits can be particularly large, since
• costs of material, equipment, factory, and transportation typically fall over long term as size is reduced
• but performance of only some technologies such as ICs and magnetic storage experience increases in some aspects of performance as size is reduced
• placing more transistors or magnetic or optical storage regions in a certain area can increase speed and functionality and reduce both power consumption and size of final product
Figure 2. Declining Feature Size
0.001
0.01
0.1
1
10
100
1960 1965 1970 1975 1980 1985 1990 1995 2000
Year
Mic
rom
ete
rs (
Mic
rons)
Gate Oxide
Thickness
Junction Depth
Feature length
Source: (O'Neil, 2003)
Why do disk drives
experience improvements in
capacity?
What drove these improvements
and in particular which markets
for disk drives drove these
improvements?
Are these large (or small)
improvements in capacity?
How many other products
experience such large
improvements?
HDD: Hard
Disk Drives
Areal
Recording
Density of
Hard Disks
HDD: Hard
Disk Drives
Outline
• What technologies are experiencing change and in
particular exponential improvements?
• What Drives these Improvements?
– Existing theories on technological change do not help us
– My approach to technological change
• Improving the efficiency by which…..
• Geometric scaling
• Improvements in key components
• What do these Exponential Improvements (and
their sources) Tell us about the Future?
Components and Systems (1)
• Some components have a large impact on
performance of a system
• Components that have a large impact on system
performance and are undergoing large
improvements can
– have a large impact on performance and cost of
systems, even before system is implemented
– lead to changes in relative importance of cost and
performance and between various dimensions of
performance
– lead to discontinuities in systems
Components and Systems (2)
• Improvements in engines impacted on
– Locomotives, Ships
– Automobiles, Aircraft
• Improvements in ICs (magnetic platters)
impacted on
– computers, servers, routers, telecommunication
systems and the Internet
– radios, televisions, recording devices, and other
consumer electronics
– mobile phones and other handheld devices
– controls for many mechanical products
– Imaging systems for health care
For these and other Technologies
• What is the minimum level of performance in a component (such as an IC) that might enable a new electronic system to offer a superior value proposition in for example,
– Gesture and neural-based human-computer interfaces?
– Cognitive radio for mobile phone systems?
– Autonomous vehicles?
• When the concepts and principles that form the basis for a new system are relatively well known, components are often the bottleneck for new systems – This is the case for many technologies
Outline
• What technologies are experiencing large changes
and in particular exponential improvements?
• What drives these Improvements?
• What do these exponential Improvements (and
their sources) tell us about the future?
– Integrated circuits (ICs) and electronic systems
– Bio-electronics
– Micro-electronic mechanical systems (MEMS)
– Telecommunications
– Lighting and displays
– Clean energy
Improvements in ICs (also displays, disk drives)
Make New Kinds of Computers Possible
• Smaller and cheaper computers
– Cheaper tablet computers
– RFID (radio frequency identification) tags
– Networks of smart dust
• New interfaces
– Natural User Interfaces: Speech, touch, gesture
– Neural Interfaces: brain signals measured with electrodes
• New Internet content and applications
– Recognition/authorization systems: fingerprint, facial
recognition, retinal scan, voice recognition
– Surveillance systems
Similar Arguments can be Made for other
Electronic Systems
• Mobile phones and other portable devices
• Servers, routers, and much of the Internet
• Video game consoles (and other simulators)
• Set-top boxes and much of cable TV systems
• Automated algorithmic trading of stocks, etc. by for
example hedge funds
• To some extent, better control over machinery,
production systems, mechanical products
• Autonomous vehicles
• New imaging systems for health care
But Can Moore’s Law be Sustained?
• Three dimensional ICs may be needed
– 3D wafer level integration concept
– 3D TSV (through silicon via) silicon interposer concept
• Or new forms of transistors/memory cells
– Magnetic random access
– Phase change memory
– Organic transistors and memristers
– Molecular and atomic transistors
Outline
• What technologies are experiencing large changes
and in particular exponential improvements?
• What drives these Improvements?
• What do these exponential Improvements (and
their sources) tell us about the Future?
– Integrated circuits (ICs) and electronic systems
– Bio-electronics
– Micro-electronic mechanical systems (MEMS)
– Telecommunications
– Lighting and displays
– Clean energy
Bio-Electronics Benefit from Reductions in Feature Size
just as ICs have – Expect exponential improvements in them
Benefits of Reductions in Feature Sizes
Higher Resolution
Resolution depends on size of sensor: So reductions in feature size increase performance of bio-electronic chips since they
increase resolution of sensors, decrease amount of fluids, and increase speeds
Reductions in Feature Size Enable Bio-Electronic ICs to
Analyze Smaller Biological Materials
Improvements in Bio-Electronics is Leading to
Improvements in Many Systems
• Point-of-care diagnostics
– analyzing blood and other samples by nurses or patients
• Drug-discovery
– sequence the DNA of for example a target protein
– synthesize drugs that act on such a target
• Drug delivery
• administer drugs to specific places in a person’s body
• nano-particles that destroy cancer cells like a smart bomb
• Chips embedded in
– Clothing or body (e.g., prosthetics or artificial organs)
Just one example: smaller feature sizes drives
reductions in cost of sequencing DNA and Human Genome
Outline
• What technologies are experiencing large changes
and in particular exponential improvements?
• What Drives these Improvements?
• What do these Exponential Improvements (and
their sources) tell us about the Future?
– Integrated circuits (ICs) and electronic systems
– Bio-electronics
– Micro-electronic mechanical systems (MEMS)
– Telecommunications
– Lighting and displays
– Clean energy
Ratchet Mechanism Actuator Torsional Acutator
Early Optical Switch Clutch Mechanism Anti-reverse
mechanism
http://www.memx.com/
Source: Clark Ngyuen, August and September 2011 Berkeley lectures
Source: Clark Ngyuen, August and September 2011 Berkeley lectures
Source: Clark Ngyuen, August and September 2011 Berkeley lectures
Accelerometer
Smaller feature sizes also lead to more mechanical &
electronic components
Evolution of Silicon-Based Photonics in Parallel with
Improvements in Si-Based ICs:
For the most part, both benefit from reductions in scale
Can we make all optical devices on a Silicon Chip?
But we still need a silicon laser!
Outline
• What technologies are experiencing large changes
and in particular exponential improvements?
• What drives these Improvements?
• What do these exponential Improvements (and
their sources) tell us about the Future?
– Integrated circuits (ICs) and electronic systems
– Bio-electronics
– Micro-electronic mechanical systems (MEMS)
– Telecommunications
– Lighting and displays
– Clean energy
Photonics
• Fiber optic telecommunication systems are
primarily made from photonic devices
– Converting signals from electronics (ICs in routers and
servers) to photonics (i.e., light) is becoming bottleneck
– Replacing ICs and IC-based computers with photonics
is difficult without silicon laser
• For computers, as speed of ICs improves,
bottleneck moves to interconnect
– Can we use photonics for first connecting boards and
second for connecting chips on a board?
– Third, use photonics for active elements
(High Performance Computing Systems)
Flo
atin
g p
oin
t op
era
tion
s p
er s
eco
nd
ICs and Wireless Systems
• Improvements in ICs are primary drivers of
improvements in wireless systems
• They enabled use of cellular systems and
move from analog to digital and now to
newer digital systems
• They also enable better phones as do
improvements in displays
Source: Bochum and Gonzalez,
Embedded Multicore Processing for
Mobile Communication Systems
Another Way to Look at How Improved
ICs Enable New Systems
Source: The Progress in Wireless Data Transport and its Role in the Evolving Internet, Mario Amaya and Chris Magee
(kilo
bits p
er
secon
d)
Improvements in ICs have been the primary driver of
improvements in wireless speeds
0.1
1
10
100
1000
10000
1975 1980 1985 1990 1995 2000 2005 2010
Spee
d (
Mbp
s)
Figure 2.6 Data Rates Over Time for Selected Technologies
Ethernet
USB WPAN
Source: Trend Report from
International Solid State Circuits
WLAN WLAN: Wireless local area networking
WPAN: Wireless personal area
Improvements in ICs have also been the primary driver of
improvements in new types of wireless system (along with
copper-based Ethernet)
Are There Limits to Data Speeds?
• Improvements are limited by Shannon’s Law:
C=B*log(1+S/N)
– C = information capacity (bits per second)
– B = bandwidth; S = signal power; N = noise
• In theory, gamma rays, which oscillate at 1024
Hz, can provide kind of bandwidth that is needed
to continue making improvements
• However, to modulate at this frequency, must
sample waveform at twice that rate and ICs/
MEMS might not be available for many years
– Could a one nanometer mechanical resonator (type of
MEMS) provide 1015 bits per second?
Outline
• What technologies are experiencing large changes
and in particular exponential improvements?
• What Drives these Improvements?
• What do these Exponential Improvements (and
their sources) tell us about the Future?
– Integrated circuits (ICs) and electronic systems
– Bio-electronics
– Micro-electronic mechanical systems (MEMS)
– Telecommunications
– Lighting and displays
– Clean energy
LEDs already have higher Luminosity per Watt (lm/W) than do fluorescent lights
Source: Lumileds/Philips
OLEDs (Organic Light Emitting Diodes) will also soon have
higher luminosities per Watt
LEDs and OLEDs are also Impacting
on Displays
• LEDs are replacing cold fluorescent tubes as
backlights for LCDs (Liquid Crystal Displays)
• OLEDs are starting to replace LCDs
– More vivid colors and cheaper manufacturing processes
– But still shorter life-spans
• In the meantime,
– LCDs continue to get cheaper and better partly because
they benefit from increases in the scale of LCD
substrates and production equipment
– Improvements in frame rate and pixel density make 3D
television more economically feasible
Increases in LCD Substrate Size have led to reductions in cost
Source: www.lcd-tv-reviews.com/pages/fabricating_tft_lcd.php
Larger substrate sizes lead to lower capital costs for LCD
production equipment
Improvements in LCD Frame Rate Increase the
Economic Feasibility of Time Sequential 3D
• Improvement in LCD response
time enable:
– High frame-rate in LCD display
and in active 3D glasses
• Economical
– Estimated cost of adding 3D to
LCD display range from 10% to
30% the cost of panel
– Falling costs from larger substrate
size can offset these higher costs
• But glasses are a big
disadvantage……….
• Improvements in photolithographic equipment enable
increases in pixel density
– lags resolution in ICs by many years
• improvements of about 4 times
occur every 3 years
• These increases in pixel density enable
– high definition television
– auto-stereoscopic 3D television in which
different pixels are assigned to right and
left eyes and to different “viewing” zones
Increases in Pixel Density Eliminate Need for
Glasses
Outline
• What technologies are experiencing large changes
and in particular exponential improvements?
• What Drives these Improvements?
• What do these Exponential Improvements (and
their sources) tell us about the Future?
– Integrated circuits (ICs) and electronic systems
– Bio-electronics
– Micro-electronic mechanical systems (MEMS)
– Telecommunications
– Lighting and displays
– Clean energy: solar cells and wind turbines
0.5
1
1.5
2
2009 2010 2011 2012 2013 2014 2015
Micro (Poly) Crystalline Silicon
Cost (USD) per Peak Watt of Solar Cells
is Dropping Fast Cadmium Indium Gallium Selenide (CIGS – thin film)
Source: Lux Research (2011)
Thin
Film Silicon
Cadmium Telluride (thin film)
Technology Production
Facilities
Labora-
tories
Theoretical
Limits
Three Junction Cell with
Concentrators
25% 42% 63%
Two Junction Amorphous and
Microcrystalline Silicon Cell
22% 32%
Crystalline Silicon 18% 25% 29%
Micro-crystalline silicon 14% 20% 29%
Cadmium-Indium Gallium Selenide
(CIGS)
11% 20% 29%
Cadmium Telluride (CdTe) 11% 17% 29%
Amorphous Silicon 8% 13% 20%
Organic Cells 2% 8% 31%
Dye-Sensitized Cells 12% 31%
One Reason is that Improvements in Efficiencies are Still
Being Made, Particularly to Thin-Film Solar Cells
A Second Reason is that there are benefits from increasing the scale
of substrates and production equipment, as with LCDs: Expected
benefits from Increases in size of substrate and production Equipment
Source: (Funk, 2012). for Substrate Size: (Signet Solar, 2007)
Technology Substrate
Size
(square
meters)
Current
Equivalent
Generation
of LCD
Equipment
Ratio of
Generation VIII
to Current
Generation in
terms of Capital
Costs Per Area
Expected Cost (USD) per Peak
Watt if Generation VIII was/is
Implemented
In 2011 In 2015
Crystalline
Silicon
5.7 VIII 1.0 $1.27 $0.95
CIGS 0.72 V 0.64 $0.74 $0.51
Cadmium
Teluride (CdTe)
0.72 IV 0.29 $0.20 $0.16
Amorphous
Silicon
1.43 IV 0.29 $0.33 $0.15
Wind Turbines also Benefit from Increases
in Scale
• Theoretical output is a function of
– Turbine-blade-diameter squared
– Wind-speed cubed
• Empirical data shows that
– Cost of wind turbine blade per output falls as diameter
increases
• Particularly for under 50 meters
• Over 50 meters, the benefits from increases in scale fall;
better materials are needed
– Maximum wind speed rises as diameter increases
– Output rises faster than do costs as tower size is
increased
Summary (1)
• Technologies that experience rapid (i.e.,
exponential) improvements in performance and
cost have a large impact on our lives
– they are more likely to become economically feasible
(or to cause systems constructed from them to become
feasible) than are other technologies
• Drivers of exponential improvements
– improving the efficiency by which basic concepts and
their underlying physical phenomena are exploited
(e.g., finding materials that better exploit a physical
phenomenon)
– geometrical scaling
– improvements in components
Summary (2)
• We (including students) can analyze these
improvements to find new technologies that
might be economically feasible in the near future
• For universities, we need to help students
understand when a new technology might be
economically feasible in order for them to
– create new businesses
– understand limitations of proposed solutions to global
problems and come up with better solutions
Summary (3)
• Students should only develop strategies and
policies for technologies that have a potential to
become economically feasible for some if not
many users
• Appropriate strategies and policies also depend
on the way in which the technology is
experiencing improvements in performance and
cost
For more information
• These slides summarize ideas that are
– described in a forthcoming book from Stanford University
Press entitled ―Technology Change and the Rise of New
Industries‖
– used in a course entitled ―Analyzing Hi-Tech Opportunities‖
• Complementary slides can be found on slideshare
– http://www.slideshare.net/Funk98/presentations
– http://www.slideshare.net/funk97/presentations