Deep Tech Exploration: How ZEISS Drives Technology to Shape Future Markets

Sometimes, innovative technology already exists but the problem it solves is not so easily apparent.

Thinking about a problem in a new way is what optoelectronics manufacturer Zeiss does well, as it utilizes its technology to shape new markets. Yet this technology-inspired innovation isn't simply a 'tech push’.

Zeiss is a high-tech company operating in four main segments: semiconductor manufacturing technology, industrial quality research, medical technology, and consumer markets. Despite being relatively unknown, Zeiss's semiconductor manufacturing technology, particularly UV lithography, is crucial and widely used in various products.

The advanced nature of UV lithography creates a technology differentiation for Zeiss. The newest generation of chips can only be made with this UV technology, and ASML is the only company capable of doing so, using optics from Zeiss.

While this may seem like a guarantee of success, the reality is that it is an extreme case. The development is based on Moore's Law, with clear market and technology roadmaps. However, the high cost of the technology poses a challenge despite its market demand. Zeiss believes in the importance of technology and its market pull but acknowledges that it is not always an easy path.

Market Demands vs Technological Changes

The strategy at Zeiss is based on finding customer problems and using technology as a means to solve them. However, the company does not rely solely on market demands because real disruptive innovation often comes from fundamental technological changes.

Customers tend to ask for improvements on what they already have, rather than envisioning something completely new.

To find disruptive innovation, it is necessary to look at technology and its potential for approaching problems in different ways. Additionally, the pace of technological advancement is much faster nowadays, and waiting for a technology to arrive in the market before reacting may be too late. Therefore, it is important to proactively explore technology and anticipate its impact, rather than waiting for market signals.

The Innovation Hub at Zeiss focuses on deriving strategic scenarios of how technology can impact markets and act accordingly. One example is the recognition of the trend of engineering biology, where the biology itself is engineered to be part of the solution.

Zeiss Meditec, a major player in ophthalmology, identified the potential impact of tissue-engineered parts of the eye as an opportunity for their business. They convinced the then CEO to create a new unit within corporate research to pursue this application. Additionally, Meditec made a significant investment in a biotech startup developing implants. These actions demonstrate the Innovation Hub's ability to identify and pursue emerging opportunities in the market.

Another example is the exploration of medical robotics and the potential for automating ophthalmic surgery. Zeiss Meditec, with its surgical microscopes, recognized that remote robotics and autonomous systems could impact their markets, even though surgeons may not ask for such innovation.

The Innovation Hub is currently working on engineering organoids, mini organs based on human stem cells, which have the potential to revolutionize pharma research. They are exploring opportunities for Zeiss microscopy, which already sells instruments in the pharma research field, to actively prepare for this trend by exploring new technologies, applications, and markets.

No Blueprint: Become an Explorer

All of this entails new technologies, applications, markets: there is no set blueprint or direct path. It requires an exploratory mindset and the ability to adapt. While it may be unclear where to start or how to proceed, learning to become an explorer is essential.

Intuitive explorers at Zeiss have driven the success of their initiatives. The challenge is to distill their mindset, intuition, experience, and external best practices into an exploration method. The methodology is divided into different phases, and one important aspect is understanding what makes deep tech truly paradigm-changing by assessing the functional level of technological developments.

Overcoming Barriers

Simply having a superior technology does not guarantee success when bringing it to market. Barriers may include the resistance of incumbents who stick to existing technologies, a lack of widespread capabilities, like engineers not fully utilizing additive manufacturing's potential, and a lack of infrastructure, such as charging stations for electric vehicles. Overcoming these barriers requires strategic planning and navigation.

In pursuing disruptive innovation and exploring deep tech, it is crucial to consider compatibility with existing value streams and potential resistance from stakeholders. Companies must understand the barriers to successful commercialization and the forces preserving the status quo.

At Zeiss, the deep tech exploration methodology includes an assessment of technology, which examines user acceptance, complexity, compatibility with industry structure and infrastructure, as well as ecosystem accessibility. This holistic approach helps identify viable entry points and develop a vision roadmap, bridging long-term strategic goals with concrete steps. The methodology is particularly useful for future strategic and adjacent business opportunities, as it opens up possibilities that may be difficult to uncover through traditional application-focused approaches. However, deep tech exploration is not an easy process and requires a different mindset and approach.

Continuous stakeholder management is crucial throughout the innovation journey, particularly for high-risk and adjacent horizon three strategies. Gaining top management support and convincing them requires doing the heavy lifting, including developing business models and providing actionable information, rather than just presenting a vision.

When the first entry point seems optional to the core business, that makes it difficult to garner commitment for the journey, even if the long-term strategic relevance is acknowledged. Exploring detours via startups that offer access to the technology and lead to the strategic vision could be worthwhile too.