Technology segmentation will focus a company’s R&D and business direction

Setting the right business goals and research focus is one of the key drivers of a profitable business. To achieve this, a proper understanding of a technology domain is essential. A single domain comprises many sub-categories. Understanding the whole domain can be a tedious task if a systematic approach is not followed.

One such systematic approach is known as technology segmentation. It can be carried out by studying a large set of technological documents like patents, research papers, technical articles, product literature, newly launched products and a brand’s recent activities.

Technology segmentation is the process of dividing a tech domain into small segments based on the various application areas or problem/solution areas. These small segments can then be further divided into even smaller ones for deeper analysis. Each level has many segments, which are called tech nodes. They can be further divided into a sublevel.

Practical example of a smart home domain to understand applications of taxonomy

The smart home domain is experiencing disruptive technologies that are changing the paradigms of market trends. At the first level of division, there are apps, hubs, devices and enabling technology. Further division shows that there are many types of smart device (eg, for hospitals, gardens, security and the kitchen). This can be segmented even further to provide a third level of division and so on, as shown in Table 1.

Table 1. Taxonomy for smart home domain

This method of categorisation brings hidden opportunities in different tech domains of smart homes to the surface.

Studying the technological landscape can aid technological advancement, but it is just half the battle. To develop the products that perform well in a market, the taste and preferences of the consumer must be taken into account.

Companies can reap the benefits of technological segmentation when it is combined with market research. Figure 1 shows a survey by Parks Associates, which reveals the sectors in which consumers show most interest.

Top 10 appealing smart home device expanded use cases (Q4/2018)

Among smart home device owners surveyed

Among smart home device owners surveyed

Parks Associates

One of the insights that can be derived from the survey is that consumers are constantly ranking safety and security as their top concern, followed by energy management. The global smart security systems market grew by 78% to a staggering $723.8 million between the second quarters of 2016 and 2017.

Further, the global smart lighting market grew by nearly 81% to $101.2 million between the second quarters of 2016 and 2017. Such insight could help business leaders find profitable investment opportunities and show R&D leaders where to direct research teams.

How can taxonomy help business leaders set clear business goals?

The representation of technological segmentation is called taxonomy. It helps a business to plot the list of companies that have maximum hold in the domain on the basis of their patent filings and means that start-ups or big companies that are performing rigorous research can be easily found.

Further categorisation can be done for these companies based on their size, research activities, the products that they are developing and previous M&A. Having the list of required companies that a business wishes to look at from an M&A or competitive perspective can help businesses make wise choices.

Below are some of the questions that business leaders have, and that technological segmentation can answer:

  • How to find profitable technology area to invest in?
  • Which areas are crowded by patents?
  • What are the technology areas that are high in demand but have less patent filing?
  • What does patent filing of different players reveal regarding their business strategy?
  • How have other players figured the white spaces?
  • Where are the opportunities for M&A?
  • Where are the threats on the horizon?

How can taxonomy help R&D leaders set a clear research direction?

Taxonomy can help R&D leaders to figure out the most-developed areas and how each sub-node is growing. They can see state-of-the-art technology in each node by other inventors and engineers and develop their research based on this. Awareness of research trends can help them to structure their portfolios.

In the safety and security sector, there is a patent for smart monitoring (CN104865837A) and one for an access control system (US20160065572A1) which recognises, authenticates and authorises entry of a person into a home. Another example is biometric access control – facial recognition, iris recognition and fingerprint recognition. Taxonomy also helped to find a patent that focuses on warning systems, which encompass fire, burglar and other alarm systems (CN204288422U).

Doing market research alongside patent analysis helps companies get a better understanding of where they should focus their R&D. At the Consumer Electronics Show 2019, there were products that implemented the following inventions:

  • Array announced a series of connected outdoor security light fixtures to work alongside its Video Coach Lights, which had microphones and speakers included to allow homeowners to converse with visitors.
  • Ring announced motion-sensing lights, which integrate with its line-up of cameras and doorbells to record a video when the lights detect motion.
  • Ring (formerly DoorBot) had roughly 1.6 million customers it could integrate with Amazon’s Echo virtual assistant (Amazon Web Services) and therefore, Amazon invested $1 billion into it.
  • There are many smart door lock products, such as Kwikset Premis, which can be controlled through Siri commands and SECURAM Touch and are accessible through fingerprint touch and remote access and codes. It features auto-locking and allows for guest access through one-time use codes.

Further, in energy management, taxonomy can help to find a patented invention for smart meters (ie, an internet-capable device that measures the energy, water or natural gas consumption levels of a building or home) (CN105282808A). Whereas traditional meters measure total consumption only, smart meters record when and how much of a resource is consumed. This system allows for monitoring, analysis, control and communication within the supply chain to help improve efficiency, reduce energy consumption and cost and maximise the transparency and reliability of the energy supply chain.

Another patent application that was found (WO2017034371A1) discloses the components which not only monitor and control the standby power consumption of an individual appliance, but also manage energy consumed by all controllable appliances. This would cover smart plugs, smart sockets and smart switches, among others.

Below are some of the questions that R&D leaders have, and technological segmentation can answer:

  • What competitors and their inventors have in the development pipeline and what major problem is being solved by them?
  • What can be the technological alternatives for a certain problem?
  • What could be the next groundbreaking research that will disrupt the market?

Final thoughts

With each day, the world we are living in becomes more complex. At this very minute, hundreds of researchers will have finished scientific papers. Hundreds of others must have filed patents for their inventions. More than 3.17 million patents, and 2 million scientific papers are filed each year worldwide. For a long time, patent analytics was used to find factual information, visualisation and interpretation. But now there is a lot of room for creative people who are not afraid of the new and unknown and who want to see how technological development will unfold. This is the true spirit of research and innovation.

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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