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OM0018-Unit-01-Introduction to Technology Management

Unit-01-Introduction to Technology Management Structure: 1.1 Introduction Objectives 1.2 Concept and Meaning of Technology and Technology Management Technology Technology management 1.3 Evolution and Growth of Technology 1.4 Role and Significance of Technology Management 1.5 Impact of Technology on Society and Business Technology and competition Key issues in managing technological innovation 1.6 Forms of Technology Process technology Product technology 1.7 Summary 1.8 Glossary 1.9 Terminal Questions 1.10 Answers 1.11 Case Study 1.1 Introduction The term ¶technology· refers to knowledge, processes or products of technological activities, according to the context in which it is used, and the term management refers to the act of getting people together to achieve a specific goal. Management refers to the process of planning, organising, staffing, directing, and controlling the activities in an organisation. Thus, we can say that management of technology/technology management includes the factor of technology in all the activities like planning, organising, resourcing and leading the organisation. In this unit, we will discuss about the technology management, which is needed in all the organisations. Different people think differently about technology. In the context of business, economists consider technology as the knowledge used in the production, commercialisation and distribution of goods and services. In this unit, we will mainly focus on defining technology, and different types of technology. We will also discuss about the evolution and growth of technology. We will analyse the role and significance of technology management. In this unit, we will also study the impact of technology on society and business. We will also analyse the two forms of technology that is process technology and product technology.

This unit will enable us to understand the concept of technology management and its impact on us. Objectives: After studying this unit, you should be able to: · Define technology. · Explain the evolution and growth of technology. · Explain the role and significance of management of technology. · Summarise the impact of technology on society and business. · Describe the two forms of technology. 1.2 Concept and Meaning of Technology and Technology Management As we are discussing about the technology management in this unit, let us first discuss the concept and meaning of technology, and then the concept of technology management. 1.2.1 Technology Technology is derived from the Greek word ´technologiaµ in which "techne" means craft and "logia" means saying. On the whole, technology means having the knowledge of making something. Types of Technology We can define technology in different aspects. The figure 1.1 shows the different technologies that are commonly opted in today·s market.

Figure 1.1: Different Types of Technology Let us now briefly discuss about these technologies. · Teaching technology: We can define the technology of teaching as the technology related to systematically designed approaches. This technology includes the objectives, instructional procedures depending on the tasks that the student has to perform. · Instructional technology: As the name suggests, the instructional technology includes certain type of instructions that have to be carried out in a systematic way to achieve the objectives of the particular task. Effective instructions are brought by considering both the human and non human resources. · Assistive technology: As the name indicates, this technology is for the assisting people who want to work within a particular environment. The assistive technologies include technologies used in mechanical, electronic, or microprocessor based equipments. Assistive technologies help the disabled in different ways, such as, it: a Assists them to learn. a Makes the environment more accessible for them. a Enables them to compete in the work place.

a Increases their independence or improving the quality of life. · Medical technology: The medical technology refers to the technology including the inventions in the medical field. This has helped many of the individuals to stay alive. For example, artificial limbs, hip and knee implantation helps the disabled to lead a better life. There are some devices that provide respiratory assistance through oxygen supplementation and mechanical ventilation. · Information technology: We can define informational technology as the technology that helps in accessing the knowledge and resources on a wide range of topics. For example, internet is the best example of information technology. 1.2.2 Technology management Technology management means using new technology to create competitive advantage which is quite a difficult job, partly due to differing cultures in a company. Technology is often thought to be solely the domain of the scientific and engineering personnel of an organisation. Yet, successful business use of technology requires strategic decisions about technology by personnel in other functional areas, such as production, marketing, sales, finance, and so on. Thus, the two cultures ² technical and functional ² need to be bridged, and management should integrate technology strategy with business strategy. This is the essence of technology management. Many factors make up the technology development framework and there are several ways of condensing these into a manageable number of groupings or dimensions. Let us have a look at these six dimensions in the table 1.1. Table 1.1: Technology Management Dimensions Broad dimension Relevant factors Technological independence Self-reliance International trade gain Productivity gain Objectives Human need satisfaction Monitoring and control Research & Development Transfer and adaptation Activities Assessment and planning Perspective range ( > 20 years) Long range (11 - 20 years) Medium range (6 - 10 years) Time Short range (1 - 5 years) Resources (human, material, finance, facilities, energy) Constraints Technological level (knowledge, science, skill, information)

Management capabilities Late starter Awareness measures Science culture creation Education and training Mechanisms Criteria R & D institution building Maximise positive and minimize negative effects

These dimensions given in the table 1.1 are interlinked and a proper management of technology requires a systematic consideration of all of them. Self Assessment Questions 1. The technology that deals with the medical inventions is called as the _________________. 2. Informational technologies are the technologies that help in accessing the knowledge and resources. (True/False)? 3. Technology is derived from the Greek word _____________. Activity 1: Visit different websites and find out the definitions for technology given by different economists across the world. Hint: www.businessdictionary.com/definition/technology.html 1.3 Evolution and Growth of Technology In the previous section, we learnt about the concept and meaning of technology. Now, we will discuss about the evolution of technology, before going to the other topics about technology. The history of technology dates back to the time when humans were able to prepare some simple tools with easily available natural resources. History indicates that the advancement in technology had a major leap with the invention of the wheel. From the invention of the wheel, much usage of the technology has started. The technology in all the fields has grown to a larger extent and now we can see the technology involved in almost all the things we use in our daily life. We know that there are some advanced technologies at present which include the printing press, telephone and Internet which have helped us to communicate all over the globe. Till now we have mainly concentrated on technology management in general. Now let us learn about technology management in India. Technology management in India The Government of India is mainly focussing on the development of science and technology in the present world. The Indian industries are operating under the controlled and regulated economy. The technology management is generally lacking at the enterprise level except a few enterprises. There are many Indian companies which are able to develop and produce the internationally competitive products. The companies which use different kinds of technologies, and are excelling today, in India are the Punjab tractors, tata automobiles, amul food and certain drug and chemical industries. In the same way, there are many Research and Development (R&D) institutions which have developed and commercialised the technologies in the areas of drugs, chemicals, food technology, and computer software.

The productivity of the Indian industries largely depends on the technologies that are imported. Most of the technologies that are used in the Indian industries are cost effective. In July 1991, government of India introduced the new industrial policy that mainly focussed on international competitiveness, quality, efficiency and exports. This helped in the change in operating environment of the Indian industry. Because of this, very well planned technologies were developed at the enterprise level. These days, the companies are paying more attention on technology in order to be more competitive in the business market. It is not only the large scale industries that require the technology management; even the small scale industries also need a technology management to face the competitive world of today. Self Assessment Questions 4. The technology has taken its history when the humans were able to modify some natural resources to _____________. 5. The productivity of the Indian industries largely depends on the technologies that are imported. (True/False)? 6. The small scale industries also need a __________________ to face the competitive world of today. Activity 2: Suppose that you are a lecturer in a university. You want to give a lecture on the evolution of the computer technology. Prepare a lecture outline for the same. 1.4 Role and Significance of Technology Management Till now, we are familiar with the concepts of the technology and the technology management. Now let us proceed further in our discussion and move on to the role and significance of management of technology. There is rapid growth in technology starting from the invention of fire and wheel, till today. The growth rate of technology is also increasing rapidly. The technology that is applied in the production industries plays a major role in the production activities of those industries. The proper monitoring and control of the production helps in achieving good heights in the present market. We have to incorporate many of the technologies to carry out the processes in an organisation and compete with other companies in market. For the successful long term operation of the business sector, we need to incorporate certain factors like the technology and management of technology. We need to consider three main requirements for starting a technological innovation-based firm. These three requirements are: · Idea of technological innovation. · A potential market. · Team work in both the technological and business expertise. The three requirements mentioned above, are interlinked. The technological innovations (done in a team for adapting knowledge from different people in the organisation) need to be carried out, for gaining the potential market, which in turn closely interacts with different divisions in an industry. We know that technology plays an important role in running our business and society. We also know that advancement in the technology has greater influence on the creation of national and individual wealth. Let us have a quick overview of the role of technology from different aspects. · The technology of teaching helps to monitor the process of student learning and monitor student activities. · The instructional technology play an important role in the conventional media such as videotapes, computer assisted instruction and many other complex systems.

· The assistive technology helps to achieve the idiosyncratic needs of the particular individual. · The medical technology has played an important role in the human lives. It has helped to replace many of the infected organs with the new ones. · Information technology is playing a major role in the growing market today. This helps to access the knowledge and information from across the world. Self Assessment Questions 7. The advances in the technology have the greater influence on the creation of ____________ and individual wealth. 8. Methods and tools are required for managing technical ________. 9. The technological innovation has to be carried out to create competitive environment. (True/False)? Activity 3: Suppose that you are working in a company as a manager and you want to start a new project by creating a business plan. Give the necessary factors that you will consider for creating the business plan. Hint: Current business status. 1.5 Impact of Technology on Society and Business In the previous section, we studied about the role and significance of management of technology. In this section, we will study about the impact of technology on the society and business. The emerging technology has a great impact both on society as well as the business. There are many advanced technologies in the medical field which has helped to save many lives in the world. The technology behind Automated Teller Machines (ATMs) has helped people in the society to perform basic banking activities such as checking bank account balance, and withdrawing funds, even when the bank is closed. As technology is progressing, it is impacting greatly on the business too. This has helped the associated people to communicate effectively with the employees of the different offices across the globe. The advancement in the Internet technology has helped us to download different documents needed to carry out our tasks. The technologies like the web conferencing and tele-conferencing are helping us to make conference calls to conduct the meetings, training sessions and so on. Let us briefly describe the effects of technologies on business: · Reduced costs of operations: Different companies use different technologies for reducing manufacturing and administrative costs. · New product and new market creation: This involves the introduction of technology for the miniaturisation of the product. This involves the technology to reduce the size, become easily portable and useful for many applications. For example, the Sony Corporation has introduced the miniaturisation technology that aimed at developing the product with high portability. · Adaptation to changes in scale and format: This focuses on how the devices support the different features. For example, the mobile can support the email, browsing and so on. · Improved customer service: This involves the introduction of technology for improving customer service. This helps to gain the market in the present competitive world.

· Reorganised administrative operations: This involves the effect of technology on the administrative activities. For example, the introduction of Automated Teller Machines (ATMs) in the bank has reduced the employee effort that is required of distributing the cash at the cash counter. While studying the impact of technology on society and business, we need to consider the technology and the competition which exists in the present scenario. 1.5.1 Technology and competition To compete in the market, technological competitiveness is necessary but this alone is not sufficient. In this case, the corporation with inferior technology faces difficulty in competing with corporation with superior technology. Technology helps to give the competitive edge. The management has to mange the technology thinking that technology is also a part of business. Managing technology includes four components, namely, the New ventures, Innovation, Research and Research Infrastructure. We can see these concepts depicted in the figure 1.2:

Figure 1.2: Managing Technology New Ventures: The new ventures play an important role in the business. The new hi-tech ventures include two main tasks that have to be carried out. The new tasks are development of the new products and creation of the new markets. The ideas of these new ventures are concerned with the growth of organisation, and the business plan for the new project. Innovation: This involves innovating things. This includes the activities, starting from creating the technical knowledge to the time it is implemented in the new business. These include the ideas such as the types of innovation, sources of innovation and so on. Research: Research plays an important role in an organisation. This helps to know things better and helps to produce the products. We have to manage and integrate corporate research with the management functions and strategies which are helpful for the technology management. Managing of research includes the organisation of research, research personnel and the organisation research strategy. Research Infrastructure: The technological concepts are not only confined to a particular organisation. It is first to the industry, second to the nation and then to the whole globe. The research and development infrastructure has a greater impact on the competitive environment of our country. In the ever growing economic world, the infrastructure plays an important role and the firms need to be more attentive for developing the new products with the more innovation. Technological innovation is needed for competing in the market. There are some key issues in managing the technological innovation, which we will learn in the next section. 1.5.2 Key issues in managing technological innovation We know that technology is man-made and increases the physical and mental capability of human beings. We can say that technology is the useful tool which controls the environment and also acts as an instrument which converts the natural resources in to useful goods. This is the main factor which affects the growth of an organisation. There are many technological developments that have taken place in the society, in the last two centuries. These technological developments include development of transistors and computers, air-conditioning and refrigeration, space exploration, nuclear energy, and so on.

As we have already seen managing technology involves concepts like new venture, innovation, research and R&D infrastructure. Among all the four concepts that are discussed above, innovation plays an important role. This has the greater effect starting from invention of knowledge to commercialisation of products and processes based on the knowledge. We will now see some issues related to the technologies, which are briefly described below: · Technology and long-term cycles: There are some economists who argue that technology affects growth and recession in the world economy. The infrastructure is useful for maturation of the technologies. When the down turn starts to come up again then organisations has to invest the capital equipment that is based on the new technologies. · Technology and comparative advantage: At the national level, the firms will have more value when it has both the comparative advantage and also the technological lead. All the other companies from the world look for your organisation. For example, a Korean shipbuilding industry has become the leader by increasing the size of the shipyards and many techniques that were incorporated to increase the productivity and capacity of the vessels. The skills, knowledge and competitive leadership have helped them to achieve more heights. There are some of the emerging technologies that have to be dealt when you are discussing about managing technology. The emerging technologies are the new technologies that are sometime considered critical for humanity·s future. You can see some of the emerging technologies and their applications in the table 1.2: Table 1.2: Emerging Technologies and their Applications Most Important Emerging Technology Technologies Potentially made Obsolete applications Involves the creation of intelligent devices that can replace the human brain for many tasks. Involves the creation of species, modifying species to fit for a purpose. Stronger and lighter materials. Very fast air travel. Ensures connectivity everywhere.

Artificial intelligence

Human brain

Biotechnology Nanomaterials Scramjet Wireless communication

Evolution Steel, aluminium Jet engines, Rockets Wired communication

The emerging technologies given in the table 1.2 play a major role in the present world. We know that information technology plays an important role in the present competitive market and artificial intelligence is the subset of information technology. Artificial intelligence is that category of computer science which is related to making computers behave like humans. Artificial intelligence can create the human brain and replace many of the tasks. Information technology includes both the hardware and software. The hardware includes the physical products and components associated with the product. But software includes the know-how technique and the procedure that is involved with that. The hardware again is of two types. One is related to the end-use product type like the automobiles, computers and televisions. The second type in the hardware is the production tool type like instruments, machinery and equipments. The software technology is also of two types. One of the software type is the "know-how" type such as the processes techniques and next is the "know-why" type technology that includes the knowledge, skills and experience. The technology is viewed in a different way by different people. Some think that technology is a source of wealth, well-being. Some think that technology has destroyed many of the jobs, environment and social values. Technology is improving the poorest of the poor. We can see that many of the countries that are poor though they are very rich in the resources, such as new technologies. The poorness is due to the increasing population; technological base is very small or due to the resources that are getting depleted because of the export to other countries. It is possible for us to achieve the basic human needs in this technological world.

We live in the technological world that is helpful in satisfying the human needs. There are many ways of classifying the human needs. Let us see the implications of technological applications (positive effects and negative effects) with respect to various human need factors shown in the table 1.3. Table 1.3: Important Implications of Technological World Various human Need factors Positive effect of Technology Control of temperature, humidity, impurities and quantity Increasing supply source (ground, sea); control of supply, temperature and impurity Improved agricultural productivity; control of food quality, variety and supply Negative effect of Technology Pollution, destruction of natural cycles, and equilibrium

Air

Water

Pollution, destruction of marine life; sinking of cities; frequent flooding Chemical contaminations and diseases; destruction of wildlife, forests, and fishing grounds

Food

Shelter

Improved living quarters and materials Artificial surroundings and antiof construction; better utility services social living, destruction of the and land uses beauty of Nature Accumulation of means of warfare Development of civilian technologies and the menace of large-scale destruction of life; risk of bioas by-products of war technologies weapons and nuclear war (space, nuclear, remote-controlled) Efficient production of high quality clothing and apparel Exploitations of non-renewable resources and consumer appeal

Warfare

Clothing

Health

Reduction in mortality, increase in life Population explosion; break in family expectancy; controlled birth, better structure; drug abuses; side effects of medical care medications Increased contact; reduced need for Culture shock; co-ordination of physical movement; improved audio- sabotage by disruptive forces; raising video transmission false aspirations Improved mobility of people and goods through water, air, and land Better means for storing and dissemination of knowledge Much specialization and automation possible; increased women employment Pollution, noise, congestion, accidents and deaths Brain-washing through mass media, destructive education Tension between blue-collar and white-collar workers, increased inequality, strikes

Communication

Transportation

Education

Work

Institution Information

Depersonalization of human being in Creation of systematized, efficient and the quest for efficiency and productivity; depletion of energy and highly productive large complex organizations; exploitation of natural other natural resources; innumerable industrial wastes. resources; enhanced human power Tremendous improvement in processing, storing and disseminating Privacy and security concerns; crime

of voluminous information

and misuse of information power

Energy

Development of alternative sources of Threat of nuclear plant accidents; energy ± fossil, solar and nuclear depletion of energy resources Freedom from one set of constraints (Physical stresses) Creation of new set of constraints (Psychological stresses)

Freedom

Self Assessment Questions 10. Expand ATM. 11. Innovation involves innovating things. (True/False)? 12. Technology indicates the ____________ and competitiveness of the country. Activity 4: Consider that you are a manager in a company and you want to manage a technology that is newly incorporated. Prepare a list of the factors that are considered in managing technology. Hint: Innovation. 1.6 Forms of Technology In the previous section, we analysed the impact of technology on society and business. In this section, we will emphasise on two different forms of technology, namely, process technology, and product technology. Let us start with the process technology. 1.6.1 Process technology The process technology is the technology that is used to create and deliver products and services. We can say that the goal of the process technology is to evolve new technologies methodologies for assisting human-centered cooperative activities. Let us understand process technology by taking the example of digital integrated circuits. In the digital integrated circuits, the process technology refers to the methods that are used for making silicon chips. This aims at reducing the size of the integrated circuits. This brings down the size of the transistors and other components. If the size of the transistors is small, then we can accommodate more transistors in less space. When the chips, switch very faster, then they require lesser energy. We can measure the technology used in the digital integrated circuits in the following manner. Measured in Nanometres The features of the chip are measured in micrometers. The process technology of 3 micrometer is called as a "technology node" or "process node" that is called as the silicon chip with three micrometers in size. But in the present world, size is measured in nanometres. In the earlier ages, the process technology was referred to as the length of the silicon channel between the source and drain of the field effect transistor (FET). The size of the other features of the transistor is measured as the ratio of channel length. The other features can be larger or smaller than the channel size. For example, in a 90 nm, there can 90nm length but the width of the gate terminal can be only 50 nm. 1.6.2 Product technology As we are now familiar with one of the forms of technology, that is, the process technology; let us have a brief discussion on another form of technology, that is, the product technology. We use product technology to define the plan for the evolution of a product. Product technology helps us in linking the business strategies with the evolution of the product features. This helps totally in achieving the strategic

objective. In this technology, road maps play an important role in linking the marketing strategy to product plans and then product plans to the technology plans. These roadmaps help the corporate for planning, identifying needs, gaps, strengths and weakness in a common language. The roadmaps help for the longer term planning and help to improve the communication and ownership of plans. The roadmaps also help in team thinking priority-wise, that have to be assigned in each step of the planning process. Let us have a look at the main functions of the roadmaps in the product technology. The functions of the roadmaps are: · Linking strategy to product plans to technology plans: The people involved in the creation of strategies, product plans and technology plans, will create them independently. But, the roadmaps mainly concentrate on linking. Firstly, the roadmaps link the strategic choices based on the competitive environment to the product evolution and future implementation. After linking this, it links the product plans to the technology implementation plans. · Enabling corporate-level technology plans: We can see the roadmaps for simple needs that are met by a single development program, since there are roadmaps for several product lines. The needs are identified by cross roadmaps by analysing the database of roadmaps. Self Assessment Questions 13. The ______________ refers to the methods that are used for making the silicon chips. 14. Product technology is used to define the plan for the evolution of a product. (True/False)? 15. The process technology of 3 micrometer is called as _________. Activity 5: Prepare a list of the different forms of technology that is commonly used in Indian industries. Hint: Process technology. 1.7 Summary In this unit, we studied the concept and meaning of both the technology and technology management. We analysed that technology has evolved from the time when fire was invented. It has grown to the larger extent because of which we are in the super computer era at present. We briefly described the topics related to the technology management, which are necessary for all the industries. We analysed that we require business plans to start any new project. We also saw the great impact of technology on society and business. We also discussed that to compete with market in the present world; we require new technologies to be incorporated with our product. We also studied different forms of technology, namely, process technology, and product technology. The process technology aims at reducing the size of the integrated circuits, and the product technology links the business strategies with the evolution of the product features. 1.8 Glossary Term Commercialisation Innovation Ventures Description The act of involving something in commerce. The act of introducing something for the first time. A business enterprise that includes some kind of risk in expecting the gain.

Transistor Electrification Micrometer Roadmap Cross roadmap Idiosyncratic 1.9 Terminal Questions

A small electronic, semi conductor device which has the capability to amplify and controls the flow of electric current. The act of providing electricity. The unit of length in metric system that is equal to one millionth (10-6) of a meter. The detailed explanation of the plan which helps to determine the course of action. The road maps that are used for analysing the database of the roadmaps. A structural or behavioural characteristic distinctive to an individual or group.

1. Write a short note on evolution and growth of technology. 2. Explain briefly the impact of technology on the business. 3. Explain briefly about Managing technology. 4. Briefly describe the two forms of technology. 5. Define the term technology. 1.10 Answers Self Assessment Questions 1. Medical technology 2. True 3. Technologia 4. Simple tools 5. True 6. Technology Management 7. National 8. Resources 9. True 10. Automated Teller Machine 11. True 12. Economic growth 13. Process technology 14. True 15. Technology node or process node

Terminal Questions 1. Refer section 1.3 Evolution and Growth of Technology. 2. Refer section 1.5 Impact of Technology on Society and Business. 3. Refer section 1.5 Impact of Technology on Society and Business. 4. Refer section 1.6 Forms of Technology. 5. Refer section 1.2 Concept and Meaning of Technology. 1.11 Case Study Case Study on the Inclusion of New Technology This case study is about the incorporation of the technology in the Xerox company. In 1990, the XYZ research centre that was set up by the Xerox company was separated from the parent company as a separate entity. The new organisation called as the XYZ Ltd was expected to provide the research services and innovative products to the industry leaders in different areas. In three decades it came with the new technologies and brought the good will and prestige to the Xerox company but the profit was very less. In the year 2000, it experienced a dip due to corporate crisis and the Chief Executive Officer (CEO) also died. After this incident, Murthy became the CEO and then he concentrated aggressively on improving the profitability. The company took a massive restructuring program to maintain stability in the company. First it was thought to combine with the other companies but later it was considered as a wholly owned subsidiary of Xerox. There was a great time for the company from the early 1960¶s to the 21st century when many of the technologies introduced and the laser printers all came to the use. In the 21st century the XYZ research centre was aimed to work on innovative ideas and produce products like the blue lasers, multi beam lasers and micro-electro-mechanical systems which has revolutionised the Xerox industry. Challenges: 1. Understanding the conflicting structure and culture issues involved in managing the innovation successfully. 2. To study about the ways in which the organisation lost its opportunities in the past and the way that it has to be restructured to meet the needs of the future. Results The Xerox company is now technologically improved a lot. Questions: 1. What are the challenges faced by the XYZ research centre? Hint: Understanding the culture of the organisation 2. What was the main aim of New CEO Murthy? Hint: Profitability.

OM0018-Unit-02-Technology Acquisition
Unit-02-Technology Acquisition Structure: 2.1 Introduction Objectives 2.2 Technology Acquisition 2.3 Alternatives for Acquiring New Technologies 2.4 Reasons Compelling a Company for Obtaining a New Technology 2.5 Management of Acquired Technology 2.6 Measures of Scale and Mechanisms for Acquiring Technologies Economy of scale or Scale economy Levels of scale The measurement of scale Factors affecting the choice of scale 2.7 Summary 2.8 Glossary 2.9 Terminal Questions 2.10 Answers 2.11 Case Study 2.1 Introduction Previous unit familiarised us with the concept of technology, the evolution and growth of technology, role and significance of management of technology. We have also seen the impact of technology on society and business and the different forms of technology that are process technology and product technology. This unit will familiarise us with acquisition of technology which plays an important role in managing the planning process in an organisation. Acquiring technology is helpful for evaluating and managing the technology. In this unit we will study about the alternatives for acquiring new technologies. This unit will also give us an overview of the reasons that compel the company for acquiring technology. We will also learn about the way to manage the acquired technology and different measures of scale and mechanisms for acquiring technology. This unit will enable us to analyse the importance of technology acquisition and its relation with management. Objectives: After studying this unit, you should be able to: · Explain the meaning of technology acquisition.

· State the available options/alternatives for acquiring new technologies. · Cite the reasons compelling a company for obtaining a new technology. · Describe how acquired technology should be managed. · Explain different measures of scale and different mechanisms for acquiring technologies. 2.2 Technology Acquisition As we are familiar with the term technology, let us now study the meaning of technology acquisition. Generally, we can define technology acquisition as the process that requires the strategic planning, and is more time consuming and complicated. Acquiring technology involves the purchase of external technology and knowledge without getting co operation from the source. This external knowledge involves incorporation of knowledge into machinery and equipment. We can acquire this external knowledge by hiring the people those who have the basic knowledge of new technology. The acquisition of a new technology arises from the need to implement a corporate technology strategy, and as such, all the efforts and planning need to be focused on the problems of technology acquisition. We know that a new technology is often acquired in an embodied form along with the equipment and facilities. We also need to carry out further application development work by establishing operational skills. The operational skills include plant-commissioning, demonstration, and operator training. This also includes activities which help supplier of equipment in the process of Technology acquisition. By now, we are familiar with technology acquisition. Now let us have a brief discussion on the advantages and disadvantages of technology acquisition. Advantages of technology acquisition There are some advantages that are associated with the acquisition of technology. · Acquisition helps us to get the complementary products that help for the success of the organisation. · Acquisition helps us to acquire more revenue because of the new technologies that are incorporated. · Acquisition helps for the improvement of research and development centres. · Our understanding of the topic will be incomplete, if we study only the advantages and leave the disadvantages. So, let us now have a look at the disadvantages of the technology acquisition. Disadvantages of technology acquisition · The technology acquisition causes the change process in an organisation that affects many of the employees of that organisation. · The technology acquisition causes the confusing and disruptive process in the organisation. Self Assessment Questions 1. Technology acquisition is the process that requires the strategic ________. 2. Acquisition helps us to get the complementary products that help for the success of the organisation. (True/ False)? 3. The technology acquisition causes the _____________ in the organisation that affects many of the employees in an organisation. 2.3 Alternatives for Acquiring New Technologies

As we are now familiar with ¶technology acquisition·, we will study the different alternatives for acquiring new technologies. We are presently living in the competitive world. The organisations have to use the advanced technologies to remain in competitive market of today, for long. The technology managers have less time, fewer resources and more problems for the implementation of the technology. There are many alternatives for acquiring the internal and external technologies. The different alternatives are: · Develop technology in-house: This involves development of the technology within the house. In this, the company has to make an estimate of the financial costs that are associated with the Research and Development (R&D) and the cost of the opportunities that are associated with R&D. This also assesses the suitability of the employees for the new project. · Buy the firm that has the technology: We have to invest for the introduction of the technology. It is also important that following the purchase, the operations can be effectively integrated and that there is no undue loss of key staff. · Enter into joint ventures: We know that many of the companies share the costs of the new technology; in the same way, the benefits are also shared. The membership of the research gets more attraction when the risks are high and the costs are heavy. There will be existence of very good relationship between the key supplier and the major customer. · Obtain license for use of technology: We know that the term license means the purchase of access. In this case it is the purchase of access to the proprietary technology. It can be anything from the right to use a particular patent to a complete package, which includes know-how agreements, commissioning assistance for new plant and processes and the provision of updated designs and other technical information. · Education and training: The soft skills required for the new project are developed by the training programs in the organisation. The experience makes use of techniques more effectively. We can gain experience by keeping in touch with other companies. Self Assessment Questions 4. The term license means the purchase of __________. 5. The soft skills required for the new project are developed by the ______________ in the organisation. 6. The membership of the research gets more attraction when the risks are low and the costs are also low. (True/False)? 2.4 Reasons Compelling a Company for Obtaining a New Technology In the previous section, we learnt in brief about the different alternatives for acquiring new technology. Now let us discuss about the reasons which compel a company for obtaining a new technology. The use of new technologies plays an important role in the industry. Whenever a company wants to adapt the new technologies, it has to make decisions related to the acquisition of the technology. The company has to see the experience of its R&D for the actual need of acquiring the knowledge. The acquisition of technology becomes critical when the market lead time and competition is more. The following explains the reasons that compel the company for technology acquisition. · Technology acquisition helps to bridge the gap in technology, in the developing countries like India. The fastest way of bridging the technology gap is through collaborations. Acquiring the technology from outside company is more costlier than acquiring technology from the R&D of the same company. It will be better, if we develop the new technologies from the in-house R&D. The dependence of the company on the collaboration is bad and we should have the self-reliance in the company every time. · Technology acquisition depends on the policy environment. Sometimes the economic policies do not allow the foreign countries to sell their goods and services in the domestic market. In such times, the foreign companies can get the financial returns only through the collaboration and selling the raw materials and components.

· Technology acquisition is the process by which a company acquires the rights to use and exploit a technology for the purpose of improving or renewing processes, products or services. It does not include retailed or mass market off the shelf software which is generally governed by non-negotiable "shrink wrapped" licences. · Technology acquisition is mainly designed for business-to-business technology acquisition. In few cases, technology comes from a university or research organisation. The origin of the technology can take place in any area but it has ton be tested, proven and ready to use. · Technology acquisition helps for enhancing the productivity of an organisation. The company planning for technology acquisition has to make the agreement between the two companies and even the details of the costs are also present as part of the application. Self Assessment Questions 7. Technology acquisition helps to bridge the gap in ________ in the developing countries like India. 8. Technology acquisition is mainly designed for the business-to-business technology acquisition. (True/ False)? 9. Technology acquisition helps for enhancing the ________ of an organisation. Activity 1: Consider that you are the team manager in the company and the company is planning for the acquiring technology. Prepare a list of the reasons that are forcing to go for acquisition of technology. Hint: Bridge the gap in technology. 2.5 Management of Acquired Technology In the previous section, we learnt about the reasons compelling a company for obtaining a new technology. Managing things play an important role in an organisation. Even the technologies that are required also require management. In this section, we will study about the management of technology acquisition. Once the strategic decision has been made to acquire a technology from outside the company, the management of that acquisition becomes important. The following are the important factors that have to be kept in mind for managing the acquisition. · The role and management of technology within the company needs to be assessed, especially its capability of managing the transfer activity. · The allocation of appropriate staff for the transfer and application of the technology is done. The project manager must be at a senior level, while his colleagues need to have engineering application and change management skills. · The corporate objectives include capability and the technology transfer track record of the prospective transferor. Effective technology acquisition is often based on a longer-term relationship. · Clear technical and contract specifications are essential. Because of the nature of the technology and its integration with intellectual property, the transfer constituents vary in type and character. If the transfer is from a different culture, special attention has to be given in detail and the meaning of language. · Contract negotiations can be time consuming. They require diplomatic skills and careful record-keeping. · Because of the nature of its acquisition, transferred process technology needs to be handled with even more care than indigenous technological change. It is important that all affected company staff appreciate the nature and reasons for the acquisition. In managing the acquisition technology, we have seen the factors that have to be kept in mind. The managing technology should also consider the evaluation of technology. This topic of evaluation of technology is considered in the next few paragraphs.

Evaluation of technology The evaluation of technology is necessary in managing the acquisitions of technology. The Evaluation can be done based on the feasibility or based upon some criteria for managing the acquisition. Let us firstly discuss about the evaluation based on the technical feasibility. Evaluation based on feasibility: The evaluation based on technology feasibility involves the evaluation process that decides whether the technology is suitable for the organisation or not. Let us see the factors that are considered in the evaluation based on technology feasibility as shown in the figure 2.1.

Figure 2.1: Factors of Feasibility The figure 2.1 shows the Factors of Feasibility. Based on these factors, the firm analyses the technology and takes the decision whether to accept or reject the technology. Let us briefly describe these factors. · Manual difficulty: The manual difficulty involves finding the skills that are required in acquiring technology. · Space requirement: This involves checking whether it can accommodate the technology. · Life of the equipment: This involves finding the life of the equipment, so that it helps in choosing the alternatives. · Infrastructural changes required: This involves the requirements related to the infrastructure. This checks whether the organisation possess the infrastructure to take the new technology or not. · Raw materials requirement: The raw materials that are required both quantitatively and qualitatively to adapt the new technology is found out. · Capacity: This involves the capacity of an organisation to adopt the new technology. · Availability and maintainability: This checks the availability and maintenance of new technology in the organisation. · Capital investment required: This helps us to decide whether to invest in the technology or not. The investment is required for all the technologies that are introduced. We have analysed from these factors that the company choose the technology depending on the feasibility of the technology. In many of the cases, the company will not consider a single technology, but it considers the alternate technologies and chooses the best one. When there are more than one technologies, they are evaluated on the basis of some criteria like Economic criteria, Techno-economic criteria and multiple criteria. Therefore, we have the technology choice model which considers the different technologies with equal evaluation. Now, let us study about the Technology choice model. Technology choice model

The technology choice model is an integrated model which considers different criteria with uniform scale of evaluation. The technology choice model criteria are shown in the figure 2.2.

Figure 2.2: Technology Choice Model Criteria Let us briefly explain these three criteria of technology choice model. · Economic criteria: Economic criterion is the most popular method as it involves the monetary value and expresses the benefit in terms of monetary value. The commonly used economic criteria method is the discounted cash flow method and parameters are the present worth or the internal rate of return. The discount is generally made assuming a minimum attractive rate of return (MARR). However, these monetary values can also be adjusted for inflation which is not a normal practice. · Techno-economic criteria: Techno-economic criteria involve the verification of technical feasibility. In addition to economic feasibility, technical feasibility is also verified when the technologies are complex. The alternative technologies are compared for a specified set of parameters such as: Raw material requirement. Personnel requirement. Space requirement. Material handling requirement. Capacity per unit time. Useful life. Among these parameters, we can find that some are quantitative and some are qualitative. The qualitative parameters are qualified over the scale from 0-10 as that in social sciences. An index is then prepared by normalising the quantitative parameter values and by the addition of the values of all parameters. Both economic evaluation and techno-economic feasibility are the conventional methods of the choice model. They are, no doubt, necessary but are not enough to evaluate technologies in the present situation, where the world is more concerned about the degrading environment, mining societies, and so on. Therefore, it has become essential to evaluate alternate technologies using multiple criteria such as environmental, and social, in addition to economic and technical criteria. Let us study the multiple criteria.

y y y y y y

· Multiple criteria: We have to evaluate the alternate technologies using multiple criteria such as environmental, and social, in addition to the economic and technical criteria. Technology selection is required in all the industries of the present world. We can see many of the methods in the multi-criteria decision making. The multiple methods include Simple weighted average method, Elimination and choice translation algorithm (ELECTRE), and Preference organization method for enrichment evaluation (PROMETHEE). However in these methods, there is no formal procedure for evaluation of weights, which is essential for technology choice-making. These are helpful in the selection of suitable technology for an organisation. Self Assessment Questions 10. Economic criterion is the most popular method as it involves the _________. 11. Expand PROMETHEE.

12. The technology choice model is an integrated model which considers different criteria with different scale of evaluation. (True/False)? Activity 2: Suppose that you are the team lead in the company and the company has decided to go for the acquisition of the new technology. You have to check the feasibility of technology. List the feasibility factors that you will follow for the same. Hint: Manual difficulty. 2.6 Measures of Scale and Mechanisms for Acquiring Technologies In the previous section, we have learnt about management of acquired technology. In this section, we will study about the measures of scale and mechanisms for acquiring technologies. This plays an important role in management of acquired technologies. Technologies are evaluated taking in consideration of the competing technologies and these are evaluated independently. Evaluation becomes necessary not only for choosing appropriate technology, but also for verifying whether the technology in question is suitable to the environment or not. It is said that a technology, which became popular or which was found to be the most successful technology in a country may not be suitable to another country. The people among countries, even within the large countries, differ in their culture, attitudes, education, economic status. However, before determining the alternative technologies, it is necessary to determine the scale of proposed operation. So, now we will demonstrate the scale economy. 2.6.1 Economy of scale or Scale economy We know that every organisation requires scale of economy to run the business and for the evaluation of the acquired technologies. Scale is not merely size but size with proportions and consequences. When this proportion is not in harmony, it creates problems. We can define scale as the level of planned production capacity that has determined the extent to which specialisation has been applied in the sub-division of the component tasks and facilities of a unified operation. We can even take the size of production or quantity of service that provides a break as economy of scale. In many situations, it is observed that as the size increases, the cost per unit decreases. However, the increased size is not without problems. It was also found that the capital investment per unit of output, material cost per unit of output, fuel cost per unit of output and so on. are lower with large size. We can achieve economies of scale by: · Specialisation of technology. · Concentration on production. · Rationalisation and standardisation of the new technology. Let us see some disadvantages associated with the present large scale industries are: · Environmental problems: After the introduction of new technology there can be some problems that effect the environment. · Unemployment: The introduction of new technology reduces the employees needed in the organisation. The introduction of new technology has much use of the machines and reduces the man power that is needed. · Market restrictions: There are market restrictions with the new technologies in which there are some technologies that are applicable only for the few markets. 2.6.2 Levels of scale Now, as we know the economy of scale, it is easier for us to understand the levels of scale, which play an important role in mentioning the different hierarchies. We can divide the problem of scale into the five hierarchies of levels, as given in the figure 2.3.

Figure 2.3: The Hierarchies of Levels Let us now have an overview of these hierarchical levels of scale. · Level 1: Level 1 is the scale of a single unit of physical equipment called as the engineering level or unit level. This involves the use of several separate units. We can call the scale of single product line as the product level because the product deals with single level. · Level 2: Level 2 involves the arrangement of several product lines at a single site. This is the scale of a single plant or factory. We can call it as the plant level. · Level 3: Level 3 is the scale of a single organisation. We can call it as the corporate level and all the functions in this are related to the corporate scale. · Level 4: Level 4 is the scale of total industry or the industrial complex. This involves the co-operation among organisations. This is called as the industrial level. Even in competitive environment, common pressures and the perception of common interests foster co-operative behaviour at the industry level. · Level 5: Level 5 is the scale at the national or society level. 2.6.3 The measurement of scale After studying the different levels in the scale, we will now study about the measurement of scale. Generally, it is difficult to provide a single measure of scale. This involves the process of determining the functions and purposes to determine the measures. Let us have a brief discussion on these measures below: · Absolute measures of scale: The absolute measures of scale include the measures like: Number of people employed. Physical area or volume occupied in an organisation. Physical mass or volume of daily or annual throughput. Financial value of the capital employed. Financial value of daily or annual output. · Relative measures of scale: The relative measures of scale include the measurement of factors like:

y y y y y

Size of unit being considered. Size of largest existing unit. · The performance measure of scale: The performance measure of scale includes the factors that are related to the performance of the organisation. The performance measure of scale includes the measures like:

y y

y y

Output of useful goods: This involves the resources that are given as the input for the process. The output depends on the input that is fed in to the process. Time / year capacity: This involves the capacity of the organisation to produce the product. This involves the capital that has to be invested.

Own market share: This involves the market share of the target competitor. This helps to compete with the other industries in the market. After learning about the measures of scale, it is incomplete if we leave the factors that affect the choice of scale and the optimum scale approaches to solve the problems of scale. So, let us now discuss about them.

y

2.6.4 Factors affecting the choice of scale There are many factors that affect the choice of scale. The factors include the political factors, social factors like unemployment and the economic factors. Generally, the factors that favour the increase of scale are mainly internal to the firm, whereas the factors that cause the decrease of scale are mainly external factors. We may initially use a balance between these two, to determine the optimum scale. We can use any of the following approaches to solve problems of scale. · Industry-specific approach: In this approach, it is assumed that the problem of scale is technical and industry specific. For example, electricity cannot be stored, ice-creams are perishable and so on. While approaching the scale of such a product, you must be able to distinguish between conclusions specific to that industry and you can decide the application of those products. · Engineering Generalisation: Engineering aspects tend to be industry specific, but there have been some crossindustry generalisations. The cost, here, is expressed as: Cost = constant x capacity C = a + pk Here, Constant ¶a· is the fixed cost, where as the ¶pk· is the variable cost. ¶k· is obtained from empirical studies and recorded for a wide variety of processes and equipments. Now theoretical base is explained for values of ¶K· but empirical results are better. In engineering analysis, the decision is crucial at the time of procuring the equipment. Additional capacity may not cost more if purchased at the beginning instead of a low capacity one but it may be very costly to add that capacity later. Technological development: This also appears to be engineering approaches but deals with dimensional analysis and models of growth. This specifically deals with the evolution over a time period of the relationships between the key features of engineering systems. Therefore, a generic model is developed here: Yt = a tb (or) Yt = c Xtd Where, Yt - the size of the largest unit at time t Xt - cumulative production up to t, and a, b, c, d are constants for the particular technology. · Industrial economics and econometrics: This approach uses static economic models and U-shaped cost curves more generalised using standard regression techniques to fit various parameters, rather than considering the plant design and operation. Input - Output approach is one of the prominent techniques of econometrics. · Engineering ² Economic systems: This involves the use of analytical models to determine the choice of optimal size. This considers the effect of market growth, desired Return on Investment (ROI), scale characteristics and the costs of alternatives on the optimal size and optimal mix. This involves the concepts like social science and organisation scale and the control theory. These are explained as follows. Social Science and organizational scale: It says that the scale also depends upon the size and form of the organization. Studies reveal that there is a close relationship between the organisational form adopted and the phases of development of industry. y Control theory: This concept involves the analytical models to control the strategies. Computer simulation models underlying interactions consider it as a dynamic and stochastic system and use control strategies. Self Assessment Questions

y

13. Level 2 in the levels of Scale is called as the plant level. (True/False)? 14. Industry-specific approach assumes that the problem of scale is technical and ________specific. 15. Industrial economics and econometrics uses economic models. (True/ False)?

Activity 3: Consider that you are working in the company that has acquired technology from the external sources. You have to see the performance measure of the scale. List the factors that are involved in the performance measure of scale. Hint: Output of useful goods. 2.7 Summary In this unit, we learnt about the technology acquisition, which is the process that requires the strategic planning. Acquiring technology involves the purchase of external technology and knowledge without the co operation of the source. We also studied the different alternatives for acquiring new technologies. These different alternatives include develop technology in-house, buy the firm that has technology, enter into joint ventures, obtain license for use of technology, education and training. We also analysed the reasons that compel the company for the technology acquisition, since the technology acquisition helps the industry in many ways especially in the field of R&D. We know that when we planned to acquire the knowledge from outside then it needs to be managed properly. This also requires the evaluation of the technology that can be done in different ways. One way of evaluating is the evaluation based on the feasibility and the other way is by the technology choice model that considers the three criteria. These criteria include the economic criteria, techno-economic criteria and multiple criteria. We have also discussed about the measures of scale and the levels of scale that is given in the hierarchical way. 2.8 Glossary Term Description The purchase of one corporation by the other. It can be through the purchase of shares or assets. This is the private technology that is owned by the particular company. The plan that integrates the strategies of whole business within the organisation in terms of technology. The activity that converts the installed hard-ware of a new plant into operational activity. The special training given in the organisation for the individuals to learn the specific skills. The end user agreement that is enclosed with software in plastic wrapped packaging. The group of products that are developed by the organisation that are closely related in terms of use, production and marketing requirements.

Acquisition Proprietary technology

Corporate technology strategy

Plant-commissioning

Operator training

Shrink wrapped licensee

Product lines 2.9 Terminal Questions 1. What do you mean by technology acquisition?

2. Explain any two alternatives for acquiring new technologies. 3. Give the reasons that compel a company to go for the new technology.

4. Explain in brief about evaluation based on feasibility. 5. Write a short note on economy of scale. 2.10 Answers Self Assessment Questions 1. Planning 2. True 3. Change process 4. Access 5. Training programs 6. False 7. Technology 8. True 9. Productivity 10. Monetary value 11. Preference Organization method for Enrichment Evaluation 12. False 13. True 14. Industry 15. True. Terminal Questions 1. Refer section 2.2 Technology Acquisition. 2. Refer section 2.3 Alternatives for Acquiring New Technologies. 3. Refer section 2.4 Reasons Compelling a Company for Obtaining a New Technology. 4. Refer section 2.5 Management of Acquired Technology. 5. Refer section 2.6.1 Economy of scale. 2.11 Case Study Case study on acquisition of technology This case study deals with the technology acquisition using the priority setting method in the ABC company. This involved the introduction of technology, for the development of an industry. This involved a decision that has to be made for whether to develop the technology internally or buy the technology from the external resources. The analysis of methods was carried out and an algorithm was developed to select both priorities of technologies. In this case, the critical factors were chosen, including the availability and level of external resources depending on the political situation and the

cost of technology acquisition. The ABC company team developed the feasibility attractiveness map. The parameters like feasibility and attractiveness are considered in preparing the map. The map was developed for both the technologies. The technology which has the majority score in both the parameters is the resulted one and that technology is chosen for the acquisition. The team of ABC company has developed morin matrix segmentation which has three regions. If the technology is able to occur in region A, then it is key technology with high feasibility and can work on itself. Otherwise, it has to go for the external resource. Even to develop it internally, it has to look the political situation of the country and it should also consider the cost of internal R&D. Based on all the factors, it has set priority to go for internal development of R&D. It has undergone many of the challenges mainly in improving the R&D of the company. They are: · The shortage of those employees who know the new technology. · The cost of the R&D became more than that was expected. But the company was successful in managing the new technology with the available staff and the cost by seeing some other alternatives of the same quality product. Results: The company has chosen the acquisition of technology internally by devolving the R&D of the company. This helped the company for placing itself in the competitive market. Questions: 1. What are the challenges faced by the company in developing the R&D of the company? Hint: Cost of R&D. 2. What was the step taken by the company to reduce the cost of R&D? Hint: Alternative.

OM0018-Unit-03-Technology Forecasting
Unit-03-Technology Forecasting Structure: 3.1 Introduction Objectives 3.2 Concept of Technology Forecasting Characteristics of technology forecasting Technology forecast method Principles of technology forecasting 3.3 Technology Forecasting Process

3.4 Need and Role of Technology Forecasting 3.5 Forecasting Methods and Techniques 3.6 Planning and Forecasting 3.7 Summary 3.8 Glossary 3.9 Terminal Questions 3.10 Answers 3.11 Case Study 3.1 Introduction By now, we are familiar with the concept of technology acquisition, advantages and disadvantages of technology acquisition. Previous unit also familiarised us with the alternatives for acquiring new technologies, and the reasons compelling a company for obtaining new technologies. We also learnt about the management of acquired technology that is required in all companies. We have also discussed about the measures of scale and mechanisms for acquiring technology. In this unit, we are going to define technology forecasting and discuss about the need for technology forecasting. We will also study about the role of forecasting in planning process. We are also going to discuss the different forecasting methods and techniques. At last we will see how to relate planning and forecasting. Objectives: After studying this unit, you should be able to: · Define technology forecasting. · Justify the need for technology forecasting. · Examine the role of forecasting in planning process. · Describe and apply different forecasting methods and techniques. · Relate planning and forecasting. 3.2 Concept of Technology Forecasting Before we start our discussion on ¶technology forecasting·, let us first define ¶forecasting·. Generally, ¶forecasting· refers to the prediction of future on the basis of available information. In the early days, traditional forecasts used to deal with the speed and power. They did not focus on the structures of the organisation. It was assumed that inventions of the future are not easy to predict. The forecasters were not focussed on evaluation of the forecast process. We can define technology forecasting as the process that predicts the future characteristics and timing of technology. The technology forecasting is done by considering the parameters, attributes and capabilities of technology. The forecasting process helps in effective management of technology. The forecaster need to have clear idea of the organisational goals and goals of the units for which the forecasting is prepared. Forecasting consists of the strength and weakness of the empirical sciences. The technology forecasting does not have any law because of the complexities that are associated with the systems. The complexities in technical, environmental, economical and ethical contexts are very difficult to remove. The forecaster has to take the historical examples in order to forecast in a better way.

Thus, we can say that technology forecasting deals with the prediction of future technological capabilities, attributes and parameters. The technology forecasting is done at the early stage of the project life cycle. The decisions made at the early stage influence the subsequent time of that project. Technological forecasting is an attempt to predict the way things are going to be done. We know that technology considers both hardware and software. The hardware includes the mechanical or physical hardware and software includes the procedures and methods for organising the human activity. In this regard, the technological forecasting is nothing but the future characteristics of useful machines, products, processes, procedures or techniques. 3.2.1 Characteristics of technology forecasting Generally, there are some characteristics that are associated with technology forecasting. We will now discuss them briefly. · A technological forecast relates to certain characteristics such as levels of technical performance (e.g., technical specifications including energy efficiency, emission levels, speed, power, safety, temperature, so on), rate of technological advances (introduction of paperless office, picture phone, new materials, costs, so on). · A technological forecast also relates to useful machines, procedures, or techniques. In particular, this is intended to exclude the items intended for pleasure or amusement from the domain of technological forecasting, since they depend more on personal tastes rather than on technological capability. · A technology forecast can be for short-term, medium-term, and long-term. 3.2.2 Technology forecast method There are some steps in deciding the technology forecast method. We will now discuss these steps: · Selecting information requirements: In this first step in deciding the technology forecast project, we have to determine the purpose of the forecast that the project has to serve. We require the following information in this case of forecast. · The rate at which new technologies replace the old one: This tells the rate at which the new technology replaces the old technology. The substitution analysis is helpful for the growth of the company. For example, the substitution of copper cable with the optical fibre cable. · Assistance in the management of R&D: The forecast helps to set the realistic goals for product or process of R&D project. Technology forecast also helps in setting the strategies for different technologies. Technology helps to improve the overall schedule of the R&D. · Evaluation of the present value of technology being developed: It is common that we provide the monetary value to the technology during its development. Use of technology forecast in the evaluation process involves the analysis. In this, we consider ¶when· and ¶to what extent· the technology will be commercialised. This involves the way profitability of a company is affected by competing and non-competing technologies. · Evaluation of the new products that can present threats or opportunities: The evaluation is done to verify whether the new product is causing the threats or causing the opportunities. · Analysis of new technologies that may change the strategies: This analysis helps to evaluate the improvements that a new technology offers for its internal strategies. · The elements of a forecast - the output: The data that is collected for the forecasting process defines the amount of information that is contained in the technology forecast. We can divide the information into four elements. · The technology being forecast (Qualitative element): This involves definition of ¶what to forecast· in the technology. It also defines whether it is forecasting a single approach of technology or the common technology. · The characteristics of the technology (Quantitative approach): As we have defined what to forecast, let us now learn how to represent the technology in the form of quantitative terms. There are both the functional and the technical parameters with this. The functional parameters are related directly to the user. The technical

parameters include the parameters like the inlet temperature, compression ratio. We cannot mix both the technical and functional parameters. · Time: While making any decisions regarding technology, we have to consider the time when we are forecasting for any of the project. The time of forecasting is concerned with the time the condition or event occurs in the future. · Probability: Usually, there are some uncertainities associated with the forecast. This probability factor defines the probability of achieving the fixed level capacity of an organisation. · Forecasting resources - the input: We have already defined what to forecast and what is required from the forecast. Now let us learn about the inputs that have to be fed as the resources to get the needs satisfied. · Assumptions: We can consider the assumptions to set the real factors. All the forecasts mainly depend on the assumptions. · Insight: This is helpful to start the qualitative element of the forecast. We have to use our minds and knowledge to form the relationship with forecast. This insight helps to merge divergent thinking with creativity. · Data: As many of the forecasting techniques depend on the past and are developed on the basis of past, so we need proper data that represents the technological performances of the past. It is required to forecast for the future. · Judgement: This involves the judgement that has to be taken by the forecaster when there is no data about the past. 3.2.3 Principles of technology forecasting Till now, we have studied about the technology forecasting and its characteristics. Now, we will discuss about the principles of technology forecasting, that are associated with rational approach to predict the future. Let us now discuss some principles of the technology forecasting. · Correct for biases in judgemental forecasts: The judgemental forecasts are strongly influenced by the biases, such as, desiring for the outcome. · Forecasts provided by efficient markets are optimal: Most of the times, the forecast that is developed on the past fails and this has to be developed on the basis of the present markets, so that we can have the optimum result at least. · Use the longest time series available: The principle of using longest time series involves using the longest time that is available and this conflict with using more relevant data. · Econometric forecasting models should be fairly simple: There should be simplicity in the forecasting models. · Do not use judgement to revise predictions from cross-sectional forecasting models that contain relevant information: We should avoid judgemental revisions and include the available information about job of a candidate in a quantitative model. · Theory should precede analysis of data in developing econometric models: The research on [1]parole predictions concluded that the theory should precede the development of predictive models. Self Assessment Questions 1. Predicting the _________ is an essential element of the planning process 2. All the forecasts mainly depend on the assumptions. (True/False)? 3. We provide the _____________to the technology during its development.

Activity 1: Consider that you are working in ABC Company as the team lead and you have to carry out the technology forecasting. Explain the principles of forecasting process. Hint: Forecasting resources-the input. 3.3 Technology Forecasting Process In the previous section, we learnt about principles of technology forecasting. Now, we will discuss the technology forecasting process. The forecasting process Twiss[2] has suggested some general elements for the technology forecast process. The forecasting process involves three elements that are shown in the figure 3.1.

Figure 3.1: The Forecasting Process As we can see in the figure 3.1, that there are three elements involved in the forecasting process, we will discuss them briefly. The first element is the input that has to be fed for the process. This involves the requirements that we have to fed, so the decision-maker of the forecast will gather the information like the assumptions and data, and feeds the information to the second element named as ¶forecasting techniques· which will process depending on the output that it has to contain. Lastly the resources that are required to define the forecast are identified. According to our working definitions, the main function of the technology is "[3]to lead the decision making process towards profitable solutions with minimum uncertainties.µ We can study technology forecasting in six phases, as given in the figure 3.2.

Figure 3.2: The Components of Technological Forecasting Process Let us now briefly explain these six phases. · Identification of needs: This is the first phase in technology forecasting process. After identifying the expected outputs and the objectives of the future, a thorough analysis is done in order to make sure the relevance of technology forecasting. This phase ends with a decision of technology forecast. · Prepare project: This is the second phase in technology forecasting process. In this phase, the forecasting activities that are planned and resources are allocated. The roles of each human resource are carefully prepared and explained. There are three human resources, clients, core tem and external participants. The client includes both customer and user of technology forecast. The core team performs the activities like defining references, writing documents, creating the structure of the forecast and filling it. The core team co-ordinates the efforts of experts from team, external participants and clients which help to develop an entire forecast. The external participants help in providing data, information and experience. The major sources of information and data are identified in this phase. · Define objectives: This is the third phase in technology forecasting. This phase once again goes through the objectives that are defined in the first and second phases. This phase decides the dimensions of the forecast. This includes both the normative and exploratory forecast. We use normative forecast, when the desirable future is seen and the normative forecast focus on finding the path, from the present to the desirable state. · Perform analysis and develop Technology Forecast (TF): This is the fourth phase in the technology forecasting process. This is the central part of the present research. · In this phase, we start with defining the boundaries of the technological system that has to be forecasted. This, in turn, involves definition of other four steps that are clearly shown in the diagram. The four steps in defining the boundaries include defining of the key functions and futures, defining system in relation with the laws of system incompleteness and energy conductivity, defining the system in terms of technological, social and environmental contexts and lastly the analysis of the drivers and barriers for the development of the system. · After completing the definition of the boundaries, we get a shape of problem and also the contradiction network. We have to capitalise this set of problems. This also includes the four steps as shown in the figure 3.2. The first step in this, is reformulating the technological barriers into the contradictions. The next step is, defining criticalto-X features, and third step involves the revising and reformulating the collected contradictions to match with

the critical to X features. The last step in this involves mapping of obtained contradictions as a network. The network consists of critical-to-X features, components of system and opposite values of features. · The next step in the analysis and develop TF is the ¶analysis of limitation of resources·. This helps to find the resources that are less and causes problems on the map. R&D helps to get the raw materials and solve the problem. This also helps in determining the time delays of the activities. · The next step in the analysis and develop TF involves; build the time diagram·. This uses the results that we get after the problem mapping. The different order of critical to X features is developed by considering the different contexts. · Validate results: The fifth phase in the technology forecasting process is to ¶validate results·. This includes the customer satisfaction with the results of TF. There are different processes that are associated with the evaluation of the results of the forecast. Our R&D uses the traditional method of evaluating the result of forecast. We can do peer review with the external experts and our colleagues in between working hours of the forecast to make the evaluation easy. · Application of TF: The last phase in the technological forecast is the ¶application of TF·. This depends mainly on the needs and the formulated objectives. We have seen the developing of TRF using the contradiction networking. This helps mainly in all the projects. Self Assessment Questions 4. Prepare project phase involves the forecasting activities that are planned and _________ are allocated. 5. Normative is used when the desirable future is not seen. (True/ False)? 6. Application of TF depends mainly on the needs and formulated ________. Activity 2: Consider that you are the manager involved in the process of forecasting, in a company. Suggest the phases in which you will carry out the technology forecasting process. Hint: Application of TF. 3.4 Need and Role of Technology Forecasting In the previous section, we learnt about the technology forecasting along with the diagram. In this section, we will analyse the need for technology forecasting, and role of technology forecasting in planning process. Need for technology forecasting Today, we are mainly focussing on the corporate strategies, as the pressure on R&D planning is increasing. The technology forecasting is needed for the long-term planning process. Technology forecasting helps us in finding out the opportunities at earlier stage, and to evaluate the significance of these opportunities. Many different industries utilise technology forecasting for different purposes. They use it to: · Identify and evaluate new technology-based products. · Make better technology investment decisions and projecting technology advances by providing information. · Define market needs for new technologies. · Project market adoption rates for new technologies. · Identify critical technologies and gaps. · Formulate strategic models for future development.

Role of Forecasting in Planning Process As we have already analysed the need for technology forecasting, we will now discuss the role of forecasting in planning process. · The forecast serves as an input to the process of making plans and decisions. Forecasting plays many roles in planning. Let us briefly describe these roles. · The forecast identifies limits beyond which, it is not possible to go. · The forecast establishes feasible rates of progress, so that the plan can be made to take full advantage of such rates; conversely, it does not demand an impossible rate of progress. · The forecast describes the alternatives which are open and can be chosen from. · The forecast indicates possibilities which might be achieved, if desired. · The forecast provides a reference standard for the plan. The plan can thus be compared with the forecast at any point in time, to determine that it can still be fulfilled, or, because of changes in the forecast, it has to be changed. · The forecast furnishes warning signals, which can alert the decision maker that it will not be possible to continue present activities. Note that the purpose of the forecast is to improve the quality of our decisions related to selection of an alternative from available alternatives, and not to force us to accept a particular decision. Today, technology forecasting has become popular in the corporate world. All companies including large as well as small depend on technology forecasting for their survival. Large companies are using technology forecasting for centralising the efforts of R&D and planning for developments of new products; at the same time, the survival of smaller companies depends on technological innovation by using appropriate methods of technology forecasting. Self Assessment Questions 7. The technology forecasting is helpful for the _________planning process. 8. The forecast serves as an input to the process of making plans and decisions. (True/False)? 9. The forecast provides a _________standard for the plan. 3.5 Forecasting Methods and Techniques In the previous section, we learnt about the role of forecasting in planning process. Let us now study about the different forecasting methods and techniques. We can classify the technology forecasting methods into two methods, which are, exploratory, and normative forecasting methods. These methods include some techniques too. Let us see these methods and techniques in the figure 3. 3.

Figure 3.3: Different Technology Forecasting Methods We will now briefly describe the different forecasting methods and techniques depicted in the figure 3.3. · Exploratory Methods: Exploratory methods are primarily concerned with the analysis of historical data. Selected attributes such as functional performance, technical parameters, economic performance, and so on are plotted against time. Since, it is usually assumed that progress is evolutionary and that technological progress is not random, it is possible to generate characteristic curves or patterns from the data and from these patterns forecasts can be made with varying degrees of certainty. The exploratory methods include methods like the intuitive forecasting, extrapolation, growth curves and technology monitoring. Let us study these methods and techniques in brief. · Intuitive forecasting: This is the most widely used forecasting method. This method assumes that the experience and education of experts is sufficient to forecast the vectors of expansion and evaluation in a specific field. The intuitive method mainly involves two techniques that are the Delphi technique and the opinion polls technique. -Delphi technique: The Delphi technique involves the comparisons of expert projections of future technical developments. This helps us in projecting the future technical and market developments. This also involves the uncovering of the fundamental differences in opinion. This technique also identifies the unconventional ideas. -Opinion polls: The opinion poll technique involves the opinion of different experts. This technique involves the joint assessment of different ideas. This technique also helps us in knowing the new technologies and evaluating many of the options of the new technologies.

· Extrapolation technique: The extrapolation is the most usual method of forecasting in exploratory methods. The extrapolation method involves the extension of the present methods for the future. We can classify the techniques in extrapolation as the linear extrapolation and the exponential extrapolation. -Linear extrapolation: The linear extrapolation involves the creation of tangent line at the end of known data and then extending the line beyond that limit. Linear extrapolation gives the good results when this is extended approximately as the linear function and not too far behind the known data. -Exponential extrapolation: The exponential extrapolation is the non-linear extrapolation. This includes the historical trends of a particular period of time and these trends are extended for the future. This is reliable, simple and inexpensive. · Growth curves: This is another method included in exploratory methods. The growth curves are reformulated from a time basis to an observation basis. This includes the numerous time series of growth behaviour that are collected and categorised according to data characteristics. The growth curve includes the pearl curve and gompertz curve techniques. -Pearl curve: The pearl curve is an inhibitive model of technology growth. Pearl curves are produced, when there is some competitive situation between the two technologies with same growth rates. -Gompertz curve: The gompertz curve uses the pearl curve to show the pattern in which the maturing technologies approach the development limits. This is the preferred model for the technology adoptions that are driven by the technical superiority of the new technology. · Technology monitoring: Technology monitoring is also an exploratory method. We can define this method as a method that looks after the monitoring of the technologies. This is based on analysis and meaning of signals of change. Growth curve assumes the good continuity between the past and future and they are incapable of predicting the breakthroughs. · Normative Methods: We have discussed about the exploratory methods and techniques. We will now discuss the normative methods of forecasting. The normative forecasting provides the budgetary decision in the technological area. The normative approach includes the well organised attempts to allocate the money, manpower and the other resources, on a rational basis, that might affect the technology forecast of the future. The normative methods include the three methods, namely, relevance trees, morphological analysis and mission flow diagrams. · Relevance tree: The relevance tree includes the hierarchical listing of the tasks and the alternatives. In this tree, we consider each branch as a goal. The relevance tree is helpful for all the planners to systematically assess all the interlinked technologies. · Morphological analysis: Morphological analysis involves systematic evaluation of all possible combination of solutions to the individual parts of a system. This involves the breaking down of main task into smaller tasks and treating all the individual tasks separately and finding the solutions for that. · Mission flow diagrams: The mission flow diagram indicates the mapping of all the substitute routes or sequences for finishing a given task. We need to determine the important steps on each route and also identify the problems and costs related with each route. Then, we can derive the performance requirements for every relevant technology and we can use the same as normative forecasts. Self Assessment Questions 10. The extrapolation method involves the ____________ of the present methods for the future also. 11. The pearl curve is an inhibitive model of technology. (True/False)? 12. Exploratory techniques are primarily concerned with the analysis of _________ data. Activity 3: Consider that you are working under the manager who is incharge of technology forecasting in the company. Your manager has asked you to list the different technology forecasting methods. Prepare a

list of such methods that you will follow. Hint: Morphological analysis. 3.6 Planning and Forecasting In the previous section, we have learnt in detail about the methods that are involved in the technology forecasting. In this section, we will learn about the planning and forecasting. The planning and forecasting provides us the tools that anticipate demands and respond quickly when the demand changes. Planning and forecasting allows us to communicate through the entire supply chain of a company. Nowadays we have found that there is time lag between the lead time of the event and occurrence of that event. This lead time is the main reason for planning and forecasting. If the lead time is zero or very small, there is no need for planning. If the lead time is long and the outcome of the final event is conditional on identifiable factors, planning can play an important role. In such situations, forecasting is needed to determine when an event will occur or a need arise, so that appropriate actions can be taken. A lay person may question the validity and efficacy of a discipline aimed at predicting an uncertain future. However, it should be recognized that substantial progress has been made in forecasting over the past several centuries. There are a large number of phenomena whose outcomes can now be predicted easily. The sunrise can be predicted, as can be speed of a falling object, the onset of hunger, thirst of fatigue, rainy weather, and many other events. The evolution of science has increased the understanding of various aspects of the environment and consequent by the predictability of many events. Successful forecasting is not always directly useful to managers and others. More than 100 years ago, Jules Verne correctly predicted such developments on submarines, nuclear energy and travel to the moon. Similarly, in the mid 1800s, Charles Babbage not only predicted the need for computers, but also proposed the design of computer. In spite of the accuracy of these forecasts, they were of little value in helping organisations to realize those possibilities or achieve greater success. We should also know the distinction between uncontrollable external events (originating with the national economy, governments, customers, and competitors) and controllable internal events (such as marketing or manufacturing decisions with the firm). The success of a company depends on both the types of events, but forecasting applies directly to the former, while decision making applies directly to the latter. Planning is the link that integrates them. To draw a line between business forecasting and technological forecasting, business forecasting uses more quantitative techniques, whereas technological forecasting uses more qualitative techniques. It is not that business forecasting does not use qualitative techniques, but it is viewed with relative importance. In fact, it also depends on the factors forecasted. In business forecasting, the stress is on physical quantities, whereas in technological forecasting it is on the behavioural issues. Self Assessment Questions 13. The _________ is the main reason for planning and forecasting. 14. To draw a line between business forecasting and technological forecasting, business forecasting uses more qualitative techniques. (True/False)? 15. Planning and forecasting allows us to communicate through the entire ___________. 3.7 Summary In this unit, we discussed about the technology forecasting, which is the prediction of technology. We also analysed that the main aim of technology forecasting is to lead the decision making process towards profitable solutions with less number of uncertainties. We also studied the six different phases of technology forecasting including identification of needs, preparation of project, defining objectives of technology forecasting, analysing and developing technology forecasting, validating the results and applying technology forecasting.

We also noticed that technology forecasting helps to find the opportunities at the earlier stage of the project. Different projects use technology forecasting in different ways, depending on the duration of forecasts. We also studied the technology forecasting methods including the exploratory and normative methods. We also discussed about the planning and forecasting process that helps to communicate through the entire supply chain. 3.8 Glossary Term Inhibitive Description It means holding back. Forecasts for 10-20 years (a long time for the emergence of totally new technologies). Forecasts for 2-10 years. Pertains to giving norms or rules. The act of developing again. Forecasts for usually one year or less.

Long-term technological forecasts Medium-term technological forecasts Normative Reformulating Short-term technological forecasts 3.9 Terminal Questions

1. Describe some characteristics of technology forecasting. 2. Explain in brief about the six phases in technology forecasting process. 3. Explain in brief about the need for technology forecasting. 4. Write a short note on the role of technology forecasting in planning process. 5. Explain the different forecasting methods. 6. Give a short note on planning and forecasting. 3.10 Answers Self Assessment Questions 1. Future 2. True 3. Monetary value 4. Resources 5. False 6. Objectives 7. Long-term 8. True 9. Reference

10. Extension 11. True 12. Historical 13. Lead time 14. False 15. Supply chain Terminal Questions 1. Refer to section 3.2 Concept of Technology Forecasting. 2. Refer section 3.3 Technology Forecasting Process. 3. Refer section 3.4 Need for Technology Forecasting. 4. Refer section 3.5 Role of Forecasting in Planning Process. 5. Refer section 3.6 Forecasting Methods and Techniques. 6. Refer section 3.7 Planning and Forecasting. 3.11 Case Study This case study is about improving the forecasting abilities of an ABC software development company. The ABC company delivers the sales, demand and call volume forecasts for more than 200 customers. The company has added more CPU servers because of the increasing demands and it also wanted to expand its business into new markets. The point of sale forecasts requires more processing power, but the ABC company didn¶t have any other that facility. In order to facilitate more processing power, the cost effective solution was developed. The company has introduced a windows azure platform that is able to provide the unlimited processing and storage capacity. The ABC Company forecasted that it requires the 10 times more capacity of the presently required storage. The windows azure platform aims at providing the excellent foundation for the online product and service offerings. This platform helped to gain more competitive advantage over the other products in the present market . This helped to satisfy the customer to the larger extent. There was also an increase in the information technology of the field. Challenges: The ABC company in the point of sale was not having more processing power. There were more demands for the CPU. Results: The introduction of the windows azure has mainly helped to improve the processing power Questions: 1. What are the challenges faced by the ABC company?

Hint: Processing Power. 2. What are the main advantages of introduction of the windows azure platform? Hint: Competitive advantage.

OM0018-Unit-04-Technology Strategy and Competitiveness
Unit-04-Technology Strategy and Competitiveness Structure: 4.1 Introduction Objectives 4.2 Technology Strategy Technology strategy and management Elements of an accessible technology strategy 4.3 Innovation Management 4.4 Competitive Advantage Components of competitive advantage Creating competitive advantage using value chain 4.5 Technology Management Evaluation or Assessment 4.6 Summary 4.7 Glossary 4.8 Terminal Questions 4.9 Answers 4.10 Case Study 4.1 Introduction By now, you must be familiar with technology forecasting and the need for technology forecasting. Apart from this, previous unit also familiarised us with the different forecasting methods and techniques and also with the relation of the planning and forecasting process.

In this unit, we will learn about the technology strategy, which involves the strategies that have to be followed for managing the technology. We will also9 study about the innovation management and the components of competitive advantage. We will analyse how a firm can create competitive advantage using value chain. We will also see how to evaluate the technology management in an organisation. This unit will enable us to analyse that technology strategies help us to maintain the competitive advantage. The competitive advantage helps to capture the competitive market. Objectives: After studying this unit, you should be able to: · Explain the technology strategy and innovation management. · Explain competitive advantage. · Mention the components of competitive advantage. · Create competitive advantage using value chain. · State how to evaluate/assess the TM in an organisation. 4.2 Technology Strategy Let us first understand the concept ¶technology strategy·. We know that a strategy is a long term view that describes a high level framework. This high level framework describes where the organisation needs to be in the future years. We can define technology strategy as a planning document that explains how technology should be utilised as part of an organisation·s overall business strategy. The document is usually created by an organisation·s technology manager and should be designed to support the organisation·s overall business plan. Most of the organisations use technologies in product and services· generation, but all the organisations will not gain the positive competitive advantage from the technologies. There are many factors in competition, and technology is only one factor among them. Yet, some firms effectively use technology as a competitive advantage, and others do not. One important factor in the successful use of technology is the role of general management in technology strategy. In particular, it has been management·s ability to foster corporate core technical competencies. The central idea here is that a business can be developed around a long-term, consistent focus on a core technological competency. What it means, is to have a core corporate technical competency, to lead in both innovating new-technology products and improving manufacturing quality and lowering cost of these products. With this, not only products can be improved, but also manufacturing process can be improved in future generations of technology. 4.2.1 Technology strategy and management After studying the meaning of technology strategy, let us learn about the relationship between the technology strategy and management.

The role of management in building competitive advantage for an organisation, depends on the technology strategy. It is better to understand the intended strategy of general management. We can see that there are three aspects of relationship between the management and technology strategy. These are: · The view of management of the impact of general management on the business and business strategy. · The management checks whether there is any chance of discerning the technology strategy. · The management checks whether there is any chance of discerning particular orientation towards new markets, developing superior products and pursuing learning curve and cost leadership. The managers play an important role in the decision making process of the technology. The decision making process involves many problems in sustaining and building competitive advantage. In the case of competitive markets, technology intensity introduces the layer of complexity. 4.2.2 Elements of an accessible technology strategy Till now we have seen how the technology strategy and the management are related. Now, we will study about the elements of an accessible strategy. The accessible technology strategy defines how the technology fits within the organisation. This is mainly helpful in integrating the technology into the business plan and business. It also makes sure that the accessible technology strategy is aligned with the business needs. An accessible technology strategy includes some elements. Let us have a look at these elements in figure 4.1.

Figure 4.1: Elements of an Accessible Strategy We will now have a brief discussion on the elements depicted in figure 4.1. · Vision statement: This involves the creation of a unique statement that defines the role of accessible technology in the organisation and how it supports the organisation·s overall vision of accessible technology objectives. We have to restate the accessible technology vision, if the organisational vision already provides the foundation for creating accessible objectives. · Objectives: The objectives define the success metrics and clarify the details of vision statement. The objectives use the vision of the accessible technology.

· Expenses and budget: This involves the clarification that is done in regard to the expenses, and describes the funding resources. This explains which expenses should become a part of overall technology purchase, and which should come under a separate budget. Some organisations include the assistive technology product costs in the main centralised accommodation budget, and some companies deduct these expenses from the individual technology budgets of each department. It is important for us to clarify the budget decisions and see that the funds are allocated appropriately. · Ownership: The ownership defines the responsibilities of the team members in the project. The ownership also plans the execution of the project. There should be one committee to see whether the execution of the plan is moving correctly or not. Self Assessment Questions 1. Technology strategy is a _____________that explains how technology should be utilised as part of an organisation·s overall business strategy. 2. The objectives define the success metrics and clarify the details of vision statement. (True/False)? 3. Vision statement involves the creation of a _________ statement that defines the role of accessible technology in the organisation. Activity 1: Consider that you are the project manager in the ABC Company and you want to access the technology strategy. List the elements that you will see in accessing the technology strategy. Hint: Vision Statement. 4.3 Innovation Management Previous section familiarised us with technology strategy. This section will familiarise us with ¶innovation management·. We can define ¶innovation management· as the systematic processes that help the organisations in developing new and improved products, services and business processes. This involves the use of creative ideas of an organisation·s employees that brings new innovations to the market place, quickly and efficiently. In business, innovation should not be only limited to the big ground breaking ideas, creative workshops and product based companies. Innovation is often small, incremental changes to products, services and processes. The innovation involves all the managers from different departments. This needs to be planned and managed as a core business covering all parts of a business. This needs to be integrated at the strategic and operational levels. The activities of the innovation need to be driven by the strategy and current business imperatives. The successful innovation culture consists of all the aspects of a business, and these aspects have to be managed effectively and efficiently like any other core business. Innovation can be built into business, at three levels. The three levels are the annual business planning process, quarterly innovation and day-to-day activities.

Innovation is managed through some sort of platform or application. There are two types of innovation tools that are, an electronic suggestion scheme, and a management system controlling the innovation process. The management of the innovation system need to be given to the senior management to control the overall system of innovation. The best practices and tools are applied consistently and appropriately across the organisation. Any platform should encourage for the learning activity as a core feature. Installing the innovation culture in any of the company has leaders and teams with ability and commitment. In order to create culture of continuous innovation, the organisation requires leadership and commitment from the senior management team. The management team also see that some staff members in the organisation are rewarded for the innovative ideas they put in. The senior management need to encourage the innovative ideas from the staff. Self Assessment Questions 4. Innovation management is the __________ processes that help the organisations in developing new and improved products. 5. The successful innovation culture consists of only few aspects of a business. (True/False)? 6. The management of the innovation system need to be given to the ____________________ to control the overall system of innovation. 4.4 Competitive Advantage After innovation management, we will now study about the competitive advantage. We can define ¶competitive advantage· as the condition in which a company operates in a more efficient manner and higher quality when compared to its competitors in the market. Technology·s ability to redefine competitiveness at all levels has long been recognised by philosophers, scholars, and businesspeople from Adam Smith to John Kenneth Galbraith to Michael Porter to Bill Gates. At industry levels, technology-driven impacts are obvious. There are many examples for technology driven systems that include the solid state devices that had replaced the vacuum tubes and aircrafts that had replaced the railroads. Successes and failures are also obvious at the firm level. In a simplified view, we can measure the competitiveness of a company by the economic rents derived from certain capabilities (bundles of combined know-how and resources) which it possesses. Two postulates are easily accommodated by conventional strategic management: · A firm·s competitiveness is defined largely by specific competitive advantages. · A primary purpose of strategic management is creation of competitive advantages. Managing technology plays an important role in the competitive success of an organisation in the free market economy. Managing technology plays an important role in making decisions and policies that contribute to the firm·s competitive advantage.

We can recognise the competitive advantage of the organisation by seeing at the way they deliver the products. The customers look into some factors of the product when they are taking the products or services. These factors also affect the competitive advantage of the organisation. Let us briefly describe these factors. · Price: A lower price is perhaps the most obvious reason why customers choose one product or service over competing alternatives. One must be careful to point out that from the customer·s perspective, normally the price is important. Most of the times, the customers does not know the previous price of the product in the market. There is a possibility for the lower price due to international competition or internal or government subsidies. If we talk about industrial customers; when they go for long-term arrangements with the suppliers, they will know about the time of the lower price and they can gain the advantage. · Quality: Quality is another term that is widely used so much that hawse have to ask what is meant specifically by a customer who claims to have purchased a particular product or service over competing alternatives because of its higher quality. In this framework, quality will refer to one of two different meanings that are given below: ð Higher reliability at a given level of performance, i.e., conformance to specifications. ð Higher level of performance. Having made this assertion, we must recognise that there is an aesthetic dimension to quality as well. For example, people will often prefer natural leather or wood materials to plastics or other synthetic materials because of their higher quality, without regard necessarily to either reliability or performance. · Reliability: Reliability is the ability of a product or service to perform at a specified, promised level, over a reasonable useful life, under normal conditions of use. It is not, however, expected to perform at levels higher than what was promised. A product or service is said to be defective, if it does not meet the customer expectations. The customers purchase the products or services for the second time, if they find that the products are more reliable, and are with fewer defects as compared to the products used for the first time. There are, however, two different ways to achieve high reliability. One is by inspecting the product and by identifying and removing defects from the product-services stream before they reach the customer. The other is, by improving production processes and getting them under control. There are costs that result from poor reliability, such as, the costs from waste, scrap, rework, warranties, loss of customer goodwill, and product liability. Improving reliability also covers costs such as the investments needed to inspect or build it in. In the latter case, getting production processes under control may require process simplification and redesign or the implementation of an effective statistical process control (SPC) program, but if done well, it should produce significant savings in all the cost categories resulting from poor reliability. · Performance: Performance level is referred to a feature, property or characteristic of a product that are valued by the customer. The customer compares the performance of the product with its competitors before making an order for the purchase. Performance has multiple dimensions depending on the specific product or service and the customer or market segment. For industrial customers of fabricated parts, dimensional tolerances are a performance dimension that is often cited along with surface finish (corrosion resistance-durability), weight, and so on. In the case of process industry customers, purity and uniformity might be relevant performance dimensions. The range of performance dimensions is much wider for final consumers.

· Availability: Availability is a time-related competitive advantage. All other things being equal, many customers would prefer the competitive alternative that is available soonest instantaneously, if possible. Firms with new products which have no competing alternatives available until competitors can copy or catch up to or leap-frog over them, have a special availability advantage. For industrial customers operating in a just-in-time mode, availability translates into dependable delivery at precisely the scheduled time. · Customer Service: Customer service enhances the utility of a product or the social relationships that complement its sale and use. Traditional forms of customer service include applications engineering, training of employees, and service-maintenance contracts. Financing services (time payments, leasing, trade-ins, etc.) that enable the customer to purchase the product are also included. Good customer service can also make up for a lot of customer ill will caused by product defects. · Attractiveness: Attractiveness applies principally to consumer products, although even industrial customers may be turned off by a product·s unattractive appearance. Attractiveness obviously encompasses style and has an aesthetic component that transcends the annual style changes of, for example, the fashion apparel industry, although what is perceived as being attractive may have some cultural basis. · Awareness: Awareness is a factor in all other competitive advantages, as well as, a possible reason in its own right why customers choose one product or service over competing alternatives. If customers simply know more about one product or service than competing alternatives, they may choose it because of the comfort level that knowledge brings them compared to the relative uncertainty of the alternatives. If the knowledge is positive and is repeatedly reinforced through experience and marketing or advertising activities, brand-name loyalty may be created in customers who continue to choose it apart from any objective evaluation of the actual facts. On the other hand, even if one product or service has a lower price, greater reliability, higher performance, sooner availability, better customer service, or more attractive designs than competing alternatives but customers are not aware of these facts, they cannot influence customers· choices. · Stability: Stability of long-term relationships probably applies only in very specific situations where-again-that stability provides a comfort level to customers which they prefer over the relative uncertainty of short-term or temporary supplier-customer relationships. For example, in the case of strategic materials or-recently-petroleum, the stability of long-term supply contracts may be preferred by a customer over temporary supply arrangements that offer lower prices or other advantages. This stability may also apply to long-term social relationships between customers and suppliers in cases where customers value the relationship itself apart from the product or service the supplier is providing. Customers of today expect high reliability and low prices. The winning competitor must have either the lowest price or the highest reliability, or achieve one of the other competitive advantages that customer·s value. 4.4.1 Components of competitive advantage As we are studying about competitive advantage, we will now study about its components. We know that development of the strategic marketing plan is very difficult in the present competitive market. The operational roadmap becomes the valuable tool as it concentrates on achieving the specified goals and targeted buyers. There are some components that are associated with the competitive advantage.

· Identify your targets: It involves the identification of the customers. The company has to buy the needs and the efforts must be shifted from the reactive, product driven to the pro-active, market driven orientation. · Market driven versus marketing driven: market driven companies are the companies that aim at fulfilling the customer needs and they play a major role in the production planning. The market driven companies listen to the customers and they focus at production decisions like quantities, packaging and stylish quality. The market driven companies also develop the marketing plans with some objectives and goals. · The marketing driven companies focus on consumer awareness by promotion like advertising, aggressive programming and innovative point of sale material. · Better and faster: It is not a good marketing plan if we cannot maintain the competitive advantage. In the present competitive market of today the marketing opportunities are more time sensitive. · Action calendar: After finalising the objectives and strategies, you need to create an action calendar. There are some guidelines in creating the action calendar, which are: ð We have to estimate the time frame for each objective over the next year·s calendar, and we should know the season·s conflicts that would arise in the future and affect the staff, time and financial commitments. ð It is important to involve the skilled members of your staff in preparing the action map, so that we get more enthusiasm and new ideas and increased results. ð It is important to check the frame regularly, in order to monitor the progress and deal with unexpected changes. ð Lastly, you have to adjust with the action calendar that is prepared. · The marketing budget: This component of competitive advantage involves the budgeting plan, and it depends on the cash flow requirements and the net profit. We prepare this plan by considering the previous year·s expenditures. We have to ensure that our marketing budget adequately supports the marketing objectives that we want. 4.4.2 Creating competitive advantage using value chain After studying about the components of competitive advantage, let us now study about creating the competitive advantage using the value chain. According to [1]Michael E Porter, the value chain is "a systematic way of examining all the activities a firm performs and how they interact«.for analyzing the sources of competitive advantage." Michael porter has identified many of the activities that are common to all firms. We can use Porter·s value chain, to organize all the activities of a firm, into categories of primary and support activities. Primary activities constitute the processes by which firms receive inputs (inbound logistics), convert those inputs into outputs (operations), provide those outputs to customers (outbound logistics), persuade customers to buy the outputs (marketing and sales), and support customers in using the outputs (service). Support activities are processes which provide support to the primary activities and to each other in terms of purchasing inputs (procurement); developing new and improved ways of doing activities (technology development); dealing with personnel

(human resource management); and general management, accounting, finance, and other activities which support the entire organisation rather than individual activities (firm infrastructure). You can see these value chain activities in figure 4.2.

Figure 4.2: Value Chain Activities As per figure 4.2, primarily there are two activities associated with the value chain activities. The two activities are primary activities and the support activities. Now let us study in brief about the primary activities. · Primary activities: The goal of primary activities is to create the value that is more than the cost of providing the product or service and generates the profit margin. These activities play an important role in developing the competitive advantage. We can further divide the primary activities into five activities. · Inbound logistics: It includes the activities like receiving, warehousing and inventory control of input materials that has to be supplied for the process. · Operations: The operations are the value creating activities that has the ability to transform the inputs into the final product. · Outbound logistics: These are the activities that satisfy the customer. This includes giving the finished product to customer. This includes the activities like warehousing, order fulfilment and so on. · Marketing and sales: Marketing sales include the activities like getting buyers to purchase the product, advertising, promotion, pricing, putting sign boards and so on. · Service: Service activities are the activities that maintain and increase the products value including customer support, repair services and so on.

Till now we have learnt about the primary activities. Now let us now learn about the support activities in the value chain activities. · Support activities: These activities, as the name indicates, are the activities which support many of the processes. These activities can be viewed as "overhead" but many of the organisations used them to develop the competitive advantage. We can classify the support activities into four activities. · Procurement: This is the activity that provides the raw materials and other inputs that are required for the value creating activities. · Technology management: These are the activities that are related to the research and development activities, technology development activities that are used as a support for the value chain activities. · Human resource management: These activities are related to human resources. This includes the activities like recruiting, development and compensation of employees. · Firm infrastructure: This includes the activities that are related to the infrastructure of an organisation. This includes the activities such as finance, legal and quality management. After the identification of the activities of the value chain, the value chain analysis takes place. Value chain analysis After defining the activities differently in the chain, we have to define the linkages between these activities. A linkage will be present, if the performance of one activity affects the other activity. There need to be proper coordination and optimisation of the linked activities. The better understandings of the linkages helps in make or buy decisions. The value chain plays an important role in making the outsourcing decisions. The value system The firm·s value chain links to the value chains of upstream suppliers and downstream buyers. This both activities result in the larger stream activities known as the value system. The development of the competitive advantage of the organisation depends on the value chain system. Self Assessment Questions 7. A firm·s competitiveness is defined largely by specific _____________. 8. The operational roadmap is the valuable tool as it concentrates on achieving the specified goals and targeted buyers. (True/False)? 9. Outbound logistics are the activities that satisfy the _____________. Activity 2:

Suppose that you are working in the company as a team lead and your company is planning to gain the competitive advantage. Your manager has asked you to list the activities involved in the value chain process. Prepare the list for the same. Hint: Support activities. 4.5 Technology Management Evaluation or Assessment After a detailed discussion on competitive advantage, we will now discuss about the technology management evaluation or assessment. We can define technology assessment as the process of assessment that aims at collecting information about the present and future state of technology development. This helps in evaluating the importance of different technologies in the competitive environment. This also helps in finding the strength of a firm in each technology. There are some main tasks associated with the technology assessment. Let us briefly describe these tasks. · Identification of the technologies involved: The identification of the technologies involved in technology assessment includes the identification of the technological knowledge and skills. The technological knowledge and skills influence the position of the organisation in the present as well as the future market. We have to follow some criteria to identify the technologies. These criteria are: ð The detailed analysis of the organisation·s technological structure: This includes the detailed analysis of the organisation·s technology structure. This include: s The identification of the product technologies such as the technologies in the product, technologies used in design phase of the product. s The identification of the production process technologies that are used. s The identification of the support technologies that are used to perform certain activity in the enterprise. This also helps in identifying the technologies that are used in the value chain activities. ð Assessing the technologies that have impact on the future: The second criterion is to include the technologies that may have impact in the future. We can call these future technologies as the emerging technologies. Technology forecasting helps us to identify the emerging technologies. · Analysis of the competitive impact of technologies: This involves the analysis of the competitive importance of each technology in the market. We have to consider some factors while doing analysis. These factors are: ð To what extent the technologies are relevant to sustaining organisation·s competitive factors. ð To what extent the competence will be critical in future competition. The competitive impact analysis provides an overall assessment of the competitive importance of each technology.

· Technological capability assessment: The technology capability analysis provides the capability of an organisation in each technology. We can achieve this by comparing the technological capabilities with its market competitors. This involves some variables, as given below: ð Research and development funding. ð Expenses of technical innovation sustained in other technical functions. ð Human resources. ð Equipment and tools. ð Patents and other intellectual properties. ð Allocation of funds. Self Assessment Questions 10. Technology assessment is the process of _________________ that aims at collecting the information about the present and future state of technology development. 11. The support technologies are used to perform certain activity in the enterprise. (True/False)? 12. The competitive impact analysis provides an overall assessment of the _____________________ of each technology. Activity 3: Suppose you are manager in the company. Prepare a list of the tasks that you will follow to evaluate the technology management. Hint: Technology capability assessment. 4.6 Summary In this unit, we have made an effort to understand the technology strategy and competitiveness. We discussed that the technology strategy explains how the technology has to be utilised as a part of total business strategy. We analysed that accessible technology strategy has some elements, which include the vision statement, objectives, expenses and budget and also the ownership. We also analysed the relation between technology strategy and management. We also had a brief discussion on the innovation management. While discussing, we analysed that the innovation is managed through some sort of platform or application. We also understood that we can build innovation at three levels, and the senior management has to take care of innovation process. We have seen the competitive advantage that plays an important role in today·s competitive market. We also discussed about the creation of the competitive advantage by value chain process. The value chain process included the primary and support activities.

Finally, we have seen the assessment of the technology management that included three tasks, that is, the identification of technology, analysis of competitive impact of the technologies and also the technological capability assessment. 4.7 Glossary Term Innovation management Framework Aesthetic Statistical process control (SPC) program

Description It is the management of the new inventions and discoveries. It refers to the rigid structure containing something. It is the branch of philosophy that deals with the nature of beauty.

The application of methods to find the variability of the processes.

4.8 Terminal Questions 1. Write a short note on technology strategy. 2. Explain in brief about the innovation management. 3. What are the components of competitive advantage? 4. Explain the activities of competitive advantage. 5. Briefly explain the technology management evaluation. 4.9 Answers Self Assessment Questions 1. Planning document 2. True 3. Unique 4. Systematic 5. False 6. Senior management 7. Competitive advantages 8. True 9. Customer 10. Assessment

11. True 12. Competitive importance Terminal Questions 1. Refer section 4.2 Technology Strategy. 2. Refer section 4.3 Innovation Management. 3. Refer section 4.4 Competitive Advantage. 4. Refer section 4.4 Competitive Advantage. 5. Refer section 4.5 Technology Management Evaluation. 4.10 Case Study Case Study on Gaining Competitive Advantage This case study is about increasing the competitive advantage of the ABC company in the software market. The founders of the ABC company had a vision to build the competitive advantage of the organisation around delivering technologies for the new world. The company was mainly focussing on the technical advantage with its unique organisation structure and the business development approach. To gain the competitive advantage with Microsoft corporation this company employee has to learn how the technologies work and also the new skills and technologies. This also recruited the new employees those who have the passion to learn new technologies. There was more amount of finance that was spent on training the employees. Many of the employees got certified with Microsoft those who had very good basic technical knowledge. Then the company now it¶s able to capture the competitive market. It has rewarded the certified individuals with the high salary hikes. There are some benefits as the number of certified employee¶s increased in the company. The benefits are: · Improved customer satisfaction since the certified team was able to provide the quality product. · The company was able to capture the new market with the new technologies. · In overall the certified employees helped to gain the competitive advantage. Results: The company came with big success in gaining the competitive advantage. Questions: 1. How did the ABC Company gain the competitive advantage? Hint: Training the employees about the new technologies.

2. What are the benefits that the ABC Company got after the increase of the certified employees in the ABC Company? Hint: Captured the new market.

OM0018-Unit-05-Technology Adoption, Diffusion and Absorption
Unit-05-Technology Adoption, Diffusion and Absorption Structure: 5.1 Introduction Objectives 5.2 Technology Adoption 5.3 Technology Diffusion Importance of technology diffusion Perspectives of innovation diffusion process Activities necessary for diffusion process 5.4 Technology Absorption Role of technology absorption Benefits of technology absorption Constraints in technology absorption 5.5 Technology Package and Technological Dependence 5.6 Indian Experience in Technology Absorption Efforts 5.7 Issues Involved in the Management of Technology Absorption and Government Initiatives Issues involved in the management of technology absorption Government initiatives for technology absorption

5.8 Summary 5.9 Glossary 5.10 Terminal Questions 5.11 Answers 5.12 Case Study 5.1 Introduction By now, you must be familiar with the concepts of technology strategy and competitiveness. In the previous unit, we discussed about the technology strategy and elements of accessible technology strategy. We studied about the innovation management. We also discussed about the components of competitive advantage and analysed how to create competitive advantage using value chain, and how to evaluate the technology management. We know that the technology adoption, diffusion and absorption help in acquiring the new technologies. So, in this unit, we will study about them. We will also learn about the technology adoption plan that is needed for the implementation of the technology plan. We will discuss about the technology absorption and constraints in the technology absorption. We will also understand the issues related to technology absorption and the experience of India in technology absorption. We will also study about technology diffusion. Without proper management no technology can be absorbed so at last we will study about issues related to the management of technology absorption and government initiatives for technology absorption. This unit will enable us to understand that without the use of technology adoption, we cannot get any of the technologies and without the diffusion, technology cannot spread. Finally the technology absorption helps us to absorb the technology. Objectives: After studying this unit, you should be able to: · Explain the technology adoption and technology adoption plan. · Explain the technology diffusion. · Explain the technology absorption. · Summarise the technology package and technological dependence. · Describe Indian experience in technology absorption efforts. · Discuss the issues involved in management of technology absorption and government initiatives. 5.2 Technology Adoption As we are familiar with the term adoption that is nothing but taking full control of the thing when you have adopted that thing. In the same way, we can define ¶adoption of technology· or ¶technology adoption· as the successful implementation of technology, and deriving the full potential of the technology. Adoption is relatively easy in a new enterprise as compared to an

ongoing firm. Adoption of technology requires gearing up of all the resources such as internal and external infrastructure, human resources, raw materials, and even marketing. As there is no existing system in a new enterprise, it is easy to adapt to the acquired technology. Whereas, in an ongoing enterprise, the prevailing systems have to modified and the existing work processes, working environment and culture may have to be changed, which makes it more difficult. The concept of technology adoption has attracted much more attention in recent times, due to the explosive growth of new technologies worldwide. From the last few years, business and consumer marketplaces have been exposed to the widespread use of the personal computer, the Internet, ever present wireless communications and broadband communications. Simon (1978) opined that many technologies that were transferred from developed to developing countries were not successfully adapted, because of the inappropriateness of those technologies for developing countries. He studied the causes for inappropriateness of various technologies that were transferred from developed to developing countries, and identified the following as specific causes: · Missing preferences of local markets and consumers. · Technology is based on imported raw materials. · Insufficient skills of local labour. · Not scaled down to local market. · Insufficient use of technology caused by the local labour, and · Excessive usage of capital goods and imported equipment. Other general reasons that he identified were: · High cost of transfer. · Environmental pollution problems. · Impact due to plant location, and · Impact due to energy inputs. Technology adoption plan Till now we have learnt about the concept of technology adoption. Now, let us learn about the technology adoption plan. As we know that planning is needed before implementing any process. Also, before adopting the technology we need to plan for the process of adopting. Planning for the implementation of the new technology should be thorough and should encompass a relatively long time horizon to assure the stability of the new system. The complex process of introducing a new technology necessitates a practical plan which will focuses on employees· needs and deals with issues of concern to them. Key steps in this process of technology adoption plan include some of the steps shown in figure 5.1.

Figure 5.1: Steps in Technology Adoption Plan Let us now briefly discuss the steps involved in the technology adoption plan, as per the figure 5.1. · Identify the target group: For any project, the target group signifies the customers. This process involves the identification of the customers. The plan can be implemented very well if we know the view of the customers. · Locate and analyse the resistance to change: The introduction of the new technology in the organisation cause the change process in the organisation. It is the human tendency to resist the change, when they are very comfortable with the old values and beliefs. They locate and analyse the resistance to change, which involves the identification and analysis of the resistances to change. · Assess actual ability to change: We have to check whether ¶we· as the organisation, are capable to introduce the technology and undergo change process. · Assess capacity and resources to change: We even have to see whether we have sufficient resources to undergo the change process. · Access perceived priority of change: We have to prioritise the activities of change process. Specific planning should include: · Identify the division(s), section(s), and individuals involved in the change. · Specify the extent of changes.

· Develop a change plan which embraces timing, communication methods, involvement of individuals, and responsibilities of individuals. Self Assessment Questions 1. Adoption of technology can be defined as the successful implementation of technology and deriving the full ________ of the technology. 2. Before adopting the technology we need to plan for the process of adopting. (True/False)? 3. Adoption is relatively easy in a ________________as compared to an ongoing firm. Activity 1: Suppose that you are working in the company as a project manager and you are given in charge of the technology adoption. List out the steps that you would carry out for the technology adoption. Hint: Identify the target adoption. 5.3 Technology Diffusion Previous section familiarised us with technology adoption, so let us now let familiarised ourselves with the concept of technology diffusion. In general, we know that diffusion is the process of spreading. The process of adopting the new technology by the customers who came to know about the technology from other customers is called as the technology diffusion. Diffusion involves special types of communication methods or system to help diffuse changes in practice, as well as changes in knowledge or attitudes. Thus, we can say that diffusion is the process of closing the gap between what people do not know and what they can effectively put to use. 5.3.1 Importance of technology diffusion After defining the technology diffusion, now let us study about the importance of technology diffusion. Technology diffusion plays a major role in most of the countries today. The barriers to technology diffusion help us to determine the magnitude of technology diffusion. These barriers determine the volumes of diffusion. Diffusion enlarges the set of available technologies and increases the productivity of the country. In case of diffusion, productivity is determined by the domestic technology in the production country and the diffusion technology from other countries. The technology diffusion plays more important role in the sector of goods that are not tradable, than the sector with the tradable goods. The free technology diffusion generates more gains compared to that of the free merchandise trade. We can increase the merchandise trade by removing the diffusion barriers since the countries achieve higher productivity by taking the technology from the diffusion process. A well-managed technology diffusion system enables an organisation to plan its technology development projects in a more meaningful manner as well as transfer the technologies more successfully. Such an approach results in better returns for the investments made in R&D and technology development systems.

5.3.2 Perspectives of innovation diffusion process After the importance of technology diffusion, we will now study about different perspectives of innovation diffusion process. · Traditional perspective: Technological innovation and diffusion have traditionally been viewed as separate processes. This view treats diffusion as the marketing efforts required to expand the acceptance of the technology beyond the markets initially targeted. · Adoption perspective: The adoption perspective is most often used to describe the diffusion process. This perspective focuses on how the various channels and modes of communication (media, interpersonal etc.) can be used to influence a diverse group of potential customers to adopt a technological innovation. · Infrastructure perspective: The infrastructure of the region in which the technological innovation is targeted is an important factor in diffusing the innovation. Infrastructure aspects that affect diffusion include transportation, terrain, weather, availability of energy, communication, etc. Poor infrastructure development can constrain some innovations. Diffusion will occur only if the necessary facilities exist. · Regulatory /Societal perspective: The regulatory / societal perspective looks at the effects of government policies, regulatory requirements, and bureaucratic processes, and the development stage of the area in which the technology is to be used. This perspective is particularly important for diffusion of technologies in developing countries. · Models perspective: The models perspective looks at the development of models that management can use to predict the behaviour of potential users of a technological innovation and, consequently, develop strategies for diffusing an innovation. To model a diffusion process, an analyst works with a few variables to fit a curve that describes the spread of innovation over time. · Comprehensive perspective: The comprehensive perspective uses all the perspectives discussed so far in developing a diffusion strategy. It views the diffusion process as part of a total innovation process. 5.3.3 Activities necessary for diffusion process In this section, we will have a brief discussion on the activities necessary for diffusion process. We can say that diffusion is a multi-faceted activity. Let us have a look at its main activities. · Individual action: The diffusion process begins with this activity. During the individual action activity, the inventor proceeds (sometimes without even realising it) through a series of steps that result in practical use of an innovative idea. · Creation of favourable conditions: The leadership in the organisation must establish the expectation that everyone will take some responsibility for generating innovations and make some contribution to their diffusion. In return, the people in the organisation should expect that they will be rewarded for their efforts. · Applying basic research: This activity represents the translation of the findings of people who have done the basic research (people) into applications. The application of basic research is a more organised effort than individual action. In this activity, diffusion involves linking the basic

scientist·s work to the applied scientist·s work and the world outside the laboratory through the comprehensive diffusion perspective. · Industrialisation: This activity of diffusion process focuses on developing a practical and profitable application of the technology .It links customer demand with technical opportunities and out of this emerges a design concept for evaluation. Linking technical opportunities with market demand requires coordination and cooperation among applied scientists, engineers and marketing personnel, especially market research personnel. · Commercialisation: After initial development of the technology concept, commercialisation receives the major emphasis. The boundary between the industrialisation and commercialization activity is hard to define exactly. Commercialisation includes finding solutions to all the problems of defining the technology, organising trials, mechanisms for transfer of technology and expanding and managing the technology life cycle. · Communication: Communication activities are the next major activities. The marketing department develops a description of the attributes of the new technology, selects channels for its marketing message, and begins development of a promotional programme. Marketing next assesses the target market segment to identify the potential adopters that should be influenced first. The firm next develops the corporate capabilities for managing the diffusion, setting pricing policies and selecting and segmenting the market as a whole. · Full Scale Diffusion: This is the last activity of a comprehensive diffusion process. It includes a search for a wider range of potential markets, new industries, new geographic regions, new market segments that have not been explored, and new ways to couple the innovation with other innovations. Self Assessment Questions 4. The ___________department develops a description of the attributes of the new technology. 5. The free technology diffusion generates less gain compared to that of the free merchandise trade. (True/False)? 6. The diffusion of technology to the late majority and laggards are more direct than that of the_________ and early adopters. Activity 2: Consider that you are working in the company as a team lead and you want to carry out technology diffusion process for the well spread of the technology. List out activities that you will carry out for the same. Hint: Individual action 5.4 Technology Absorption As we have already discussed about technology diffusion in the previous section, so let us now have a discussion on ¶technology absorption·. We know that the term ¶absorption· is nothing but the process of absorbing something.

We have to acquire technology from sources within or outside the country, and one of the ways to acquire technology is, by the process of technology absorption. Once a technology is imported from another country, it needs to be absorbed and updated in accordance with the local requirements. Foreign technology may have been developed keeping in view different parameters relating to scale of production, raw materials and components, quality standards, costs, levels and types of production techniques, maintenance requirements, social aspects including environmental and pollution aspects, employment, so on It is common in many developing countries (such as South Korea, Taiwan, Thailand, Indonesia, India, Pakistan, Sri Lanka, Bangladesh, Philippines and including our own country) to import technology as a package. Most of these countries have developed indigenous R&D capabilities of varying order to absorb and upgrade the imported technologies, and to achieve technological self-reliance. While some countries, such as South Korea, Taiwan and Singapore have absorbed technologies predominantly from exports, India has done so predominantly for local markets. The concept of technology absorption differs from country to country, and even from firm to firm. In India, absorption is generally considered as the capacity to reproduce or manufacture products according to the "know-how" supplied by the licensor of technology, without really understanding the "know-why" of the technology. In a country like South Korea, know-why exercises to understand the "blackbox" of technology have been emphasised at the firm level without which exports are difficult. In fact, there are only a few countries which have attempted to provide incentives to industry to undertake technology absorption exercises, with a view to reducing-imports and enhancing exports. India is one of them. 5.4.1 Role of technology absorption Till now, we have seen the meaning and concept of technology absorption. We will now study about the important role of technology absorption in project implementation. Let us have a look at the technology absorption in the project implementation process in figure 5.2.

Figure 5.2: Role of Technology Absorption in Project Implementation As per the figure 5.1, technology absorption plays an important role in project implementation. It is clear that the project absorption occurs after the project implementation, in any project. Figure 5.1 also depicts the tasks that are associated with the each phase of the project implementation process. 5.4.2 Benefits of technology absorption After the role of technology absorption, we will now study about the benefits that we get from technology absorption exercises, as evidenced by Government and industry experiences so far. These benefits are: · Repeated collaborations for the same product/ process are avoided. · Acquisition of further technologies becomes selective.

· Ability is developed to unpackage the technology. · Savings can be affected in foreign exchange due to indigenisation /use of indigenous alternatives. · Effective utilisation is made of available indigenous research expertise and facilities to achieve the desired results. · Know-why and technology upgradation capabilities are built-up. · Exports are increased. · Technically competent groups of scientists and engineers trained in technology absorption get matured and strengthened. · The base for technological self-reliance is enhanced. We gain the benefits of technology diffusion, ranging from R&D services to the larger sales. Technology diffusion helps in sustaining the growth of the company through technical strength. Many developing countries, including India, have liberalised their industrial policies in the recent past. In the wake of the liberalised nature of New Industrial Policy and other policy measures in Trade and Finance, it has become imperative for industry to accelerate its R&D efforts to meet the emerging competitive environment. While acquisition of technology is now easier, commensurate R&D efforts will simultaneously be needed to absorb and upgrade the acquired technology in order to become internationally competitive. The thrust as underlined below need to be ensured for effective implementation, absorption and upgradation of imported technology. · Industry should attempt to obtain best available technology closest to international trends and provide R&D at the stage of project planning. · Speedy indigenisation of raw materials and components. · Efforts for unpackaging and indigenisation of tailor-made equipment in the acquired technology. · Enhancing exports of products based on absorbed and upgraded technology. · Continuous training of research personnel in India and abroad. · Use of national and international research facilities and expertise. · Involving users, suppliers of components and materials, research organisations in undertaking absorption exercises. 5.4.3 Constraints in technology absorption There are some constraints associated with the technology absorption. We will now discuss about these constraints of the technology absorption. We know that improved productivity and quality as well as reduced costs lead to higher efficiency in industrial operations. In labour intensive industries, these can be achieved from optimum

man/machine utilisation, lower overheads, use of versatile machines and quality control measures and industrial engineering techniques. In capital intensive industries involving sophisticated operations to manufacture products which are in continuous demand or which command large markets, these can be achieved by higher automation and by organising the operations on larger scale. In hazardous industries, safety and pollution control measures necessitate higher capital investments in sophisticated equipment based on latest technologies. We will now have a quick overview of factors, which are important in achieving higher productivity, quality and reduced costs. These factors are: · Optimum utilisation of capital equipment to bring about maximum production leading to better capital-output ratio. · Adequate investments for quality control, material and energy conservation/ recovery, elimination of hazards which would necessitate use of sophisticated equipment. · Minimum economic scale of production, particularly in industries where scale factor is important in optimising the operations, especially if in larger quantity of critical production equipment is employed. · Targeting and achieving, international levels of performance and operating parameters. These factors invariably require use of contemporary technologies needing larger capital investments, and/or accompanied by sizeable domestic demands and satisfactory absorption of technology. In scale sensitive industries, lower the scale of operation, lesser is the level of technology. Level of technology is also reflected by the use of less productive and sometimes second-hand machinery from abroad. In mass consumption industries such as petrochemicals, man-made fibres, organic chemicals, electronic components, so on lower the initial installed capacity, lesser is the technological level. In such cases, modernisation /R&D costs would be heavy in order to jump to the next generation of technology. Some of the major constraints in absorption of technology are: · Choice and use of imported technology by most Indian industries have not been at international levels. This is an important factor while establishing scale sensitive, high technology industries. · The demand of products whose production is influenced by scale factors of latest technologies is generally not very large in our country. Presently these are being met by a number of units of suboptimal sizes as compared to international levels. This constraint increases the gaps to be bridged through technology absorption. Industry would not be in a position either to invest similar R&D resources in comparison with international units, or even to improve the products/processes. Expanding the existing units and establishing new units with larger capacities tend to minimize this gap. · In general, industry has not given adequate attention to absorption of technology. In such cases, the firms have usually approached the collaborators once again for renewal of earlier agreements or for new collaborations for improved or new products and processes. There are instances where existing items made with marginal process or product improvements have continued to be supplied even after extensions of collaborations. In the absence of a competitive domestic market, or where industrial users are dictated by equipment/products based on imported technologies, the inherent tendency to supply the same product hits continued, till the users· requirements change or substantial imports of a new product take place.

Till now we have studied about the technology absorption and the constraints in technology absorption. Let us now move on to the topic that is the Technology package and technological dependence. Self Assessment Questions 7. The technology absorption plays an important role in the project _____________. 8. Industry should attempt to obtain best available technology closest to international trends and provide R&D at the stage of project planning. (True/False)? 9. The demand of products whose production is influenced by scale factors of latest technologies is generally not ______________ in our country. Activity 3: Suppose that you are working in a company and you have to see the benefits of the technology absorption that you will get and then make the decision whether to carry out the technology adoption or not. List the benefits of absorption of technology. Hint: Exports are increased. 5.5 Technology Package and Technological Dependence In the previous section, we studied about the technology absorption. In this section, we will learn about the technology package and technological dependence. We know that the technology is imported from other countries in the form of hardware, software and related services. In some instances, it could be only for using foreign brand names. It could be for a grass-root project or for further technological requirements of an existing plant, or for modernisation or enhancement of a product capability. A foreign technology package may consist of all or many of the aspects, such as product design, process or production know-how, systems engineering, application information, tailor-made equipment and/or their designs, technical services regarding maintenance/ safety / continued improvements/international experiences, so on Technological dependence on foreign know-how can be in any of the following areas such as: · Product designs/ standards/ specifications. · Know-how for assembly of products. · Licensing for the use of patents/ trade marks. · Process know-how designs and basic engineering, detailed engineering, production technology. · Quality control, safety, pollution control and continued assistance in improvements of technology used in the existing manufacturing facilities. · Supplies of hardware and proprietary equipment and their designs.

5.6 Indian Experience in Technology Absorption Efforts In the previous section, we have studied about the technology package and technological dependence. In this section, we will study about the Indian experience in technology absorption. An in-depth assessment of absorption efforts of over 50 major industrial units in different sectors has brought out some of the constraints of Indian industry, as given below: · Lower scales of production compared to international levels, even in areas that are agreeable to scale sensitive sectors/use of latest technologies. · Lack of attention to absorption of technology in the absence of any compulsion to be internationally competitive. · Continued access to collaborators on nominal payments, assured market and inadequate allocation of resources for R&D has resulted in insufficient attention for effective absorption and improvement of imported technology. · Minimal involvement of R&D personnel in assessment of technology, further negotiations and transfer, and transfer in implementation ¶Of technology. · User·s preference to imported technology-based products and collaborator·s guarantees. Other reported constraints impeding technology absorption include delay in clearances, project overruns in turnkey jobs, difficulties in translation, inadequate training/ expertise, incomplete documents, lower volumes than planned, lower initial investments to play safe, delay in import of equipment/components, delayed market response, and bottlenecks without adequate assistance by collaborator. Suggested measures Some measures are given for the Indian industries for improving the technology absorption. We will now have a brief discussion on these suggested measures. Indian industry has been expressing its views on various matters connected with absorption through press, seminars and representations to the Government from time to time. Let us have a look at the summary of their views and suggestions. · The units should have their own technology policy for its acquisition, absorption and adaptation, on long-term as well as short-term basis. · The travel grants and incentives need to be considered for participation in international seminars/ symposia as well as for training abroad to keep abreast with the latest development in their fields. · The R&D personnel from in-house/national laboratories should be involved intimately in the transfer of technology from the conceptual stage itself. · Incentives and support should be given for prototype development and testing facilities, pilot studies for adaptation, absorption and up-gradation of imported technologies. Also, support for using the services of experts/ consultants on short -term basis may be considered in specific cases.

· There needs to be a closer interaction amongst in-house R&D units, national R&D laboratories, academic institutions, design organisations and consulting firms. Also, international R&D collaborations can be encouraged. · The particular Information about the acquisition of foreign technologies should be widely disseminated with a view of making R&D personnel aware of the needs of the industry. It enables them to formulate the programmes accordingly. · The tax benefits and fiscal incentives may be considered for investments made in absorption and upgradation of processes/ products. · In case of fast changing technologies such as electronics, foreign collaboration agreements should be of shorter durations. · R&D expenditure should be generally 5 to 10% of the annual turnover of the company, particularly in areas of high rate of obsolescence. · An information base for modern available technologies on global basis should be set up. · The development of new products is very expensive and time consuming. It is generally not economical for the industry because of the low volume of manufacturing and fragmentation of capacity. Small/ medium industries are not able to do any significant technology absorption exercises since most of them do not have their own R&D facilities in a meaningful way. · Import of technology and know-how is limited to product design in most of the cases and manufacturing processes are directly related to the volumes of production abroad. They are uneconomic for the Indian firm and need be scaled down to meet the local demands. Consequently, quality and finish may often suffer. Self Assessment Questions 10. Technology is imported from other countries in the form of hardware, software and ______________. 11. The development of new products is very expensive and time consuming. (True/False)? 12. R&D expenditure should be generally 5 to 10% of the _____________ of the company. 5.7 Issues Involved in the Management of Technology Absorption and Government Initiatives In the previous section, we have studied about India·s experience in technology absorption efforts. In this section, we will learn about the issues involved in the management of technology absorption and the measures taken by the government for technology absorption. So, let us now learn about the issues involved in the management of technology and the initiatives taken by the government for the technology absorption. The Indian industry, on the whole, has achieved a good capability in implementing and adapting foreign technology as seen from the various experiences in different sectors. 5.7.1 Issues involved in the management of technology absorption The Indian industry has to concentrate on some issues in technology absorption. We can explain them as the issues involved in management of technology absorption. We know that the Indian

industry needs to focus its efforts in filling up of the gaps in technology absorption and upgradation of some areas. Let us have a look at these areas given below. · Accelerated indigenisation and improvement of raw materials/ components/ sub-systems through speedy R&D efforts with vendors/ ancillaries. · Basic investigations and projects in research, design and engineering, encompassing process/ product design analysis/ optimisation/ improvement, product designs for higher ranges/ new applications, exports, process design and engineering for higher volumes and exports. · Analysis and improvement of designs and development of tailor-made production equipment. · Demonstration of improved/higher range of products/ equipment of the users. · The technology absorption projects need to be organised or established on two ways. The two ways are explained as follows: ð Individual unit basis. ð Collaborative or cooperative basis, i.e. ¶club· projects involving users, manufacturers, national research laboratories or institutions. At present there is a need for stronger linkages in research and development work between manufacturers and users and between institutions/ national laboratories and industry. 5.7.2 Government initiatives for technology absorption After studying about the issues involved in the technology absorption management, we Our Indian government over the years has directed the industry to take necessary steps to set up R&D units for up-gradation and absorption of imported technology. There is also a stipulation with respect to this in the terms and conditions of foreign collaborations. However, it has not been very effective. While formal extensions of collaborations have not been numerous in comparison to the number of new collaborations. Indian industry has quite often gone in for further collaborations to avail the technologies for higher ranges/ capabilities or improved process/ production techniques. The newer grass-root plants have used later technologies, but they are also likely to become out dated as the years pass by unless necessary efforts to catch up with technical changes are made. Industry, in general, stays at a particular level for a number of years and then considers a jump in product range or volume of production through further technology induction. Pursuant to the Technology Policy Statement, the Government had stipulated that industries using technologies costing more than a payment of Rs.2 cr. should bring out comprehensive Technology Absorption, Adaptation and Improvement (TAAI) plans. Government has also directed industry to submit annual returns for technology implementation and absorption. Now let us learn in detail about the Technology Absorption and Adaptation Scheme (TAAS). The Technology Absorption and Adaptation Scheme (TAAS) The Technology Absorption and Adaptation Scheme (TAAS) initiated by the Government (DSIR) as a pilot scheme during the 7thplan. TAAS aims at stimulating and accelerating the efforts of Indian industry in technology absorption and up gradation. About 30 public and state sector units have so far been partially supported for undertaking identified RDDE (Research, Design, Development and Engineering) projects to absorb and upgrade specific elements in imported technology. The support is for accelerated indigenisation /import substitution/ know-why exercises/ product improvement and optimisation. An amount of over Rs.20 cr. has been marshalled through a partial support in various major sectors such as electrical /electronics, metallurgy, industrial machinery

and chemicals. The projects are overviewed by Evaluation Committees. Under the scheme, other initiatives such as workshops, technology absorption/ profile studies of different states and technology evaluation studies of critical sectors have been undertaken. All these have encouraged the participation of industry, national institutions/laboratories and Government in dealing with issues of technology absorption. TAAS activities have resulted in stimulating and speeding up the R&D work in absorption of technology. The scheme, therefore, is in a good position to encompass larger areas, to demonstrate the beneficial effects of organised and target-oriented absorption of technology projects. TAAS has brought out the need for enhancing the activities to catalyse and assist the industry in technology absorption. TAAS is expected to extend partial support to the following: · Core sector users in absorption and upgradation of products/ equipment from ancillaries /equipment manufacturers/vendors whose technologies are based on foreign collaborations. · ¶Cub· or co-operative projects of interest to the sector, involving a group of manufacturers, users, and national institutions, in identified areas of technology gaps. · Industry-sponsored projects with national laboratories/institutions. · Projects of small and medium enterprises, in priority areas such as energy saving, accelerated indigenisation, efficiency and technology upgradation. · Skill utilisation in technology absorption projects by hiring of research experts and NRI specialists as well as training in national laboratories/institutions/ international organisations for identified areas of absorption. After studying about the absorption and adaptation scheme it will be incomplete if we do not study about the evaluation of technologies so now let us move on to the topic technology evaluation studies. Technology evaluation studies In order to assess the performance of technology in the major sectors of Indian industry, and to assess the gaps in technology and to suggest possible programmes for R&D and technology upgradation, the Government has initiated studies in various important areas such as fertilisers, steel, cement, mini steel, forgings, foundry, aluminium, so on Over 50 sectors have been identified and in about 30 sectors, studies have .been commissioned. The reports, whenever they come, are widely discussed in industry, government departments and other concerned organisations, and circulated. The reports bring out the need for accelerated effort in technology generation and absorption. ¶Technology demonstration· is also envisaged in some important identified areas in order to speedily introduce new technologies. These studies bring out technology gaps and needed thrusts for technology absorption. Self Assessment Questions 13. Our Indian government has directed the industry to take necessary steps to set up R&D units for up-gradation and absorption of _______ technology.

14. The Technology Absorption and Adaptation Scheme (TAAS) initiated by the Government (DSIR) as a pilot scheme during the 8thplan. (True/False)? 15. The reports bring out the need for accelerated effort in technology __________ and absorption. 5.8 Summary In this unit, we made an effort to learn about the technology adoption, diffusion and absorption. We learnt that technology adoption is the process of successful implementation of technology and taking full control of the technology. We also discussed about the technology adoption plan. We also studied about the technology diffusion, which includes the process of adopting the new products in the market place. The barriers indicate the volumes of diffusion. This unit also familiarised us with the technology absorption, which play an important role in the technology acquisition when we acquire technology from outside and within the company also. We noticed that improved productivity and quality, as well as the reduced costs are leading to high efficiency in industrial operations. We also described about the technology package and technological dependence. We also saw some constraints in the Indian industry, and the measures for improving the absorption of technology in the Indian industry. We also analysed the issues involved in management of technology absorption. The Indian industry focuses on filling the gaps in the technology absorption. We have seen that TAAS aims at simulating and accelerating the efforts of Indian industry in the technology upgradation and the absorption. 5.9 Glossary Term Barriers Collaborations Obsolescence Technophobia Turnkey jobs

Description The structure that separates anything. The act of working with one another. The process of being out of state or no longer useful. This is the dislike for new technology. The jobs those are ready for the purpose.

5.10 Terminal Questions 1. Write a short note technology adoption. 2. What is the importance of technology diffusion? 3. What are the benefits of technology absorption?

4. Explain the suggested measures in Indian experience in the technology absorption efforts. 5. What are the government initiatives for technology absorption? 5.11 Answers Self Assessment Questions 1. Potential 2. True 3. New enterprise 4. Marketing 5. False 6. Innovators 7. Implementation 8. True 9. Very large 10. Related services 11. True 12. Annual turnover 13. Imported 14. False 15. Generation Terminal Questions 1. Refer section 5.2 Technology Adoption. 2. Refer section 5.3 Technology Diffusion. 3. Refer section 5.4 Technology Absorption. 4. Refer section 5.6 Indian Experience in the Technology Absorption Efforts. 5. Refer section 5.7 Issues Involved in Management of Technology Absorption and the Government Initiatives.

5.12 Case Study Case Study On Technology Adoption and Diffusion This case study deals with the technology diffusion through the agent technologies in the ABC company. There is a need of supporting tools and methodologies for the software technologies before the adoption of the process that takes place. The agents play an important role in the adoption of the technologies. Though there are many agent systems, barriers are present for the adoption of the agent technologies. The company decided to go for technology diffusion, since there was a need for spreading the information. It also focussed on adopting the new software technologies. For this, the employees were supposed to learn the new technologies and improve the skills, but there was lot of resistance to change since the employees were very comfortable with the old skills and were not interested in learning the new skills. Even the new technologies were very costly, but also the company aimed at adopting the new technologies because there were new tools and operating systems involved in the adoption process. The technologies were successfully adopted and came into existence, because of the good leadership led by the general manager of the company. He managed to convince the people in the company for the change process. He showed the leadership by adopting the technologies that are very costly since he analysed the technologies with his team before adopting the new technologies. Challenges · Whenever there were changes due to the introduction of new technology, the employees resists to the same. · The new technologies were costly and needed lot of analysis before adoption of technology. Results The company adopted the new technologies that were very costly and useful. Questions 1. What are the challenges faced by ABC company? Hint: The resistance to change from employees. 2. How did the general manger overcome the challenges? Hint: Convinced the employees for the change process.

OM0018-Unit-07-Aspects and Issues in Technology Management
Unit-07-Aspects and Issues in Technology Management Structure: 7.1 Introduction Objectives 7.2 Technological Change Characteristics of technological change Classification of technological change Impact of technological change 7.3 Technology Life Cycle 7.4 Technology Transformation 7.5 Technology Policies and Policy Instruments 7.6 Technological Development Options and Strategies 7.7 Technology and Socio-Economic Planning 7.8 Diffusion and Growth of Technologies Information technology revolution Macro effects of technological change 7.9 Summary 7.10 Glossary 7.11 Terminal Questions 7.12 Answers 7.13 Case Study 7.1 Introduction By now you must be familiar with the emerging new technologies, its mode of selection and implementation. You must also be familiar with automation technology and automated decisions.

The result of technology growth has its base from inventions and innovations. The changes to technology have occurred through substitution and diffusion. The simplest form of technological substitution occurs when a new technology captures over a period of time, a substantial share of the market from an existing older technology. So, in this unit we are going to deal with the study of aspects and issues in managing a technology. This unit will also enable to you to understand the technological changes, technology life cycle, technological transformation, technology policy and policy instruments, planning, development options and strategies. Objectives: After studying this unit, you should be able to: · Explain the need and importance of technological change, technology life cycle, and technology transformation. · Justify the need and role of technology policies and policy instruments. · Analyse technology development options and strategies available to an organisation. · Describe the importance of linkage between technology issues and socio-economic planning process. · Analyse diffusion and growth of technologies. 7.2 Technological Change We have seen that technology includes knowledge ² knowledge that is embodied and implicit. The firm-specific knowledge is the sum totality of all the knowledge within a firm. We can define· technology change· as the process of adding up the knowledge to the existing knowledge to accomplish things to do in a better way and perform new things together. 7.2.1 Characteristics of technological change Let us now have a look at some characteristics of technology change. We can characterise the transition from the old to the new technology by the creation, addition, alteration, and sometimes even obsolescence of tasks, functions and their dependent occupations. We can group these characteristics into three categories, which are: · Nature and rate of technology change: In this group, we try to find the common threats for the numerous changes occurring around the globe. We also try to find out the rate or speed at which technology changes are taking place. · Impact of technology change: In this group, we take up the effects, either direct or indirect of technology change. · Determinants of technology change: In this group, we try to figure out what causes these changes, that is, what are the reasons for the occurrence of technology changes. 7.2.2 Classification of technological change

After characteristics, we will now discuss about the classification of technology change. Some of the technology changes are better noticed than others. For instance, changes that result in new products like Walkman get media headlines, but changes in process equipment that result in an increase in the capacity utilisation from say 65 per cent to 70 per cent hardly find mention even in the firm·s own reports. One way to classify the changes is to base it on the extent of its influence across the firm and across the sectors. Thus, we can classify these changes as: · Incremental changes: We can define incremental change as the change that takes place very often. For example, incremental changes in the consumer products - Lux, New Lux, International Lux, white colour Lux, pink colour Lux and so on. These changes can even take place in the technology. · Entrenching Changes: These are also incremental changes, continuing with relentless zeal and ultimately end up as significant developments. The Entrenching changes can take the form of: - Product mix enlargement: It is derived from two different business strategies whose interaction will produce a common trend as a whole. It also refers to the number of items carried by the company along the product line. For example, Larsen & Toubro (L&T) manufactures dot matrix printers at Mysore. They enlarged their product mix by developing a 24 needle dot matrix printermodel 32/324; heavy duty 9 needle dot matrix printer-model 32NS; 300 CPS 9 needle dot matrix printer with superior paper handling features model ¶Paragon· and so on. - Modernisation/Expansion: It is the ongoing evolution of operations and IT infrastructure which will help to switch over to a new technology and the adoption of change with a less impact on day to day operations. For example, firms like TISCO increased their capacities by balancing and modernisation. Textile sector added to its capacity by replacing old spindles with high productivity machines. - Process standardisation: Process standardisation has been going on to improve the manufacturing, essentially to make it more precise in terms of "line definition", defect elimination and super miniaturisation which we will be discussing shortly. - System building: System building is concerned with providing support in the field of design, engineering and installation. For example, to run a synthetic fibre plants, one needs auxiliary support like fibre finishes, anti-oxidants, anti-static agents, delustering agent precision engineering components and tools, metering pumps, valves, seals, and spinnerettys, Entrenching changes do not call for organisational changes. They modify the existing methods but proceed in the same direction. Their benefits tend to accumulate and could result in strategic advantages for the firm. · Altering changes: These changes call for a fixing of the system and the structure. They reshape the entire configuration through the introduction of markedly different equipment, raw materials, form of knowledge and physical contexts. For example, consequential use of all major innovations such as locomotive, motor car, aircraft, telegraph, telephone, radio and now automation in offices, design, factory, and so on. They can be in the form of

- Miniaturisation: It refers to the formation of small scales for mechanical and electronic products and services. From the 60s onwards, electronic technologies have concentrated on super miniaturisation or compressing greater performance into smaller volumes. Today·s VLSI has over a million elements. The computer that not long ago occupied a full room now fits in a hand. Miniaturization has cut the internal volume of an average cellular telephone by a factor of 1000 in little more than a decade. - Automation: Automation is used in office, factory, bank and coffee shops with an aim to reduce the need for human efforts in the production of goods and services In general automation is the key word used everywhere. Several thousands of pick and place robots are in use in Japan. Automation is no longer planned as a replacement-for costly labour. They have changed the factory layout itself - Dematerialisation: it is the concept used to reduce the quality of materials required to serve up the economic functions. For example, we can consider the High Tensile Fastener industry, where cold forming was adopted as a new technology. Compared to hot forming traditionally used, cold forming offers several advantages. Most important are the savings in material cost. Lower cost material like plain carbon and low alloy steel can be used in place of heat treated alloy steels. When parts are made by cutting, in hot forming technology, the material wastage is around 80 per cent. With cold forming the material wastage is reduced to 20 per cent. Use of cheaper material and lesser quantity of material for the same product is the trend in all the industries. - Intelligence incorporated: The power of softwarisation or building in intelligence and systems is increasingly felt. Microprocessors and memories become unit components in such systems and system functioning is decided by the software changes rather than circuit modifications. Selfhealing Digital Signal Processing (DSP) devices were developed at General Electricals Research and Development (R&D) Centre by Dr. Abhijit Chatterjee. These are used in mission critical application such as Satellite. The self healing circuits detect and correct irregular faults caused by loose connection of marginal components, temporary faults caused by electromagnetic interference and permanent faults such as grounded signals. - Genetic engineering: It is also called as genetic modification where in the direct manipulation of organisms genetic material takes place which usually do not occur in the normal conditions. The scientists at ET centre at Sabarmati Ashram Gaushala in Gujarat inseminated a Holstein crossbred cow with semen from an elite bull and using hormonal injection super-ovulated the cow to produce as many as 15 embryos. These embryos were flushed out and implanted into the womb of foster mothers. These foster mothers gave birth to 11 identical calves; a mother of 11 in one year. 7.2.3 Impact of technological change We will now study about the impact of technological change. Accelerated technological changes have impacted, not only to turn into out of date organisational strategies, but they also invalidated past, premises and assumptions normally relied upon by the industry. A technology change takes place in the firm level as well as the sector level and the economy as a whole. The question that arises at this point of time is - how are the firms affected by technology change? Technology changes can have different levels of impact, depending on their occurrence, and the structure of organisation and society, as given in the figure 7.1.

Figure 7.1: Impact of Technological Changes We will now briefly discuss about these impacts. Direct impacts Direct impacts of the technological changes take place very often. By removing obstructs, we can increase the output and modern machines improve labour productivity. Direct impacts of technology change result in direct changes. Let us have a look at some of the direct changes. · Increase in productivity: Whenever any technology changes, it results in increasing the productivity of the company using that technology. The requirement of enhanced productivity is the key force behind any technology making our lives easier. · Introduction of new products: Technological change results in the introduction of new products to the market or the organisation · Organisational changes: Technological change results in change in the organisations also. For example, by making redundant or radically altering old functions and generating new ones, technology change can also change the relative importance of functions. Indirect impacts Another type of impact of technological change is ¶Indirect impact·. Though it was commonly agreed that technology changes improve or reduce competitive strengths, there is difficulty in relating them to specific changes, especially incremental changes. Some of the indirect effects will reflect on: · The competitive performance occurring between the companies. · The way to attract the experts. · The company image that incurred the changes. Self Assessment Questions 1. The _____ call for a fixing of the system and the structure.

2. The transition from the old to the new technology is characterised by the creation, addition, alteration and sometimes even obsolescence of tasks, functions and their dependent occupations. (True/False)? 3. Microprocessors and memories become unit components in such systems and system functioning is decided by the software changes rather than ______ 4. Technology change is the process of adding up the _____ to the existing knowledge to accomplish things to do in a better way and perform new things together. Activity 1: Suppose a new web technology has come into the market. It is affecting us, as well as organisations. Prepare a list of impacts of this new technology, which emerged as a change in the old web technology. 7.3 Technology Life Cycle In the previous section, we discussed about technology change along with its characteristics and impact. In this section, we will learn about the life cycle of technology. The life span of various technologies can be conveniently identified as consisting of four distinct stages, all of which taken together form the ¶Technology Life Cycle·. Let us have a quick overview of these four stages of technology life cycle. Innovation stage: This stage represents the birth of a new product, material or process resulting from R&D activities. In R&D laboratories, new ideas are generated depending on gaining needs and knowledge factors. Depending on the resource allocation and also the change element, the time taken in the innovation stage as well as in the subsequent stages varies widely. Syndication stage: This stage represents the demonstration (pilot production) and commercialisation of a new technology, such as, product, material or process with potential for immediate utilisation. Many innovations are put on hold in R&D laboratories. Only a very small percentage of these are commercialised. Commercialisation of research outcomes depends on technical as well as non-technical, mostly economic factors. Diffusion stage: This represents the market penetration of a new technology through acceptance of the innovation, by potential users of the technology. But supply and demand side factors jointly influence the rate of diffusion. Substitution stage: This last stage represents the decline in the use and eventual extension of a technology, due to replacement by another technology. Many technical and non-technical factors influence the rate of substitution. The time taken in the substitution stage depends on the market dynamics. 7.4 Technology Transformation Now, that we are familiar with technology life cycle, we will learn about the technology transformation.

Development of a technology in every sector becomes difficult or undesirable, when one expects to build it in the native environment. We can also call it as ¶indigenous technology· since it is employed by the native or local inhabitants of the country. Nevertheless, it may be highly desirable that, in carefully selected areas of production, there is a vertical integration with respect to all stages of technological transformation necessary to put a product on the market, starting from the natural resources. The technological transformation in the production of goods starts from nature and finally goes to the market. During this transformation, we come across five different stages which are: · The first stage is called the ¶collective stage·, which includes collective operations such as, extracting, mining and farming. · Stage two can be called ¶refining stage·, which includes some refining operations such as purification, preservation and metallurgy. · ¶Processing· can be considered as a third stage where chemical and electrical conversions take place. · The fourth stage is the ¶manufacturing stage·, which includes all kinds of mechanical conversions and fabrications. · The last stage is ¶packaging stage·, where things are assembled and packaged, to transmit to the markets. There are considerable variations in the technology content added to the product at each of these five stages. Self Assessment Questions 5. The ______ stage represents the birth of a new product, material or process resulting from R&D activities. 6. The time taken in the substitution stage depends on the market dynamics. (True/False)? 7. The first stage is called the ______ and includes such operations as extracting, mining and farming. 8. The life span of various technologies can be conveniently identified as consisting of distinct stages, all of which taken together form the ______. 7.5 Technology Policies and Policy Instruments After studying about the technology transformation, we will now study about the technology policy and technology instruments. Technology policy formulation has to logically follow the establishment of a development visualisation or perspective plan. This plan is described, among others, by a desired mix of the goods to be produced and services to be provided in the country in the coming one or two decades. The formulation of a technology policy begins with the establishment of a vision for the country and the corresponding scenario of the mix of goods and services to be produced and provided. We must note that the policy framework has to be broad and flexible enough, taking into account the dynamics of change.

We can define a technology policy as a comprehensive statement created by the highest policy making body namely the cabinet/parliament in the Government to direct, encourage and control the generation, achievement, development and deployment of technology and science in solving national problems or achieving national objectives set forth in the development vision or perspective plan. The technology policy declaration typically contains several commitments on behalf of the Government and some categorical assurances. The policy, among other things, commits the authority to ensure: · Establishment of institutional facilities for relevant knowledge broadcasting, and skill development for stepwise incorporation of imported technology. · Provision of services for productive exploitation of research results and generation of indigenous technology. · Expansion of support facilities, such as, information and documentation services, consistency and quality control. · Satisfactory support to emerging technologies with an aim on future use in production sector. · An optimal combination of indigenous and imported technology. Policy instruments We can define ¶policy instruments· as the relations between the expressed purpose and the results that are required in practice. There are both direct and indirect policy instruments. The direct ones refer explicitly to technology functions and activities. The indirect ones, even though primarily referring to policies, functions or activities other than technology, have an important indirect effect on Science and Technology (S&T) activities. Different policy instruments are: · Policy instruments to build up S&T infrastructure. · Policy instruments to regulate technology import. · Policy instruments to define the pattern of demand for technology. · Policy instruments to promote the performance of S&T activities in the enterprises. · Policy instruments to support the performance of S&T activities. Self Assessment Questions 9. Policy instruments are the relations between the expressed purpose and the results that are required in practice. (True/False)? 10. The technology policy declaration typically contains several _____________ on behalf of the Government and some categorical assurances. 11. Technology policy formulation has to logically follow the establishment of a development visualisation or perspective plan. (True/False)?

Activity 2: Search on internet, and prepare a list of policy instruments. 7.6 Technological Development Options and Strategies After having a brief idea on the technology policy and instruments, we will now discuss about the technology development options and strategies. A country·s technology development strategy is determined by identifying the technological needs with potential technological developments in the world and a thorough assessment of available and emerging technologies. Then, the country determines a strategy to import technologies which can be produced locally. Now, there is a universal realisation that unless a concerted attempt is made to build local technological capabilities for absorbing imported technologies, any attempt to develop indigenous technologies encounters enormous difficulties. Even with regard to imported technology, it is essential for a country to be able to select, digest, adapt and improve it for local consumption. All of these efforts justify greater priority and allocation of resources to R&D. A requirement for efficient utilisation of R&D resources is the development of technological infrastructure within the country, including institution building, manpower development, and provision of support facilities and creation of a modern environment. Self Assessment Questions 12. The requirement for _____ comes from an explicit commitment to a national goal and the acceptance of technology as an important strategic variable in the development process. 13. The technology policy declaration typically contains several commitments on behalf of the ______ and some categorical assurances 14. A country·s technology development strategy is determined by identifying the technological needs with potential technological developments in the world and a thorough assessment of available and emerging technologies. (True/False)? 7.7 Technology and Socio-Economic Planning In the previous section, we learnt about technology development options and strategies. In this section, we will discuss about the socio-economic planning and technology. The Successful integration of technological considerations into the socio-economic planning process is very essential. It is necessary that the national development strategies should include specifically the dimension of technology development. In developed countries, there are adequate pressures for technological considerations within the various sectors of their economies. But in developing countries, integration of technological considerations with economic planning at the highest level is required, in order to achieve technology-oriented development in priority sectors. Let us have a look at a general framework for integrating the technological considerations in the national development planning process, in figure 7.2.

Figure 7.2: Integration of technological considerations in National Development Planning The integration of technological aspects should extend significantly beyond simple selection of imported technologies to the formulation of policies and guidelines. They must be directed to generate and promote demand for local technologies and technological capabilities. Moreover, the insertion of technological considerations in socio-economic development planning involves both the explicit introduction of the technological issue at all phases of the planning process and identification of implicit technology policies resulting from the national development plans. 7.8 Diffusion and Growth of Technologies There is another way of looking at the technology life from the perspective of growth and diffusion. Every technology eventually reaches a down turn phase, due to the development of better technologies in terms of performance and/or cost. In other words, technological change occurs through ¶substitution·. You can see the process of technological advancement through substitution schematically in Figure 7.3.

Figure 7.3: S²shaped Growth of Technologies Most technologies follow an S-shaped growth pattern. However, it has also been observed that, although a particular technology eventually reaches a stage where it has limited use, new technologies are developed to achieve further growth with respect to any particular ¶figure of merit· which is the index of particular requirement. For example, if one takes the speed of passenger travel as a ¶figure of merit·, then Technology T1 is a propeller aircraft, T2 is the turbo prop aircraft and T3 is the jet aircraft. Each of these technologies normally shows an S-shaped improvement over time. Moreover, the overall growth of these successive technologies representing a system of high order, characterised by a successive technologies representing a system of high order, characterised by a succession of discontinuous innovations also exhibits an Sshaped growth pattern. In this pattern: · The hardware intensive technology diffusion process can be considered to consist of five phases. · The first is the ¶incubation phase· where many ideas are gradually reduced to one commercial product for introduction into the market. · Next is the ¶introduction phase· where the applications of the new technology are very slow. · Later when the number of applications increases rapidly, the technology is in its ¶growth phaseµ. · After sometime its growth reduces and some stability can be observed in the ¶maturity phase·. · Finally, an improved substitution makes the technology outdated and hence it enters the ¶decline phase·. It may be noted; however, that time taken for these different patterns varies widely. The introduction, growth and maturity phases of a technology are also referred to as the three major stages of ¶Technology Life Cycle·. 7.8.1 Information technology revolution Let us briefly study about the information technology revolution.

Information Technology synthesises the convergence of previously distinct and separate technologies (IT). Information Technology refers to ¶a very wide range of elements which are utilised to create, transfer, transform and convey information through means, irrespective of whether these elements are in the form of equipment or services developments in information technology have already produced vast gains in productivity resulting in counter-inflationary trends in prices as well as substantial improvements in technical performance of many products and services. We shall now discuss some of the major changes brought about by developments in information technology. Changes in products · Information technology brings about changes in products by replacing mechanical (e.g. watches), electromechanical (e.g. calculators) or older electrical or electronic (e.g. computers) parts or components, by upgrading traditional products by enhancing their capability. It includes functions involving, for example, logic and decision-making (auto focus in cameras) and even by creating entire new products (e.g., video games). · The product changes mentioned above have three major consequences. The first is that the value addition is transferred from the manufacture and assembly of parts to the production of the electronic assemblies/sub-assemblies with associated software. · The second effect relates to shortening of product life cycles. Product designs of many products get linked to developments in information technology in general and to developments in electronic technology in particular · The ability to create, store, retrieve, transfer, transform and convey information/data efficiently and economically imparted to products by developments in information technology allows the products to the integrated into larger systems so that the products are compatible with the larger systems for enhanced capability. Changes in services We use the term ´servicesµ in its broadest sense as bundles of benefits some of which may be intangible and others tangible, and they may be accompanied by facilitating goods. This sector has the highest growth rate in most economies of the world and has the largest single share of employment in the world Gross Domestic Product (GDP).Information technology is already affecting the productivity of service production as well as increasing their transportability. With a view to understand the changes in a better way, the classification of services made by ¶Baumol· is as follows Substitutable personal services: These services also require direct personal contact but it is possible to substitute these services with technological alternatives. For example, guards can be substituted or helped by electronic security and surveillance equipment and domestic servants by a variety of household appliances like washing machines, ovens and mixers. Progressive services: These services require the use of some equipment and also direct personal contact with the receiver of the service. Technological change affects the productivity of the equipment more directly and significantly than the personnel offering the personal contact-based service. For example, air transportation requires the use of the airplane as well as that of the

ground and cabin crew; and broadcasting requires the use of studio and transmitting equipment as well as the ´personalµ contact established by the broadcaster. Explosive services: Services that do not require personal contact belong to this category such as telecommunications. Information technology is bringing about significant productivity increase in these services thereby reducing the unit cost and setting counter inflationary trends in prices. Developments in information technology are also contributing to the generation of new services in this category. For example, facsimile transmission (FAX), Videotext and Electronic Mail. Changes in processes Information technology changes processes in two major ways: it allows the incorporation of higher levels of skills and functions into equipment as in computer controlled machine tools and robots and it increases the flexibility of many processes to achieve economies of scope involving almost continuous production of individualised products. Changes on organisation The changes in products, services and processes discussed above may, in many cases, require new forms of management structure and business organisation. This may be seen happening in many industries but perhaps not fast enough, thus acting as a constraint in the part of other changes. The organisation structure can no more be static but should be capable of absorbing changes fast enough, at least in those organisations where changes in products and processes are occurring very fast, as not to constrain, further changes. To be successful with new technologies, an organisation must be able to innovate and produce competitively. This shows up in the form of compliment organisations where the number of hierarchical levels gets reduced significantly. This also gives rise to higher dependence on task groups, expert committees and other forms of temporary working groups. 7.8.2 Macro effects of technological change After discussing about the major impacts of information technology in the previous section, we would like to revert to technological changes in general and their effects on the economy, its competitiveness and its factor endowments. Let us now describe the major consequences in terms of their macro effects. · Increasing knowledge intensity of production: The growing importance of knowledge inputs in production is clearly visible in almost all industries. In fact, if we include in knowledge, not only R&D but also design, engineering, advertising, marketing and management, then knowledge input may have already become the primary factor of production displacing capital, labour and land in advanced industrial economies. · In many industries, the product life cycle is constantly getting shorter and firms have to spend more and more on R&D to remain at the cutting edge of technology and to exploit any breakthroughs achieved. · Greater mismatch of skills: Technological changes have the general effect of replacing labour with capital. As capital equipment with new technologies enters the production process it has two intense effects: a The employment level of personnel concerned with the production and distribution of products comes down

a The skills required to work with the new generation of technology change. In combination with other economic forces, the first effect continues to reduce the share of employment devoted to the production of goods, while expanding the service sector. The second effect changes the skill-mix of employment more abruptly as certain skills end up having practically no or little economic value. · Erosion of competitive advantage of developing countries: The developing countries have traditionally been having the competitive advantage of cheap and abundant labour and some natural resources. However, as described above in the previous sections, the labour component (unskilled and semi-skilled) in many manufacturing activities is falling, giving rise to an erosion of this important competitive advantage. Self Assessment Questions 15. The Successful integration of technological considerations into the ____ process is very essential 16. Every technology eventually reaches a ____ phase due to the development of better technologies in terms of performance and/or cost 17. Technological changes have the general effect of replacing labour with capital. (True/False)? 7.9 Summary We started this unit by giving a brief introduction on the aspects and issues in technology management. We studied about the technology changes and discussed its characteristics that are grouped into nature and impact of technology change, impact of technology change and determinants of technology change. We classified the technology change as incremental, entrenching and altering changes. Further, we discussed that the impact of technology change can be direct or indirect, based on their occurrence and the structure of organisation and society We also learnt that the changeover from old to new technology is characterised by the creation, addition, alteration and at times even undesirability of tasks, functions and their dependent occupations. We also came across the technology life cycle which includes innovation, syndication, diffusion and substitution stages. We further discussed about technology policy and technology instruments, wherein we studied that the technology policy declaration typically contains several commitments on behalf of the Government and some categorical assurances. We also analysed that country·s technology development strategy is determined by discovering the technological requirements with potential technological expansion in the world and a thorough assessment of existing and emerging technologies. In addition, successful integration of technological reflection into the socio-economic planning process is very essential. 7.10 Glossary Term Commercialisation Description To relate methods to business to gain profit. A potential solution to the health service delivery problems.

Skill mix

Typology 7.11 Terminal Questions

The systematic study of various types that has characteristics in common.

1. Explain technological change. 2. Explain technology policies and technology instruments. 3. Briefly describe technological development options and strategies. 4. Briefly explain diffusion and growth of technology. 5. Write about technology transformation. 7.12 Answers Self Assessment Questions 1. Altering changes 2. True 3. Circuit modification 4. Knowledge 5. Innovation 6. True 7. Collective stage 8. Technology life cycle 9. True 10. Commitments 11. True 12. Technology policy 13. Government 14. True 15. Socio-economic planning 16. Turn down

17. True Terminal Questions 1. Refer section 7.2 Technological Change. 2. Refer section 7.5 Technology Polices and Technology Instruments. 3. Refer section 7.6 Technology Development Options and Strategies. 4. Refer section 7.8 Diffusion and Growth of Technology· 5. Refer section 7.4 Technology Transformation. 7.13 Case Study The XYZ Company develops and maintains the legacy commercial trust information and hazard management system. Most of the financial services companies have been benefited by XYZ. The company aimed to conform to the web support solutions suitable to the business and technological strategy. In order to become more flexible with business and improve its technology, it wanted to transform its desktop based application into a web based application. Challenges: The company intended to build a common reusable technological framework, to alter and restore all legacy applications. It ensured to create minimum modifications to users, which means the alteration to the front-end should bring in only few changes in contrast to the previous framework. It also wanted to bring a common toolset for the web -based solution along with the future enhancement in java (JSP/JSF for presentation), Hibernate (Object Relational Mapping), oracle 10G Database (Database server) and Apache Tomcat Web/Application server for business logic processing. Further, it aimed to accomplish a successful Proof of Concept (POC) that will serve as a roadmap to transfer from legacy applications to web-based solutions. Solutions: The company involved ABC to meet their future requirements. ABC was initially found to assist the clients with offshore development works. The developmental works undertaken by ABC was numerous. It maintained a team to accomplish the tasks involving project mangers, coordinators and technical developers. Initially, it analysed the existing desktop XYZ applications business processes, codes and reports and developed hibernate objects. It designed the architecture for web application, database and technical processes. In order to match with desktop graphical user interface (GUI), it developed web-front using JSP/JSF. It conducted the unit test and system test for its various applications. Ultimately, ABC was able to complete entire java GUI, application and data layer structure at correct time and budget. Further, it assisted its clients in their outstanding works to ensure timely delivery. Questions:

1. Discuss about the ABC Company. 2. Explain the transition process from legacy application to the web based application.

OM0018-Unit-08-Technology Generation and Development
Unit-08-Technology Generation and Development Structure: 8.1 Introduction Objectives 8.2 Technology Generation Process Determinants 8.3 Technology Development Process Determinants Technology development approaches 8.4 Importance of Technology Generation and Development 8.5 Need for Technology Strategy 8.6 Importance of Research and Development (R&D) Corporate research and product lifetimes Production costs and R&D Translation of R & D efforts to technology 8.7 Summary 8.8 Glossary 8.9 Terminal Questions

8.10 Answers 8.11 Case Study 8.1 Introduction Previous unit familiarised us with the different aspects and issues in technology management, including the change in technology, the life cycle of technology, and transformation of technology. Apart from these aspects, the unit enabled us to understand the different technology policies and technology instruments. We also discussed about different technology development options and strategies, the relationship between technology and socio-economic planning, and diffusion and growth of technologies. In this unit, we will study about the generation of technology, wherein we will study the process of technology generation, its importance, and its determinants. We will also study about the technology development, which will enable us to understand the technology development process, and the different technology development approaches. We will also analyse the need for technology strategy. We will also discuss about the importance of ¶Research and Development· (R&D), and its efforts are translated to technology. This unit will enable us to understand the importance of technology generation and development. Objectives: After studying this unit, you should be able to: · Explain the process of technology generation and development, and its importance at the national and enterprise levels. · Explain the need for technology strategy for continued competitiveness and growth of a firm. · List out the determinants and their relationships in technology generation. · Describe various approaches available for the development of technology at enterprise level. · Identify the importance of R & D. · List out various inputs required to translate the R & D efforts to technology. 8.2 Technology Generation We will start our discussion with the meaning of ¶technology generation·. Technology generation and development is often identical with the term "Research and Development (R&D)". However, technology generation involves R&D efforts, while technology development involves further stages of translating R&D efforts into marketable products, processes and services. Basically, we can consider the R&D process as having four distinct stages as shown in figure 8.1.

Figure 8.1: Stages of R & D Process As per the figure 8.1, the recognition of a need for innovation is one of the inspirations for R&D. A ´Research" on existing knowledge for satisfying identified need helps in idea generation-this is theµ need pushµ which is shown in the figure 8.1. The other primary motivation for R&D is to find potential applications for advances in knowledge. ´Research" on existing activity for introducing new knowledge also helps in idea generation-this is the ´technology pushµ as shown in the figure 8.1. The ´development" includes creation, design and production and marketing of the generated idea. Through the entire process, its ideas and knowledge which are being followed, and the process is not complete, until the new idea is converted into a marketable product or service, which can be a hardware or software intensive technology. Let us understand the objectives of Corporate R & D and R&D Projects. Corporate research and development is the principal corporate asset for long-term technological competitiveness. We can classify corporate research activities by the purpose of the research: · To support current businesses. · To provide new business enterprise. · To explore possible new technology basis. The R&D projects tend to go through the following stages: · Basic research and invention. · Applied research and functional prototype. · Engineering prototype and testing. · Production prototype and pilot production. · Product testing and modification. · Initial production and sales.

The first three stages are usually called "research", while stages four to six are called "development·; hence, the term "research and development (R&D)". Each stage of innovating a new product is expensive, with the expense increasing by an order of magnitude at each stage. The management decisions to continue from research to development are therefore very important. Overall, the expenses of modern industry for R&D were considerable. The major purpose of research is to reduce technical risk before production-scale investment is committed. It is generally reported that at each stage, the cost rises by orders of magnitudes in the ratio 1:10. It is precisely this reason, that technology generation and development is costlier than basic R&D, and hence all countries or all enterprises are not able to pursue these activities at similar levels. 8.2.1 Process As we are discussing about the technology generation, let us now discuss about the process of technology generation. Let us have a look at an illustration of the various inputs required for generation of technologies in Figure 8.2.

Figure 8.2: Process of Technology Generation In the figure 8.2, goals, surroundings, criteria and resource allocation are some of the inputs to R&D, the output of which is technology. The input resources into R&D organisations are the traditional inputs such as money, materials, facilities, energy, labour and management, and the intelligence-based inputs such as science, knowledge, skills, information and existing technologies. The effectiveness of any R&D is determined in terms of the ¶usefulness· of the technologies it produces with respect to the overall objectives of the corporation Besides these factors, the R&D or technology generation involves many other aspects such as, monitoring and evaluation of R&D projects, funding of R&D, training and development, resource personnel, interactions at all levels, management policies and support, the availability of support structures and incentives at government level, timely collection and interpretation of technical and other information. The quality of resource leadership and commitment of the top management for research is extremely important. In Indian industry or corporate sector, it is generally observed that the research personnel occupy secondary place to finance, marketing and production personnel, and are not given due importance in decision-making at corporate level. Sometimes, inefficient personnel from other departments are posted or transferred to R&D

department, thereby indicating a complete neglect of R&D concept. Such management attitudes need to be changed in the overall interest of the company. 8.2.2 Determinants After the process, we will now discuss about the determinants in technology Generation. The main determinants of technology generation are the stages of skills and abilities of the associate, its competitors and supplier network, as well as the competitive environment. The higher level of local capabilities and competitive environment will lead to a better quality of the initial transfer and rapid upgrading. Many of the multinational corporations invest in supporting the in-house skills and technical knowledge to a great extent, with a view to achieve efficient production, but not necessarily to raise the capabilities to the next level of technology. In order to achieve this, countries require policies, which: · Modify the competitive atmosphere and encourage promoting the use of world-class technologies and management methods. · Improve the skill base and employee training. The policies should help to raise the quality of labour force outside the firm and ensure to provide better training to the employees within the firm. · Motivate the investors to shift into more complex technologies, and promote the technological functions undertaken locally. · Improve the technology access for local enterprise, by providing information on foreign and local sources of technology. Self Assessment Questions 1. Technology generation and development is often identical with the term ________. 2. The effectiveness of any R&D is determined in terms of the ¶usefulness· of the technologies it produces with respect to the overall objectives of the corporation. (True/False)? 3. Many of the multinational corporations invest in supporting the in-house skills and technical knowledge to a great extent with a view to achieve efficient production but not necessarily to raise the capabilities to the next level of _________. Activity 1: Imagine you are generating a technology for your business. What are the necessary inputs you will consider for it? Hint: Goals, surroundings, criteria. 8.3 Technology Development The previous section familiarised us with technology generation along with its process and determinants. This section will help you to understand its development.

Though, broadly speaking, the ¶D· of R&D covers ¶Technology Development·, the latter has much wider implication. For better understanding, more elaboration of various factors that determine technology development is described in this section. 8.3.1 Process Let us first study about the process of technology development. The various stages of technology development process or life cycle, starting from the generation of ideas in the R&D department, to estimate market and inputs required, to execute projects, to perform trials and modifications are depicted in figure 8.3. We may observe that this process is tedious and requires top management commitment and support from outside. Risk factor is large and the success rate depends upon the quality of inputs provided to the R&D department.

Figure 8.3: Technology Development Process

8.3.2 Determinants As we are studying about technology development, we will now study about the determinants in technology development. You can see the determinants and their interrelationship in technology development from R&D to technology diffusion and substitution are shown in figure 8.4.

Figure 8.4: Determinants in Technology Development A per the figure 8.4, natural resources are assembled and processed through the succeeding stages. The supply factors include natural resources, human resources, fund allocation, and produced resources. The demand side factors include market potential venture capital and enterprise profitability. The coordinating organisations, supporting facilities and government policies and systems have a major role to play in the success of the technology development process. 8.3.3 Technology Development Approaches This section will give us a brief idea about the approaches of technology development. · In-house R&D: Technology development activities are generally carried out through setting up of separate in-house R&D units within the business, managed and headed by a well-qualified and experienced chief, directly reporting to the top management. However, this unit has close interactions with other departments within the company and there could even be exchange of personnel among different departments. The strength and facilities in the in-house R&D unit would depend upon the technology policy of the company and the nature of the business. In large companies, there are sometime R&D labs for each department and a central R&D lab for major R&D projects. Industrial R&D is mostly product or process oriented with specific objectives and time schedule; and not basic research. Incremental developmental efforts or import substitution efforts are generally common in most of the industries in developing countries including India, while emphasis is on new technologies or new applications of technologies in advanced countries.

· Co-operative R&D: A group of companies in a particular industrial sector promotes an R&D centre as a society or a non-profit making company. The R&D is funded by the participating companies and the government. This R&D centre undertakes R&D as per the requirements of the companies in their larger interest, and sets up expertise and facilities of common nature and which are usually expensive. A company can also support specific projects to this centre. Cooperative research facilities are normally utilised for the projects which are not of cautious nature from the business point of view. Otherwise, most important part of the R&D can be done at the centre and the remaining part involving finer details or critical technological aspects affecting the competitiveness is done at the in-house R&D division of the company. · Contract research: A company may contract components of technology development to suitable R&D organisations, academic institutions, or consultants or experts. The in-house R&D unit may coordinate the progress of the activities, to develop the desired technologies. This approach usually requires considerable internal technological and managerial capabilities coupled with a strong Science and Technology (S&T) information base. · R&D collaboration: A company may collaborate with another company in areas of common interest, if costs of development are high. Such inter-firm collaborative R&D efforts are becoming common in developed countries mainly due to high costs and shorter technology life cycles. It is found in areas such as micro-electronics, materials, information technologies, bio-technologies, and so on. A firm may also collaborate with the public funded or privately funded R&D institutions on case-to-case basis, where R&D results are shared mutually, and so are the expenses. A company in India may even collaborate with another company or R&D institution abroad, on mutually agreed terms. · Research societies: Large corporations or industrial houses may set up independent research societies, in addition to their in-house R&D units. Such societies may undertake R&D activities mostly relating to the broad interests of the promoting companies in line with the national interests. They will also take advantage of those facilities for the activities and programmes in their in-house R&D unit. Governments usually encourage such societies and provide several tax concessions and financial incentives. · Research companies: Large firms of technology innovative industrialists may support research companies, specifically for conducting research and development of technologies for others on commercial basis. The development costs and reasonable profits are recovered from the sale and transfer of technologies. Such a concept is common in USA, and other developed countries while it is yet to gain recognition in developing countries such as India. A company may adopt any of the approaches or a combination of the approaches depending on its needs and resources. Self Assessment Questions 4. Technology development activities are generally carried out through setting up of separate _____ units within the business, managed and headed by a well-qualified and experienced chief, directly reporting to the top management. 5. The coordinating organisations, supporting facilities and government policies and systems have a major role to play in the success of the technology development process. 6. Risk factor is large and the success rate depends upon the quality of inputs provided to the __________. Activity 2:

Suppose you have to create a document on ¶development of technology·. Enlist the steps to develop a new technology that you can add in your document. Hint: Various stages. 8.4 Importance of Technology Generation and Development As we are now familiar with both the technology generation and technology development, we will now study about their importance. Distributed Energy Systems· Technology Generation group is committed to the development of practical, real-world energy solutions to meet their customers· evolving needs. Through new product development, key strategic relationships and industry leading solutions, they are focused on meeting present commercial needs while advancing the innovation required creating future energy choices. Partnering with commercial, as well as the government entities like the US Department of Energy, National Renewable Energy Laboratory, National Science Foundation, NASA and California Energy Commission, the Technology Generation group is advancing technologies in several core areas. · Hydrogen fuelling systems: Distributed Energy Systems is developing hydrogen fuelling systems to meet the needs of an increasing number of fuel cell electric and convenient power applications. Individuals, task force, and communities seek out the hydrogen fuelling systems because they are available in a range of production capacities and produce pure hydrogen. · Military & Aerospace hydrogen applications: Leveraging the core proton exchange membrane (PEM) technology, Distributed Energy Systems designs, develops models and builds solutions to meet the needs of commercial aerospace partners and civilian and military government agencies. From high pressure electrochemical cells to high energy density regenerative fuel cell (RFC) energy storage systems, the work is being developed for low earth orbit (LEO) and geosynchronous earth orbit (GEO) satellites, high altitude airships and high altitude winged aircraft. These advanced technologies also have applications in ground-based and marine environment. · Backup power and renewable-to-hydrogen systems: Regenerative fuel cell technology can be used in a wide range of backup power applications including telecommunications, critical loads, peak shaving, remote geographies, and load levelling in finest power markets. In an effort to look for ways to extend present resources, the technology has been used and validated with renewable sources of energy such as wind and solar. To meet the growing demand for electrolysers for hydrogen-based renewable energy systems, Distributed Energy Systems has developed the HOGEN RE hydrogen generator. As the next evolution of the company·s advanced proton exchange membrane (PEM) electrolyser, the HOGEN RE generator incorporates sophisticated power electronics to make integration to renewable power sources easy and efficient. · Megawatt wind turbine technology: Distributed Energy Systems has developed an advanced gearless drive train design for megawatt (MW) scale wind turbine applications. This slow speed permanent magnet generator directly coupled to the blade hub, and connected to the grid with an advanced power converter platform offers advantages in efficiency, reliability and performance. They have also designed and tested a 1.5 MW slow speed permanent magnet generator for direct drive wind turbine applications and developed and commercialised a power converter platform for wind and related applications based on their FlexPhaseŒ power module technology. Self Assessment Questions

7. Distributed Energy Systems· ___________ is committed to the development of practical, realworld energy solutions to meet their customers· evolving needs. 8. Distributed Energy Systems is developing hydrogen fuelling systems to meet the needs of an increasing number of fuel cell electric and convenient power applications. (True/False)? 9. To meet the growing demand for electrolysers for hydrogen-based renewable energy systems, Distributed Energy Systems has developed the _________ hydrogen generator. 8.5 Need for Technology Strategy This section will give you an overview of the need of technology strategy. Whether or not an organisation would generate or develop its own technology and with what intensity it would follow, the efforts in this respect would depend upon technology strategy it has planned or adopted. Though the term ·strategy· is commonly used as an antonym of ¶tactics·, it actually implies longterm, purposeful and interconnected efforts. While tactics means the action to deal with immediate specific problems. ¶Technology Strategy" may accordingly be defined as a strategy to deal with the technology and related issues at macro and micro levels, with respect to set objectives. Let us have a quick overview of types of technology strategies and their need. · Macro-level strategy: At macro level, each country outlines and adopts a technology strategy to achieve its political, economic and social objectives and translates the same into action through appropriate policies and mechanisms. These strategies may be different for different countries. For example, US may adopt to excel in "defence" or "warfare technologies" or in generation of first stage new technologies for knowledge-based industries, while Japan may decide to excel in technologies for consumer products of newer designs at lower costs. Korea may decide to adopt and upgrade imported technologies using mass production techniques for consumer products without really caring much for high quality levels. Also, without bothering for defence or other strategic applications. On the other hand, India may decide to develop its own capabilities in strategic areas such as defence, atomic energy and space where technologies are usually closely guarded or for maximum utilisation of its own resources. Thus, technology strategies may vary with the national perspectives, and accordingly policies and mechanisms are evolved and implemented. Financial resources play an important role in evolving the technology strategies. Depending on the resources available and the will of the government, the policies are evolved, mechanisms are set up and measures are taken to ensure the achievement of the set objectives. · Micro-level strategy: The extraordinary range and potential uses of contemporary technology have important consequences for industrial and commercial firms. The industrial and organisational disorder produced by technological change, and increased international competitive pressures provide threats and opportunities for firms. An effective strategic approach to technology allows firms to cope better with these changes, and reduces the threats and insecurities facing them and their employees. The basic role of technology strategy in business planning is to help ask the questions like: what business the corporation plans to be in and how it should be positioned? Effective planning identifies the present decisions required to create desirable and competitive corporate futures. In particular, technology strategy must anticipate the transient impact of technological innovation

on the future competencies of the corporation. An appropriate level of formal planning provides systematic and documented strategy. The inputs to the process occur through participation of staff and line management and of special planning groups. Technology scenarios should help management focus on the interaction of changes between technology and change in markets, resources, regulation and competition. Importance of technology strategy ¶Mark Dodgson· has identified the following five issues which bear on the importance of corporate strategy for technology: · The need to cope with technological uncertainty. · Complexity and discontinuous nature of technological development. · The need for technology to be viewed in a global context. · The need to attain complementarities. · The relationship between corporate strategy technology and public technology policies. Linking business and technology strategy: According to ¶Fredrick Betz·, the basic role of technology strategy in any business planning is to pose three fundamental questions: · In what business should the firm engage in future? · How should the firm be positioned in these businesses? · What research, production and marketing will be necessary to attain those positions? Formulating a technology strategy In planning technology strategy for competitive advantage, the following steps have been suggested: · Identify all the distinct technologies and sub-technologies in the value chain. · Identify potentially relevant technologies in other industries or those under scientific development. · Determine the likely path of change of key technologies. · Determine which technologies and potential technological changes are most significant for competitive advantage and industry structure. · Assess a firm·s relative capabilities in important technological aspects and the cost of making improvements. · Select a technology strategy, encompassing all important technologies, that reinforces the firm·s overall competitive strategy.

· Reinforce business unit technology strategy at the corporate level. Self Assessment Questions 10. _________ may accordingly be defined as a strategy to deal with the technology and related issues at macro and micro levels, with respect to set objectives. 11. According to ¶Fredrick Betz·, the basic role of technology strategy in any business planning is to pose three fundamental questions. (True/false)? 12. Select a technology strategy, encompassing all important technologies, that reinforces the firm·s overall _________. 8.6 Importance of Research and Development (R&D) After discussing about the technology generation and technology development, and the need for technology strategy, we will now discuss about the importance of R&D projects in corporate research and the relation between R&D and production costs. 8.6.1 Corporate research and product lifetimes R&D projects in corporate research create and extend the lifetimes of corporate products that avoid technological obsolescence of businesses. Extending product lifetimes can be done by: · Improving the production processes to lower production costs and increase quality. · Upgrading and improving current product models. · Creating next generation product models. The function of corporate research is to create and extend the lifetimes of the company·s products. This is an essential function because all products have finite lifetimes which can extend to a period of one year or many years. In times of new and rapidly changing technologies, lifetimes tend to be short. A mature technology product may have a very long lifetime if no clearly superior technology has emerged. But even in a long-lived product, periodic reformulations, variation in product lines, and changes in packaging provide some change in the product. To maintain a long-lived product, quality must be maintained on balance with competing products, if not more, and cost reduction in production must be ahead of competitors. 8.6.2 Production costs and R&D Production costs of new products usually decline over times, due to process and product improvement. In any new product line, initial production costs are usually much higher than later production costs. All new products based on new technologies have initially high per unit product costs, because of: · Large R&D and plant investment costs. · Small volumes of initial production. · Inefficiencies in the production processes and in production design.

For a successful product, these factors improve over time. The increasingly larger volume of production also lowers per unit overhead charges. Innovations and improvements in production processes create more efficient production procedures. Market share, Profit margins, Pricing strategy These are also highly dependent on R&D efforts at corporate level and the efficiency at which R&D is carried out. The entry into a new high technology market is restricted because knowledge is new and is not widely known. Products then are high priced because sales volume is small and production costs are high. Yet, if the price is held there too long, other competitors can enter with technology products, since high profit margins and growing markets provide the competitive incentive. However, if prices are reduced in anticipation of production costs being increased in future, a competitor has less incentive to enter, and may incur losses. The strategic trick is for the technology innovator to ride the markets faster than the competitors and enter new products earlier than others. It is precisely due to this reason that open competitiveness encourages innovations as happens in advanced economies while restrictive policies and assured markets through licensing systems discourage innovations. 8.6.3 Translation of R & D efforts to technology This section will examine the relationship between R&D capabilities and technology commercialisation, and innovation performance in IT-related businesses. The R&D was focussed on influencing the innovation performance of firms which resulted in a significant impact on innovation. The research implication of this decision is that the measurement of firms· performance should not only depend on the intensity of R&D expenditures, but a broader set of factors, including learning and external networking capabilities. The technology commercialisation capabilities of firms participated as the role of a mediator in the relationship between R&D and innovation performance. Within the innovation cycle of input (R&D capabilities), process (technology commercialisation capabilities) and output (innovation performance), it is found that R&D occasionally influence performance in an absolute fashion. But its consequence was most often resolved by technology commercialisation capabilities. The practical assumption of this decision to the companies is that, in order to enhance their performance they must avoid closely focusing on R&D. Instead, they should also invest in capabilities to commercialise technologies resulting from R&D. When direct and indirect benefits of public R&D funding are compared together, the explanatory power of the relationship between R&D capabilities, technology commercialisation capabilities and innovation performance were stronger among the latter than the former. Self Assessment Questions 13. R&D projects in corporate research create and extend the lifetimes of corporate products that avoid ________ obsolescence of businesses. 14. Production costs of new products usually decline over times, due to process and product improvement. (True/False)? 15. The entry into a new high technology market is restricted because ____ is new and is not widely known.

8.7 Summary We started this unit by giving a brief introduction on technology generation and development. We understood that ¶technology generation and development· is comparable with the term "Research and Development (R&D)". On the other hand, technology generation engross R&D efforts, while technology development involve additional stages of translating R&D efforts into profitable products, processes and services. We also came to know that recognition of a need for innovation is one of the inspirations for R&D. We further classified R&D projects into the following stagesbasic research and invention, applied research and functional prototype, engineering prototype and testing, production prototype and pilot production, product testing and modification and initial production and sales. We learnt about the process of technology production wherein we saw goals, surroundings, criteria and resource allocation as some of the inputs to R&D, the output of which is technology. We analysed that the effectiveness of any R&D is determined in terms of the ¶usefulness· of the technologies it produces with respect to the general objectives of the business. We learnt about the main determinants of technology generation, which includes the stages of skills and abilities of the associate, its competitors and supplier network as well as the competitive environment. We further discussed about the technology development approaches wherein we learnt the inhouse R&D and Co-operate R&D, R&D collaboration, Research Societies and Research companies. We also discussed the Technology generation group which focussed on hydrogen fuelling system, military and aerospace hydrogen application; back up power and renewable-to hydrogen system and megawatt wind turbine technology. We defined ¶Technology Strategy" as a strategy to deal by means of the technology and related issues at macro and micro levels, with respect to set objectives. In addition, we learnt about the importance of R&D in corporate research and product lifetime and production costs and R&D, with the affect of R&D on technology. 8.8 Glossary Term Description Passing particularly quickly into and out of existence or producing results beyond itself. It is depositing a small portion of the purchase price or a technique of taking position in the investment. It is the state of being which occurs when an object, service or practice is no longer wanted even though it may still be in good working order. To change or update a plan or idea that is already formulated. A device which is used to breakdown water utilising electricity, into hydrogen and oxygen. It refers to satellite that evolve around the earth with the same speed, but need not be the same distance from

Transient

Leveraging

Obsolescence

Reformulation

Electrolyser Geosynchronous

the earth. 8.9 Terminal Questions 1. Explain Technology Generation. 2. Explain Technology Development. 3. Discuss the importance Technology Generation and Development. 4. Explain the need for technology strategy. 5. Explain the importance of R&D. 8.10 Answers Self-Assessment Questions 1. Research and Development 2. True 3. Technology 4. In-house R&D 5. True 6. R&D department 7. Technology Generation group 8. True 9. HOGEN RE 10. Technology strategy 11. True 12. Competitive strategy 13. Technological 14. True 15. Knowledge

Terminal Questions

1. Refer section 8.2 Technology Generation. 2. Refer section 8.3 Technology Development. 3. Refer section 8.4 Importance of Technology Generation and Development. 4. Refer section 8.5 Need for Technology Strategy. 5. Refer section 8.6 Importance of R&D. 8.11 Case Study The Human Resource (HR) director of R&D was called by the leadership team of ABC to organise a formal training specifically to the R&D people. Even though R&D training programs have been in position in the 1985s and 90s, the programs were neglected in the late 95s due to supply issues and challenging priorities all the way through the company. The present leadership appealed the HR to build up a corporate university. By definition, a corporate university binds business learning efforts directly to primary business goals. Challenge: A whole of six colleges make up the R&D University, one for every level in the company opening with incoming scientists and mangers at group 1 up to directors and top scientists at group 5. The primary goal of these colleges was to bring up the levels of marketable innovation, in large part, by increasing networking across business to encourage cross-fertilisation of thoughts. The leadership was well built, but the problem was to begin the task. Solution: The R&D leadership took the initiative and defined the goals and aspirations. To cause an increase in modernisation by rising networking across various business and success measure and providing training which is equally official and compulsory. The leadership defined the scope of the program as being limited to R&D people and lead to the success of having R&D people teach other R&D people. The formal training provided a way to establish this tradition which was lost during the last decade of global growth. By covering all these steps, HR was ready to design its next stage- design the college. This was accomplished by the HR by building up a task force to create the R&D colleges. The task force was headed by the HR leader and R&D leadership encouraged the people to become members. The professionals of R&D represented the various business units and scientific disciplines. A lot of questions were raised during the decision process and the choices led to the successful formation of the R&D University across five levels of the organisation. The victory of the college is well received all over the R&D. The main aim of the program was to increase networking with the hope that networking would direct to greater innovation. Questions:

1. Explain the issue that lead to the establishment of corporate University along with the challenges faced. 2. Discuss the steps taken to accomplish the desired task.

OM0018-Unit-09-Technology Transfer
Unit-09-Technology Transfer Structure: 9.1 Introduction Objectives 9.2 Transfer of Technology 9.3 Models of Technology Transfer Traditional technology transfer models Qualitative technology transfer models Other models 9.4 Technology Transfer Modes 9.5 Dimensions of Technology Transfer 9.6 Features of Technology Package 9.7 Routes of Technology Transfer 9.8 Summary 9.9 Glossary 9.10 Terminal Questions 9.11 Answers 9.12 Case Study 9.1 Introduction Previous unit familiarised us with technology generation and development. In the previous unit, we studied about the process and need of technology generation and development, determinants in technology generation and development, development approaches, and about R&D. In this unit, we will study about technology transfer, its models including traditional models, qualitative models, and some other famous models. We will also study about technology transfer modes, such as passive mode, semiactive mode, active mode, and horizontal and vertical transfer. We will have a brief discussion on the dimensions of technology transfer, features of technology package, and the routes of technology transfer. This unit will enable us to use appropriate model for transferring a technology.

Objectives After studying this unit, you should be able to: · Define technology transfer. · Explain the models of technology transfer and their uses. · Describe technology transfer modes. · Explain the dimensions of technology transfer and features of technology package. · Identify routes of technology transfer. 9.2 Transfer of Technology We all are familiar with the term ¶technology·, so let us start our discussion with the meaning of transfer of technology or commonly called as ¶technology transfer·. Basically there are two ways of acquiring a new technology: either develop it or purchase it. The second way of acquiring new technology, that is, purchasing a new technology, is commonly called "technology transfer". In the process of technology transfer, there are sellers whom we call "transferors" or "licensorsµ as well as buyers whom we call "transferees" or "licensees". You must note that no transfer of technology can take place unless and until we put the technical knowledge to use. We can not only include scientific or engineering items, but also some factors such as, the manufacturing, marketing, distribution and customer service, in technology transfer. Let us have a look at some of the key factors included in technology transfer. · Transplantation of technology involves shift from one set of well-defined conditions to another set in which at least one key variable may differ. Secondly, the recipient may apply the technology to a different purpose from that of the supplier. · A sense of advantageousness prevails in the transfer of technology, whether asserted or not. · The transfer process embraces a rich variety of mechanisms and relationships between recipient and donor (supplier of technology). The process can vary from a routine people-less passive transfer to turnkey contract where the donor takes the full responsibility for all phases of the contract. · The nature of the technology that is transferred, and the way it is transferred are critical to the success of the process of technology transfer. Technology transfer may initiate as an answer to the problems of others. Adoption of such outside solution to solve an ¶inside· problem is technology transfer. Though it provides solution for problem, there are some issues which you have to face during planning and managing technology transfer. We can classify these issues into three categories, which are: · Technology transfer process issues. · Corporate capability issues. · Operating environment and National Innovation System (NIS) issues. We will now discuss about these issues. Let us start with a brief discussion on the types of issues that you may face during planning and managing the transfer of technology, as given in figure 9.1.

Figure 9.1: Types of Technological Transfer Issues ³ Technology transfer process issues: The word technology transfer process refers to the steps or the stages in the transfer of technology. Thus, you may have to face problems during all the stages, such as, justification and selection stage, planning stage, negotiation stage, and implementation stage. Let us have a look at the problems you face during these stages. Justification and selection stage issues · Misjudgements during the preparation of a business case for a technology transfer may lead you to select wrong technology. · The technology may cost too high to purchase, install, operate, and maintain. · The technology you have selected may be too complex to understand easily and to interpret the transferee. · The technology may need to adjust considerably to suit for local conditions. Planning stage issues · While transferring the technology to a developing country setting, the transferor may misjudge the problems incurred in it. · Transferor may not understand the needs of the transferee completely. · Transferor may need to manage the planning process when the transferee manager is not involved in it. · The transferor and transferee may have different objectives. · You may have not chosen appropriate mechanisms to implement the transfer technology. Negotiation stage issues · There may be different negotiation approaches and strategies. · Transferor and transferee may not trust each other. · Both transferor and transferee may have inappropriate goal during negotiations. · Both transferor and transferee may fail to accomplish agreement on price, product, and market strategies. Technology transfer implementation issues · Transferors may not have skilled technology transfer managers.

· Transferee may not trust in transferor developed systems. · Transferors may fail to accomplish quality targets. · Transferors may get delayed in obtaining additional materials, needed for fast operation, from the local environment. · The cost may be too high due to poor implementation. · Corporate capability issues: After discussing about technology transfer process issues, we will now study about some issues related to the capability of the company, that is, corporate capability. Issues due to inadequate skills · The transferee may fail to attract the essential skills due to economic and business limits. · Transferee·s employees may not have experience and they may not have essential skills at the industry level. · The transferee personnel may not be provided required training. · Transferee may do not have encouragement systems to learn and assimilate new technologies. Issues due to ineffective management · Transferors may not have perceptible and dedicated top management support for the project. · Transferor and transferee managers may have different working methods and practices. · The competition for the ownership of the technologies among Individual or organisation, and there may be ´notinvented-hereµ syndrome. · Top managements may fail to identify the transferee and transferor personnel who would work thoroughly from the beginning of the project till implementation. · Operating environment and NIS issues: After discussing about two types of issues, we will now discuss about another type of issues, namely, operating environment and NIS issues. · Local markets are reducing due to unfavourable changes in the economic levels of the country. · The physical infrastructure may be poor. · The mechanisms to protect intellectual property may be insufficient. · They may depend more on foreign suppliers and imports. · They may do not have good education and training institutions to improve skills. · They may have limited foreign exchange facility. · The tax environments may be unclear. Self Assessment Questions 1. Purchasing a new technology is commonly referred as ___________. 2. Technology transfer may initiate as an answer to the problems of others. (True/False)? 3. Transferor and transferee managers may have _________ working methods and practices. 9.3 Models of Technology Transfer

As we are now clear with the concept of technology transfer, let us now study about models of technology transfer. Like some other concepts related to technology, technology transfer also has some models associated with it. First, let us have a look at some traditional technology transfer models. 9.3.1 Traditional technology transfer models · The appropriability model: This model indicates the significance of research quality, and the pressure in the competitive market, in achieving the technology transfer. It also emphasises the promotion of the use of the findings of the research. As per this model, the process of transfer of technology takes place, when the users have been found by the technology, or the competitive market has discovered the technology. · The dissemination model: This approach makes a suggestion for the diffusion or dissemination (distribution) of the significance of technology and innovation, to the possible users. Experts should do this dissemination. This model believes that an expert, who will transfer the technology, will transfer the knowledge only to the user, who is willing. The limitation of this model is that it offers one-way communication only. · The knowledge utilisation model: This model gives priority to the importance of communication between the technology developers and the technology users, and the importance of the barriers existing in an organisation, of technology transfer. The focus of this model is on the effective organisation of knowledge. Some researchers have argued that this model a limitation of linear biasness. This model helps in reduction of the complexity in the process of technology transfer to a process with ordered stages. Till now, in this section we have studied different traditional models. Let us now have a look at qualitative technology transfer models. 9.3.2 Qualitative technology transfer models There are several technology transfer models. They are · The Bar-Zakay model: This model is based on a project management approach, and was introduced by Bar-Zakay (managing partner of films, who focussed his practice on personal injury and wrongful death law). As per this model, we can divide the process of technology transfer into four stages: · Search. · Adapt. · Implement. · Maintain. This model specifies the activities to be carried out and also accentuates the importance of both transferor and transferee to expertise for undertaking technological forecasting, long-range planning, and gathering of projectrelated intellect. In this model, the term ´donorµ is used, which refers to the transferor and gives an impression that the owner of technology is giving away a valuable asset out of selfless reasons. A disadvantage of the BarZakay model is that the activities, terms, and facts expressed in this model had reversed the position of the consumers (mainly passive) of technology who trusted on the programs supported the purchase of technology to a greater extent during the period 1960 to 1970. And during that period the government controls were used to identify the speed, direction, and value of technology flows. The Bar-Zakay model helps us to learn some facts, which are: · The need of comprehensive examination of the technology transfer process from search stage all through postimplementation stage. · Adoption of a process approach to plan and implement the technology transfer projects. · The need of objectives and decision points to strengthen the activities, to correct the mistakes, or even to terminate the projects at any point of time.

· The Behrman and Wallender Model: Behrman (an American playwright and screen writer) and Wallender (fictional inspector of books and film) introduced a process for international technology transfer which is more applicable to multinational corporations. As per this model, we can divide the process into seven stages, which are: 1. Develop scheme and plan to attain decisions regarding location and prepare a business case which includes good resource consideration. 2. Decide the product design technologies to be transferred. 3. Specify details of the plant to be designed for production, and other aspects related to construction and infrastructure development. 4. Construct the plant and start-up production. 5. Adapt the process and product (if needed) and strengthen the production schemes to suit basic prerequisites. 6. Improve the product technology transferred by means of local skills. 7. Provide external support to strengthen the interdependence between the transferor and transferee. The only disadvantage of this model is that, during the first three stages, the transferor develops the technology transfer project where transferee is not involved much, thereby emphasise dependency. On the other hand, the transferee is involved in the fifth and sixth stages, which helps in understanding and improving product and process technologies. This emphasises the technology transfer does not completes with the start-up of production unless there is a mechanism to foster assimilation the project is rejected to have delivered. The Behrman and Wallender model helps us to learn some facts, which are: · The transferee must involve in the process of technology transfer project from the beginning. · The initiation of production doesn·t mean that a technology transfer project is completed. · If the measures taken are not accurate to ensure adaptation of the transferred technology, the technology transfer is said to be unsuccessful. · The Dahlman and Westphal Model: Dahlman and Westphal introduced a process on the basis of their experience of work carried out in the Republic of Korea, speedily industrialising countries, during 1980. As per this model, we can divide the process into nine stages, which are: · Perform pre-investment feasibility study to gather information and perform a techno-economic study to ascertain project potential. · Perform a preliminary identification of technologies required, based on the feasibility study performed. · Perform basic engineering studies which include the preparation of layouts, process flow diagrams, and other design specifications of the plant and mechanism and the core technology to be transferred. · Perform an engineering study in detail which includes the preparation of a civil engineering plan in detail that includes specifications based on manufacturing and installing and identify the peripheral technology required for the effective technology transfer. · Select the suppliers for equipment and contract out services to assemble the plant and mechanism and plan for the co-ordination of the work among various parties. · Set up and implement a guidance and education plan for the workers who are probably working in the technology transfer project according to the consultation with the suppliers of technology. · Construct the plant.

· Start-up with operations. · Build up trouble-shooting skills and start up activities to solve design and operational issues as they come up, particularly during the first few years of operation. This model emphasises the involvement of the transferee at all the stages during planning and implementing process of technology transfer project. Thus, it may refer to as an improved model over Behrman and Wallender model. The major disadvantage of this model is that it assumes that the transferee has the access to high level engineering skills. Since, this is not true in many developing countries. Also it pays less attention for negotiation and post-implementation stages. The Dahlman and Westphal model helps us to learn some facts, which are: · A sequential process is required to study the technology transfer. · A careful feasible study on the technology transfer projects has to be done before beginning the project since those projects requires serious resource commitments. · The transferee must be involved in the planning right from the beginning. · Transferees must develop necessary good engineering and project management skills without which the process of technology transfer cannot be handled effectively. · The Schlie, Radnor, and Wad Model: Schlie introduced a simple, universal model for technology transfer process. This model describes seven elements which manipulates the planning, implementation, and ultimate success to any technology transfer project. These seven elements include: · The transferor, who sells the technology to the recipient. · The transferee, who buys the technology. · The technology that has to transfer. · The transfer mechanism chosen for the transfer the preferred technology. · The environment in which the transferor is working. The transferor environment characteristics can manipulate the effectiveness of the transfer process. It includes: -Among others. -Financial status. -Business point of reference (inward versus outward). -Constancy (Stability). -Attitude and obligation to the transfer project. -Operating policies. ð The environment in which the transferee is working. The transferee environment characteristics can manipulate the absorptive capacity of the transferee. It includes: · Physical and organisational infrastructure. · Availability of skills. · Attitude and obligation to the transfer project.

· Technological status. · Financial status. · Business point of reference (inward versus outward). · Stability. ð The larger environment that surrounds both the transferor and the transferee. This environment has three layers; they are sub-regional, regional, and global. If the layers of the larger environment will not uphold, then it will affect the cross-border and international technology transfer even if the immediate operating environments of the transferor and the transferee are favourable to the technology transfer. Factors that influence the success of technology transfer project in the larger environment are: · Political relationships between countries. · Exchange rates. · Investment background. · Trade negotiations. · Balance of trade. · Relative technological levels. · Status of intellectual property protection government. The seven elements of this model are suitable even in today·s business environment. The way they establish themselves can change with respect to time. The only disadvantage of this model is that it does not offer any guidelines to a transferee that what it should do. This model helps us to learn some facts, which are: · When planning and implementing a technology transfer project, various changes that had taken place and are taking place in the worldwide business environment today is helpful for the managers of technology to develop good insights into the transferee, transferor, and larger environments. · We have to choose the technology transfer mechanism based on a sophisticated understanding of the other six elements. · The Chantramonklasri Model: Chantramonklasri further improved the Dahlman and Westphal Model. Chantramonklasri introduced the model having five phases. Which are: · Carry out a study on pre-investment and feasibility. · Develop engineering specifications and design based on the study on feasibility. · Initiate the production of principal goods based on the developed engineering specifications and designs. · Commission and include ample of the workforce. · Initiate commercial production. Though the first two phases are valid, it is not clearly mentioned whether the required principal goods can be produced within the transferee environment unless the transfer arrangement also includes the transfer of technology needed to manufacture these. This model may be valid in technologically developed countries, such as, India and China, but not in other smaller developing countries.

9.3.3 Other models After discussing about traditional and qualitative models of technology transfer, we will now discuss about some other famous models of technology transfer. · Bridging agencies: There are some agencies because of whom the transfers of technology take place, comprises of government departments, industries, financial institutions, consultants, venture capital companies, research companies, and R&D organisations, and so on. We can call these agencies as the bridging agencies as given in figure 9.2.

Figure 9.2: Bridging Agencies The users of new technologies include industries both from the private as well as the public sector, agencies that are very large and technically oriented, such as, ISRO (Indian Space Research Organisation), government departments, AEC (Atomic Energy Commission), and so on. It can be seen that a wide spectrum of participants in the total economy are technology users. · Research and diffusion model: As per this model, the simplified diffusion of technology from an agency that is mission-oriented assists the technology development with the intention of its mission, and then makes arrangements for the technology diffusion to other industries by knowledge transfer. You can see this in figure 9.3.

Figure 9.3: Research and Diffusion Model This is usually a slow process. · Problem solver model: As per this model, the generation and transfer of technology, acts as a companion of problem solving, as given in figure 9.4.

Figure 9.4: Problem Solver Model Self Assessment Questions 4. Behrman and Wallender introduced a process for _______________ which is more applicable to multinational corporations. 5. The ______________ must involve in the process of technology transfer project from the beginning. 6. The initiation of production doesn·t mean that a technology transfer project is completed. (True/False)? 9.4 Technology Transfer Modes Previous section familiarised us with the traditional and quality models developed for the technology transfer process. This section will familiarise us with the different modes of technology transfer. Basically technology transfer is categorised into passive and active modes. The modes of technology transfer refer to the transferor·s role in the application of technology to solve the user·s problem. The technology transfer is called active, if the transfer methods assist the possible user in its application. In active mode, the transfer process goes after the interpretation of the transmitted information, suggests the user how to use the technology, or shows the applications of the technology for the apparent use. However, there may be an intermediate mode also, known as semi-passive mode. In semi-passive mode, the transfer activity is in the middles of the other two modes, that is, active and passive modes. Let us have a look at some examples of technology transfer modes. · Passive mode: The technology transfer is called passive, if the transfer methods offer the technology to the possible users without assisting them in their application, such as by a report or oral presentation. In passive mode, technology transfer is also known as knowledge transfer. · The published literature is the most well-known and widely used form of passive technology transfer. It is illustrated in the figure 9.5 (a).

Figure 9.5 (a): Technology Transfer (Passive Mode) As per figure 9.5(a), there is no direct communication or assistance from the originator of the technology, to the producer of finished consumer item. Even though, in technology transfer, thousands of products are produced and consumed from passive mode, that is, the transfer of knowledge, there is no straightforward communication. Some of the forms of passive technology transfer are television repair manuals and how-to-do-it guides-for home repairs. · Semi-active mode: In this mode of technology transfer, the function of the agent of technology transfer (in addition to self-education or self-recovery of elements of technology transfer) is somewhat limited, as illustrated in figure 9.5(b).

Figure 9.5 (b): Technology Transfer (Semi-active Mode) The technology transfer agent (consultant or technology expert) screens available pertinent information for product development. Here the function of transfer agent is only to interpret or communicate. He will not actively get involved in the application of the technology. · Active mode: The active mode of technology transfer takes forward the procedure to an actual form. In this mode, the technology transfer agent or consultant will be fully involved and acts as a bridge in technology transfer from technology source to entrepreneur or implementing agency. · Horizontal and Vertical technology transfer: In horizontal technology transfer, the technology transfer is from one firm to another. The horizontal transfers occur normally between the firms in various countries, mainly because of the competition and advancement or near advancement of technologies. In vertical technology, the technology transfer is done, from an R&D organisation to a firm. The vertical transfers are done mainly inside the country and the recent technologies may frequently need additional efforts in terms of setting up commercial viability. Such a transfer has huge risk. Let us have a look at some technology bases, along with their technology transfer modes, and relevant users or needs, in table 9.1. Table 9.1: Connecting Technology with Users TECHNOLOGY TRANSFER MODES

TECHNOLOGY BASE

USERS / NEEDS Traffic Safety

Engineering Communications

Emergency Health Care Crime Prevention Public Transportation

Medicine Electronics

(Passive or Active)

Drinking Water Quality Energy Conservation

Energy Structures

Urban Construction so on. Private Sector Industry Agriculture

Chemicals Materials Computers so on.

Mining Consumer Products Automotive

Medicine so on. Self Assessment Questions 7. Technology transfer is categorised into _________ and __________ modes. 8. The __________ mode technology transfer carries the process through to an actual. 9. In ____________ approach the technology transaction takes the form of supply of complete factories and industrial plants by a developed country to a developing country. 9.5 Dimensions of Technology Transfer After studying about the different modes of technology transfer, we will now study about the dimensions of the technology transfer. The time and resources required to transfer a given technology depend upon: · What is actually transferred? · The mode of transfer. · The incorporation abilities of the receiving enterprise. · The abilities and inspiration of the supplier enterprise. The technology progress varies in character, that is, whether it is transferring or diffusing. We transfer technology from an enterprise to an individual, and diffuse the technology from an individual to an enterprise. To understand the implication of the culture, you must praise the variation between transfer and diffusion. The advancement of the technology depends on the combined effect of transfer and diffusion. From the above concept, we can say that the individual is the pivotal point of technology movement, whether transfer or diffusion. It conveys you the concept of cultural dimension. Several years ago, a minibus manufacturing plant was closed in Pakistan. A program of ten years for the transfer of built-up and market technology had failed. The buses produced were identical with those successfully built and marketed in foreign country. But in Pakistan, they could not maintain the building-up quality. The sale of buses was dull, and required excessive maintenance and repair. They could not find the solutions even after the investigation of the problem. So, they left their program forgetting their whole experience. Actually, the problem was with the bus and not with the customers. Since the vehicle was designed as per the supervision and administration of British manufacturing plant, distribution and marketing organisation. It was designed to be driven in England or similar environments where repair services and spare parts will be easily available. As we find difficult to adjust with the foreign culture, technology is also not culture free. Those creating and applying technology perform within the context of their culture, and incorporate it into their work. In our discussion, the manufactured product works with the culture from which it came. The same is true for other technologies like, refineries, electric power stations, mining machinery, computerised information systems, engineering, education, and so on. So, either the technology must adapt different culture or the people who use the technology must adapt to the culture used in the technology for successful transfer. Usually, the combination of both is required for the successful technology transfer. If it is transferred without any adjustments can be referred to the result of blind luck. Most recently developed technologies are embedded with ´westernµ type cultural qualities, including that available from developed countries. Most of these qualities are considerably different or do not exist in other cultures. However, they influence both the transfer and successful application of the technology. The qualities often include: · The problem-solving method and logic. · The decision making social authority structure.

· Taking initiative action for analysis value. · The time management and plan as it relates to tasks and activity. · The relationship between performance and incentives. · The view and appreciation of pre-emptive action to prevent future problems. · The social suggestion including questionnaire, conflict and confrontation. · Source of personal status in the work place and society. · The relationship of fatalism and self-determination. · The vertical and horizontal orientation to organisational authority. Self Assessment Questions 10. Technology is _________________ is from the organisation to an individual, and the technology is _______________ from an individual to organisation. 11. Most recently developed technologies are embedded with ____________ type cultural qualities. 12. Either the technology must adapt _________________ or the people who use the technology must adapt to the culture used in the technology for successful transfer. 9.6 Features of Technology Package In the previous section, we learnt about the dimensions of technology transfer process. In this section, we will learn about the features of technology packages. You are now familiar with technology transfer, and you might be thinking that what technology package is. So let us start with the definition of technology package. Technology package is nothing but the technology services, which include estimated market price, annual payments, and so on. The technology package consists of three principal elements, namely, product design, production technique, and management systems. · Product design may range from simple items to highly complex (example, automotive) parts. · The techniques related to production and the layout of the plant comprises of photocopies and flowcharts, formulas, sheets for process, instructions for fabrication, designs of tools and fixture, operational procedures and material specifications. · Management Systems comprises of different plans, blueprints and technical control systems (along with relevant marketing and financial controls). These covers design and blueprint of plant, quality control and testing, acquirement of material, inventory control, techniques for equipment maintenance and repair, and machine loading. The three principal categories of technical information or know-how inherent in technological systems are general knowledge, system-specific and firm-specific knowledge. These various categories of knowledge may be in the form of written fabricating or processing equipment. General Knowledge refers to information common to industry such as blueprint reading, tool and fixture design and fabrication, welding techniques, and so on. Since the technology is a package (or service) type that cannot be viewed, it shows the feature attributes of packages, which includes:

· Indivisibility: Since there are few demanding parties, a lot of time and effort is required to find out apparent customers, unlike product transfer. In particular, industry is gaining good reputation corresponding to company credit- rating and technology capability because of different language, culture, and commercial practice that overseas customers have. · Consumer participation: Technology transfer activities together with objective technology data, technology sales data, document submissions in Korean and local governments and so on needs various documentation systems. As a result, technology peacekeeping troops are needed to accomplish English documentation tasks, negotiation, and contracts. They must be experts in international manner and language skills, financial analysis and marketing research skills, international contracts skills, and communication skills to sensibly persuade counterparts. So, technology transfer responsibilities should be recognised as technology mediation rather than being a duty domain of patent attorneys. · Non-traceability: Since the technology is an indefinable item, it can gain trust only by providing the technology capability as per the customer requirement. In particular, samples or demonstration along with data from public organisations as evidences with authority are essential. The authoritative public organisations may include the patent office, testing and research centres, and so on. · Difficulties in standardisation: The scope of the corporate market can be widened with the help of technology transfer. In terms of market size and opportunities and overall good market expansion opportunities, growth and revenue are very important factors that can be gained respectively without production facilities or operation funds. 9.7 Routes of Technology Transfer After discussing about the features of technology package or services, we will now discuss about the routes of technology transfer. The principal routes of enterprise-to-enterprise technology transfer are: · Licensing or Franchise: Licensing and Franchise arrangements vary from a complete package of instructions, technical assistance and training to mere permission for the manufacture and sale of a product. · Suppliers of materials and parts: Suppliers of materials and parts are often willing to provide a full range of technical support, information and manufacturing know-how, and they can be as effective in know-how transfer as in industrial licensing arrangements. The manufacturing of colour TV sets in India is a classic example of this type. The manufacturers did not have a formal technology transfer agreement but had an understanding with the foreign suppliers of materials and components regarding technical assistance in production. · Equipment supplier: A variety of technical services are provided by equipment suppliers, including operational· and maintenance procedures and even processing know-how (typical in chemical industry). As we know that some technologies are machine-based, therefore the ability is shifted along with the plant and equipment supply. · Outright purchase: Outright purchase of turnkey plants or of the whole manufacturing and operating conditions, drawings, ability, data related to performance and technical support. · Acquisition: Acquisition of the company or business possessing the technology. · Joint ventures with the owners of the technology. Self Assessment Questions 13. The technology package consists of three principal elements namely, _____________, _________________, and _____________ systems. 14. The scope of the ___________ market can be widened with the help of technology transfer. 15. The manufacturers did not have a formal technology transfer agreement but had an understanding with the ____________ suppliers of materials. 9.8 Summary

In this unit, we studied about the concept of technology transfer, wherein we studied about the key factors included in technology transfer, and the issues occurring during the planning and management of technology transfer, namely, technology transfer process issues, corporate capability issues, and operating environment and NIS issues. We discussed about different models of technology, including traditional, qualitative, and some other famous models. In traditional models, we studied about the appropriability model that emphasizes on promoting the use of research findings, dissemination model that signifies the distribution of technology and innovation, and the knowledge utilisation model that focuses on the effective utilisation of knowledge. In qualitative models, we studied about the Bar Zakay model, Behrman and Wallender model, Dahlman and Westphal model, Schlie, Radnor, and Wad model, and the Chantramonklasri model. In other famous models, we studied about the bridging agencies, research and diffusion model, and the problem solver model. Thereafter, we discussed about the modes of technology transfer, namely, passive mode, semi-active mode, active mode, and horizontal and vertical technology transfer. We also discussed about the dimensions of technology transfer, such as time, and so on. Then, we studied about the features of technology package, such as, indivisibility, consumer participation, non-traceability, and difficulties in standardization. We also studied about the routes of technology transfer, such as licensing or franchise, suppliers of materials and parts, equipment supplier, acquisition, and so on. 9.9 Glossary Term

Description A discussion or communication held between individuals to settle or agree with, as per the satisfaction of both individuals, especially in business matters. The average of all the differences between estimation and observation over the verification sample. An enterprise that has a sufficient control over a particular product or a market and manipulate prices. Dependence between transferor and transferee.

Negotiation

Linear biasness

Monopoly Indivisibility

9.10 Terminal Questions 1. Define technology transfer. 2. Explain the models of technology transfer and their uses. 3. Describe technology transfer modes. 4. Explain the dimensions of technology transfer and features of technology package. 5. Explain the routes of technology transfer. 9.11 Answers Self Assessment Questions 1. Technology transfer 2. True 3. Different 4. International technology transfer

5. Transferee 6. True 7. Passive, active 8. Active 9. Turnkey 10. Transferred, diffused 11. ´Westernµ 12. Different culture 13. Product design, production technique, management 14. Corporate 15. Foreign Terminal Questions 1. Refer section 9.2 Transfer of Technology. 2. Refer section 9.3 Models of Technology Transfer. 3. Refer section 9.4 Technology Transfer Modes. 4. Refer section 9.5 Dimensions of Technology Transfer and section 9.6, Features of Technology Package. 5. Refer section 9.7 Routes of Technology Transfer. 9.12 Case Study ABC Company-technology transfer process ABC Company is part of a multi-site, continent-wide organisation, offering its customers the chance to attain a complete range of chemical and developed solutions from one single dealer. This ranges from rapid Active Pharmaceutical Ingredients (APIs) supply for preclinical use to large-scale production of intermediates and APIs. A competent technology transfer process is the key for a successful transfer either from the customer to ABC Company or amongst the ABC Company sites. With the process of the ABC Company, high potency plant in India, expertise in the technology transfer process will be of considerable advantage to ABC Company customers. Technology Transfer Process Complex, multi-step processes under both Good Manufacturing Practice (GMP) and non-GMP have been positively transferred. For transfer outside Switzerland, a specialist team follows a three-stage method: 1. Initiation - the options and objectives are agreed upon by all parties ± planning of technology transfer major plan, explanation of responsibilities, as well as planning and transfer of technical material; 2. Piloting - the process is tested in the lab and in small manufacture runs and broadly revised ± agreement with regulatory and quality standards; and

3. Sign-off - the jointly agreed process is accepted by all parties± production against conventional group guidelines. A vital component in successfully transferring technology developments across language and social obstacles is common communication involving their experienced staffs. Flawless explanations of the responsibilities of the technology transfer team members during the transfer process lessen the time and effort needed for this dire step in the positive scale-up of intermediates or APIs. Cost and Feasibility Aspects For a Japanese client, a multi-stage manufacture process for a non-GMP intermediate was performed at ABC Company¶s Manchester site and then transferred to India in six months. A chemist from Manchester held the allocation on-site. There, the production now runs in 300 kg sets to a five metric ton drive. An additional volume growth to run a 28 metric ton drive is scheduled for the end of 2008 in India. The transfer was compelled by the scale of production. Questions: 1. Give a brief introduction about ABC Company. 2. Describe the technology transfer process handled by ABC Company. 3. Explain the cost and feasibility aspects of ABC Company for the Japanese client.

OM0018-Unit-10-Technology Assessment
Unit-10-Technology Assessment Structure: 10.1 Introduction Objectives 10.2 Technology Choice 10.3 Technology Assessment Process 10.4 Technology Leadership and Followership 10.5 Technology Concepts Technology acquisition Meaning of innovation and creativity Innovation management 10.6 Summary

10.7 Glossary 10.8 Terminal Questions 10.9 Answers 10.10 Case Study 10.1 Introduction Previous unit familiarised us with the transfer of technology. In the previous unit, we studied about the different models, modes, and dimensions of technology transfer, features of technology package, and the routes of technology transfer. This unit will familiarise us with the concept of technology choice. In this unit, we will study about the process, that is, different phases of technology assessment process. We will also have a discussion on technology leadership and followership. We will also study about different technology concepts used in an organisation, such as technology acquisition, innovation and creativity, and innovation management. This unit will enable us to understand the process to carry out technology assessment. Objectives: After studying this unit, you should be able to: · Describe technology choice. · Discuss about technology assessment process. · Explain technology leadership and followership. · Define technology acquisition, innovation, creativity, and innovation management. 10.2 Technology Choice Let us start our discussion with the concept of ¶technology choice· used to assist in the success of an organisation. Choice of technology has significant involvement in growth and productivity of an organisation. The use of technology is always related to an objective. Because we can use different types of technologies to realise an organisation·s goals, but the issue of choice arises. The effective choice depends on previously decided measures for a technology·s conference specified requirements. In addition, it depends on the ability to identify and evaluate opportunities in different technologies. The expected result is that the organisation will go for the most "appropriate" technology (AT) in this situation. The technology choice in the framework of society and its creation is the idea of imaginary assumptions and are the key sources of meaning in social and cultural life. Imaginary assumptions can be considered as conscious or unconscious symbolic representation of human actions in the creation of meaningful and sense making ideas. Symbolic representation proposes implications which require perceptions of not only the real or rational, but also an additional imaginary

component. This eventually comes from the original ability of positing or presenting oneself with things and associations that do not exist and have never been given in any depiction. The social world is, in every situation, constituted and expressed as a function of such a system of implications. These implications exist after they have been formed, in the method of what we call the actual imaginary or the imagined. These imaginary designs play an important role in modelling the choice of ¶symbolic representation· constituted by the world, and especially the choice of its organisational symbolism as well as the ends to which it supports ¶functionality·. In the perspective of technology choice, we can say that imaginary implications are the result of both rational technology based economic behaviour and complex imaginary struggles that emerge at various points and in many shapes by providing archives of meaning about the content of technology and its application. These implications and dominant interests are reflected in the shape and functioning of technology in imaginary practice. This is an imaginary field which individuals and institutions create in order to maintain and show ¶representations· and ¶projections· of possible alternative realities and ideas of possible fate related to the content and application of a technology. Because of this balance between the assumed, the real and the imaginary components of these implications, the technology and its choice encloses not only the preferred technology based economic implications of the technology itself, but also the engraved imaginaries of technology in society, work, and institutions. For example, the acquirement of certain technologies can simultaneously provide verification of membership of certain social groups, indicate cherished relationships and include imaginaries about knowledge practices, expertise and relations to other actors by encouraging new aspects of subjectivity. Self Assessment Questions 1. The concept of _____________ deduces access to information on alternative technologies and the capability to assess these efficiently. 2. Imaginary implications can be apprehended as conscious or unconscious ________________ of human actions in the creation of meaningful and sense making ideas. 3. The technology choice in the structure of society and its institutions is the idea of real implications as the key sources of meaning in social and cultural life. (True/False)? 10.3 Technology Assessment Process As we are discussing about the technology assessment, and in the previous section we have discussed about the technology choice, so we will now discuss about the process of technology assessment. We can say that the process of technology assessment comprises of recurring cycles of planning, data gathering, and reporting results. We can classify these three cycles into nine steps, as given in the figure 10.1. Technology assessment has been defined as a form of policy research that assesses short-term and long-term results of the application of technology. Instructional technology assessment involves recurring cycles of planning, gathering data, and reporting. It is good to plan the technology assessment at the same time we coordinate the technology introduction, so that we can take necessary steps such as collection of baseline data. Figure 10.1 explains the technology assessment process.

Figure 10.1: Technology Assessment Process 1. Description of technology and context: In the first step of technology assessment, we must describe the technology we are going to use, in terms of the function or intention or purpose of the technology, its possible affects, and the resources that are required. 2. Identification of stakeholders and their requirements: In the second step of technology assessment process, we identify the stakeholders, and their requirements, that is, their needs. Identification of their needs will help us to aim attention at the technology assessment process, so that we can get good results. 3. Identification of the purpose of assessment: This is the third step of technology assessment process. In this step, we identify the purpose of the assessment of technology. This will help us in determining the procedure of conducting the assessment. 4. Identification of the intended uses of the assessment: In this fourth step of technology assessment process, we identify the intended uses of the assessment. We can define intended uses as the particular ways in which the results of the assessment will be applied. 5. Creation of an assessment plan: This is the fifth step in the process of technology assessment, in which, we create a plan for the technology assessment. This plan is an elaborated description of the procedure of implementation of the assessment, which comprises of the identification of resources existing for the implementation of the plan, information to be gathered, method(s) to be used for research, description of the roles and responsibilities of the stakeholders those were identified in step 2, and time duration for the accomplishment of the tasks. 6. Data gathering: This is the sixth step in the process of technology assessment. In this step, we gather data as per the assessment plan. Data gathering comprises of the indicators, sources of the data to be gathered, and methods to use, information quality and quantity, and the relevance in which the data gathering occurs. 7. Analysis of data: After gathering the data as per the assessment plan, analysis of that data takes place. This analysis of data covers the identification of patterns in the data, either by

isolating the significant findings (analysis) or by combining information sources to reach a larger understanding (synthesis), and making decisions about the procedure to organise, divide, interrelate, compare, and display information. We guide these decisions by the questions being asked, the types of data existing, and input from the stakeholders. 8. Making conclusions and recommendations: After analysis of gathered data, we made conclusions and recommendations wherever needed. Whatever conclusions we made, connected to the proof gathered and verified against agreed-upon standards set by stakeholders. And, the recommendations we made are the actions for consideration that are based on the conclusions we made, but go beyond simple verifications about efficacy or interpretation of the proof gathered. 9. Reporting results: This is the final step in the process of technology assessment. In this step, we report the results of the assessment. We must consider some factor while reporting the results. These factors are: ð Creating a report content for the audience. ð Describing the aim of the study and its limitations. ð Listing both the strengths and weaknesses of the technology. You must note that the first five steps are covered under the ¶planning· cycle, sixth step is covered under the ¶data gathering· cycle, and the remaining three steps are covered under the ¶reporting results· cycle. Self Assessment Questions 4. Technology assessment has been defined as a form of policy research that examines short-term and long-term ____________ of the application of technology. 5. Instructional technology assessment involves recurring cycles of planning, gathering data, and reporting. (True/False)?

Activity 1: Suppose that you are the manager of a company and the company is going to conduct a technology assessment process. What steps would you follow to effectively implement the process? Hint: Analysis of data. 10.4 Technology Leadership and Followership After discussing about the process of technology assessment, we will now discuss about technology leadership and followership. The most important issue an organisation must address in technology strategy is whether to look for technological leadership. The concept of technological leadership is relatively clear as an organisation strives to be the first to introduce technological changes that support its basic strategy. Sometimes, all organisations that are not leaders are viewed as technological followers,

including organisations that ignore technological change on the whole. Technological followership should be a meaningful and dynamic strategy, in which a firm unambiguously chooses not to be first on innovations. Even as technological leadership is sometimes considered in terms of product or process technology, the issue is much broader. Leadership can be developed in technologies involved in any value activity. We will focus our discussion at the strategic choice between revolutionary innovation in any value activity and waiting for others to revolutionise. Organisations tend to view technological leadership mainly as a vehicle for achieving demarcation, while acting as a follower is considered the method for achieving low cost. If a technological leader is the first to implement a new lower-cost process, then the leader becomes the leading low-cost producer in the market. Or, if a follower can learn from the leader·s mistakes and modify product technology to meet the needs of customers better, the follower can become the market leader. It is also possible to have more than one technological leader in an industry because of the various technologies involved and the different types of competitive advantage required. The organisations can choose to be a technological leader or follower in a significant technology on the basis of three factors: · Sustainability of the technological lead: The extent to which an organisation can hold its leadership over competitors in a significant technology. · First-mover advantages: The advantages an organisation has from being the first to implement a new technology. · First-mover disadvantages: The disadvantages an organisation suffers by moving first rather than waiting for others. All three factors cooperate with each other to determine the best choice for a particular organisation. Large disadvantages of being a first mover may eliminate the interest of taking the leadership role even if an organisation can sustain its technological lead. On the other hand, firstmover advantages may transform an initial technological lead into a sustainable competitive advantage in another place though the technological lead itself disappears. First-mover advantages and disadvantages take place most often in the perspective of technological choices, but their importance for competitive strategy formation goes beyond technological strategy. They answer the most prevailing question of how timing transforms into competitive advantage or disadvantage and into entry and mobility obstacles. Where there are leaders there must be followers. This common-sense fact is strangely ignored by much of the management content. It is generally said that we are all leaders, because we all have to take up leadership roles at certain times. Similarly, we are all followers at certain times. Even at the most senior levels in firms, there are situations when it is crucial to exhibit the skills of followership which are: · To listen politely to someone else·s idea, and understand it. · To offer useful suggestions skilfully without undermining the other person. · To accept a brief, even when you do not fully understand the whole framework.

· To take directed action in collaboration with others. Excellent followership is necessary to business success, especially at senior and middle executive levels. The job of followers is to make the work easier for someone to lead. In case you might have observed that actually sometimes the process is reversed. In large organisations we frequently notice that, people making it difficult for someone to lead. Following are the observations: · Absence: Nobody can lead if the team itself is not there. In industry, this often means that the project team members fail to give assurance, and are engaged in another job. · Concealment: The leaders can make good decisions only when they have the information they need. As well as disguising material data, such as unspent budget, an uncooperative follower will mislead with their own opinions and concerns, and so prevent the leader from handling real potential issues. · Inaction: A leader always acts through the help of others. This only works if the followers do what they are supposed to do. It occasionally happens that people say ´yesµ in the conference room, and then go out and do some other job. This makes leadership more difficult. A skilful follower communicates sincerely, so that a leader can act on the basis of full information. So, it is evident that the skills of followers are also very essential. In a busy corporate world, a skilled follower balances the inconsistent demands of line management and project management, and work and personal life, so that the follower is present and dedicated when required by the team. This ability of followers to stabilise and focus is a talent that makes leadership possible. This talent is specifically important in a business where someone might have several managers, is a part of several project teams and needs to manage personal commitments too. Self Assessment Questions 6. Technological followership should be an insignificant and inactive strategy in which a firm unambiguously chooses not to be first on innovations. (True/False)? 7. Sometimes all organisations that are not leaders are viewed as ________________, including organisations that ignore technological change on the whole. 8. A skilful follower communicates ____________, so that a leader can act on the basis of full information. Activity 2: Suppose that you are in a multi-national company. You are working on a new project under your project manager. What are the skills you should develop and follow to succeed in the organisation? Hint: Listen politely. 10.5 Technology Concepts

In the previous section, we studied about technology leadership and followership which helped us to understand the importance of leaders as well as followers. Now we will study about the technology concepts used in an organisation. The quality of life sustained by a society is directly and positively related to the level to which people understand and efficiently use existing technology, as well as innovatively develop new technologies, while considering the key scientific, financial, social and environmental aspects. But in order to address the need for technology concepts for technological literacy in modern society, technology education must be more than the concepts and learning of handicraft skills, as was practised. It means that a more hypothetical component must be added to the practical dimension that already exists. In other words, not only skills, but also concepts of technology need to be trained and learnt. Here, we have to differentiate between two levels: one is the general concepts of the nature of technology (¶concepts of technology·) and a second level dealing with the hypothetical concepts that are used in technological action (¶concepts in technology·). Recognising the role of non-realistic aspects in technology does not mean denying the fact that theoretical concepts also have a significant role. Though, it is clear that conceptual knowledge is a crucial component in technological design and problem solving processes. Studies in design methodology have revealed that design processes are a combination of knowledge about concepts and process knowledge such as technical, situational and strategic knowledge. In addition, the understanding of our technological world is also a necessary component of technological knowledge. 10.5.1 Technology acquisition We will first discuss about technology acquisition. Internal technology acquisition is the outcome of technology development efforts that are instituted and controlled by the organisation itself. Internal acquisition requires the existence of a technological facility in the organisation. This facility could vary from one expert that understands the technological application effectively to manage a project conducted by an outside research and development (R&D) team to a full-fledge R&D department. It also includes the less popular process of seizing implicit knowledge which means understanding and codifying knowledge that already exists within the organisation, but is not properly understood or widely used. Internal technology acquisition alternatives have the benefit that any development becomes the special asset of the organisation. In addition, the resulting technology will be modified to meet the company·s need. However, internal development also has problems. The development of technology usually takes more time than acquiring and implementing previously existing technology from external sources. Internally-evolved technologies usually are costly than those acquired externally. This is mainly because the development costs are often disregarded against the application for which it was originally developed. Therefore, those selling technologies usually do not have to recover the full production costs in their selling price. And, it is also a fact that the organisation may not have the capability to develop or even manage the development of a technology internally. External technology acquisition is the process of procuring technology developed by others for use in the organisation. External technology acquisition generally has the benefit of decreased cost and time to carry out, and lesser risks. Nevertheless, almost all technologies available from external sources were originally developed for various other applications. Thus, outside acquisition normally must comprise an aspect of adaption to the acquiring organisation·s application. The acquiring organisation must understand that this adds extra costs, time, and risks to the project.

External acquisition can take the shape of licensing, buying equipment with embedded technology, investment in a collaboration which has a technology development function, or even the acquisition of an organisation that has the required technology. The selection of the external acquisition channel generally depends on the channel that has the required technology accessible. Supposing the technology is available from different sources, the choice becomes a corporate decision where costs and advantages of each choice are compared and the best overall alternative is selected. It is significant to take into account all the factors before making this decision. The importance of fairly elusive things like long-term relationships and public reputation must be considered along with more technical issues like the robustness of the technology to the requirement, quality issues, function, and price. 10.5.2 Meaning of innovation and creativity Businesses, for-profit and non-profit, are facing radical transformations like never before. Several driving forces to this transformation included a speedily broadening market, and increasing competition, diversity among consumers, and the existence of new types of technology. We can say that creativity and innovation are the main components to the success of a business, especially during strategic planning, and when developing new products and services. Creative knowledge and innovation are mostly helpful during strategic planning and in ¶product and service management·. We can define innovation as the process by which a value is made and given to a community of users in the form of a new solution. We can also use innovation to explain a new product or service, which is the result of the innovation process, which delivers value to a community. In either case, the key elements of the definition are originality and value delivery. We will now briefly discuss about four kinds of innovation, which are: · Architectural innovation: Innovation of this kind discusses the foundation ingredients of product and process and creates the technical and marketing plans that will guide successive development. · Market place innovation: Innovation of this kind opens up new market opportunities with the help of existing technology, the effect on production and technological systems being to preserve and strengthen established designs. · Regular innovation: Innovation of this kind entails change that is created on established technical and production capability and that is applied to existing business and customers. The effect of these changes is, to establish existing skills and resources. · Revolutionary innovation: Innovation of this kind disturbs and provides established technical and production capability outdated, but yet it is useful to existing business and customers. Creativity, comparatively, is the ability to imagine new concepts. It is important to remember that creativity does not bear the burden of value creation that innovation does. On the basis of this reason, it is not suggested that concepts are displayed for merit, in brainstorming sessions. This allows the brainstorm expert the unlikely comfort of asserting success in generating many creative ideas, even when the result is deficient of value. If implementation is setting an idea into practice, creativity is the generation of the idea in the first place. Creativity is an important part of innovation as it is the point of exit. One of the big concerns for many organisations is how to create more and better ideas and how to become more innovative. Let us have a look at some features of creativity.

· As opposed to common belief, creativity is the act of generating an idea and is an essentially individual act. It is the development of an idea and its execution where the team is required. · Creativity has little implications with the inspiration out of things. Creativity is not something where a person who has never worked in that area suddenly gets an excellent idea. Creativity is based on a concept to a particular structure of knowledge. The existing structure of knowledge is as crucial as the original idea. In fact, creative people spend their whole lifetime acquiring and cultivating their knowledge base ² be it music, mathematics, arts, sports, and design. · However, creativity may be well-organised; it depends much more on natural motivation, on people being enthusiastic, motivated and knowledgeable. 10.5.3 Innovation management Let us now briefly discuss about innovation management. We can define ¶innovation management· as the process of managing processes in innovation. We can use it for creating and executing both product and organisational innovation. Without suitable processes, it is not possible for R&D to be effective. Innovation management comprises of a set of tools that allow managers and engineers to work together with a common knowledge of goals and processes. The main priority of innovation management is to make the organisation able to respond to an external or internal opportunity, and use its creative capabilities to introduce new ideas, processes or products. Significantly, innovation management is not referred to R&D. In fact, it involves employees at every level in contributing creatively to an organisation·s development, production, and marketing. By applying suitable innovation management tools, management can activate and deploy the creative efforts of the whole work force towards the constant development of an organisation. The process can be seen as an evolutionary combination of organisation, technology and market by recurring series of activities such as search, choose, implement and capture. Innovation processes can be stretched to any extent through development. A pushed process depends on existing or newly invented technology, that the company has access to, and tries to find cost-effective applications to use this technology. A pulled process tries to search areas where customer·s requirements are not fulfilled, and then concentrates development efforts to find solutions to those requirements. To succeed with the help of either method, knowledge of both the marketplace and the technical problems are required. By creating multi-functional development teams, comprising of engineers and marketers, both problems can be solved. The lifecycle of new products is gradually getting shorter as increased competition forcing organisations to reduce the time to market. Innovation executives must therefore reduce the development time, without sacrificing quality or meeting the requirements of the customers. Self Assessment Questions 9. Which are the two levels of technology concepts? 10. Internal acquisition requires the existence of a _______________ in the organisation. 11. The development of technology usually takes less time than acquiring and implementing previously existing technology from external sources. (True/False)? 12. Creative knowledge and innovation are mostly helpful during ____________ and in Product and Service Management.

13. Which type of innovation defines the basic composition of product and process and establishes the technical and marketing plans. 14. The lifecycle of new products is gradually getting shorter as increased _____________ forcing organisations to reduce the time to market. Activity 3: Assume that you are the manager of a company. The company has come up with a new product. What innovation management processes you would follow to check the viability of the product? Hint: Pushed process 10.6 Summary In this unit, we understood the concept of technology choice, which provides access to information on changing technologies and the capability to measure them efficiently. We also analysed the different technology assessment phases involved in the proper functioning of an organisation. Technology assessment is a type of strategy research that examines short-term and long-term consequences of the application of technology. This unit also enabled us to understand the concepts of technology leadership and followership. It is a true fact that where there are leaders, there must be followers. Technology leadership goes beyond managing the day-to-day logistics of a strategic tech planning process. Followers need to remember that their mindset and behaviour affect the quality of their leaders· performance. Followership requires a lot of skill, knowledge, patience, and initiative. Appropriate action by followers often increases the leader·s ability to enable others to perform his or her work. Sometimes, though, followers must find means to reduce the leader·s power for the betterment of the organisation. Deciding on the appropriate course of action may be both difficult and risky for the follower. We also studied different technology concepts, such as, technology acquisition, innovation, creativity, and innovation management. Technology acquisition can be a complex, time taking process that requires thoughtful strategic planning. Due to improper planning, organisations define technology solutions that don·t fully align with their requirements or select uncertain, untested solutions. We generally use the words "creativity" and "innovation" identically, but it is not right. Creativity is about coming up with ideas while innovation is about bringing ideas to life. Innovation is related to performance and growth through improvements in efficiency, profitability, quality, competitive placement and market share. It normally adds value by changing old organisational customs and practices. 10.7 Glossary Terms Description

Appropriate technology (AT) is technology that is designed with special consideration to the environmental, ethical, cultural, social and economical aspects of the community it is intended Appropriate technology for. Technology transfer Technology transfer is the process of sharing of skills, knowledge, technologies, methods of

manufacturing, samples of manufacturing and facilities among governments and other institutions to ensure that scientific and technological developments are accessible to a wider range of users. Something visible that by association or convention Symbolic representation represents something else that is invisible. First-mover advantage or FMA is the advantage gained by the initial occupant of a market segment.

First-mover advantage

10.8 Terminal Questions 1. Briefly describe the concept of technology choice. 2. List and explain the steps involved in technology assessment process. 3. Write a note on technology leadership and followership. 4. Briefly explain the technology concepts. 5. Explain the meaning of innovation and creativity. 6. Write a short note on innovation management. 10.9 Answers Self Assessment Questions 1. Technology choice 2. Symbolic representation 3. False 4. Consequences 5. True 6. False 7. Technological followers 8. Sincerely 9. Concepts of technology and Concepts in technology 10. Technological facility

11. False 12. Strategic Planning 13. Architectural innovation 14. competition Terminal Questions 1. Refer section 10.2 Technology Choice. 2. Refer section 10.3 Technology Assessment Process. 3. Refer section 10.4 Technology Leadership and Followership. 4. Refer section 10.5 Technology Concepts. 5. Refer section 10.5 Technology Concepts. 6. Refer section 10.5 Technology Concepts. 10.10 Case Study Company Profile ABC Company is one of the leading suppliers of electric and gas energy and equipments in the United States. The company engages in the production and allocation of electric energy; and the allocation and transportation of natural gas. As of December 2009, it supplied electric and gas service to approximately 525,634 and 233,941 retail customers. ABC Company also offers steam services, and many other energy-related products and services to customers. The company was established in 1917 and is based in Texas, USA. Challenge: ABC Company has nearly one million electric customers in Texas, Minnesota, and Illinois. For decades, ABC Company has used a feeder monitoring system from XYZ to track power distribution for load analysis, fault detection, and other internal purposes. The system employs 967 meters, which communicate via radio transceivers over power line carrier (PLC). The transceivers interact with one of 27 gateway sites in a 9600-baud peer-topeer network, with the help of packet radio technology. Gradually, meters began failing and replacement parts were needed. Unfortunately XYZ, the original manufacturer, was acquired by some other company, leaving ABC·s system without a clear source of support. There is one other confusing factor, that is, the fact that the meters use PLC technology to interact directly with the radio. Most new meters are serial. A recent serial interface or any other way to interact with the radio transceivers was required.

Solution: Alliant turned to another company MNP for help developing requirements and reviewing technology. One output was a Telecommunications Assessment document that was elaborated and systematic. As ABC formed a team to address the issue, the manager of Technology Development, suggested the project could benefit from the principles of the MNP architecture. That architecture is part of an international industry initiative to develop frameworks for the next generation of energy delivery. An early member of the MNP consortium, ABC contracted with MNP consultants for help and training. MNP used the following technology assessment methods to solve the issue: 1. Use cases which capture the requirements. 2. Technology Assessment Methodology, which maps those requirements to available technology. 3. Systems engineering, this translates the findings from the first two steps into a design for the entire system. The Technology Assessment Methodology also discusses requirements not generally included by use case scenarios. It provided a framework to show which technologies matched up with functional and non-functional requirements. Benefits: Some time back, advantages have leaned heavily on vendor fact sheets and informal, subjective opinions to select their technology path. There was no established, exact technique to assess the alternatives. MNP·s Technology Assessment Methodology steps into that gap. First, it takes the confusion out of the process. Second, the resulting evaluations become valuable in many ways. In spite of the deferment, the process of evolving requirements and executing a technology review has served useful purposes. The MNP·s Technology Assessment Methodology also helps when developing a ´nice to have listµ with which to approach vendors. Questions: 1) What was the problem faced by the ABC company (Hint: Failure of support system) 2) How did the company overcome the problem? (Hint: MNP·s Technology Assessment Methodology)

OM0018-Unit-11- Managing Technology ± Based Innovation
Unit-11- Managing Technology ² Based Innovation Structure: 11.1 Introduction Objectives 11.2 Innovation and Technology Innovation ² Technology relationship Technological innovation and management 11.3 Process of Technology - Based Innovation 11.4 Measures of Innovative Performance Factors Principles Measures 11.5 Characteristics of Innovative Work Environment 11.6 Key Areas of Management Focus for Productive Innovation 11.7 Measures for Building High-Performing Innovative Technology- Based Organisations. 11.8 Summary 11.9 Glossary 11.10 Terminal Questions 11.11 Answers 11.12 Case Study 11.1 Introduction By now we are familiar with the different concepts covered under technology assessment, such as, technology choices, leadership and followership, and also technology acquisition. We also studied the meaning of innovation and creativity and an important concept of technology assessment, namely, ¶innovation management·.

In this unit, we will discuss about innovation and technology and their relationship. We will also discuss about management of technology-based innovation, and how it is implemented in an organisation. We will also analyse the different phases of the process of technology-based innovation. In this unit, we will illustrate the various measures of innovative performance and also the characteristics of innovative work environment. And, finally we will analyse the measures for building high performance innovative technology based organisations. This unit will enable us to understand the relation between technology and innovation, and between technology-based innovation and management. Objectives: After studying this unit, you should be able to: · Explain innovation and technology. · Describe the process of technology-based innovation. · Analyse the measures of innovative performance. · Illustrate the characteristics of innovative work environment · List the key areas of management focus for productive innovation. · Analyse the measures for building high-performing innovative technology-based organisations. 11.2 Innovation and Technology We have already discussed about ¶technology· and ¶innovation· in the previous units. On the basis of previous discussions, we can say that technology and innovation are measured as two separate items, but in reality they work together. Technology comprises of the methods, processes, and systems used to convert resources into products, and innovation is the change in technology. Note that when technology and innovation collaborate they give rise to technology-based innovation called as ¶technological innovation· which is widely used in the corporate world. The success of a technological innovation depends on the diffusion of the innovation to those who can use it effectively. We can define diffusion as the spread of a new idea such as product, technology, service, or method from the moment of its invention or creation to its eventual adoption by an increasing number of users, in different situations. The diffusion process is complete, when: · Adequate numbers of customers are using the innovation to pay back the amount used to develop it. · It starts making profit. Technology diffusion promotes process of technology transfer by taking innovation on broader scale, for better returns to the owner or supplier of technology. Today, organisations must increase their capabilities for technology development and innovation, thus, allowing the constant creation of additional customer value. Many organisations have

introduced technology management, to exploit the results of advancement of technology in the most productive way, to offer more competitive products and services to the market. The management of technology focuses on maximising the cost-effectiveness of investments in technology development and eventually contributing to those organisations· value. 11.2.1 Innovation ² Technology relationship The importance of new technologies and innovations for competitiveness and growth is a platitude among managers, policy makers, and researchers. However, not all new technologies and innovations are successful. Given the various technological opportunities and types of innovations from which organisations can potentially choose, it is desirable to know which innovative activities and technologies are most clearly related with improved competitiveness and growth. Perhaps, understanding of the factors that make the success of new technologies and innovative activities is more important than anything else. We can develop a hypothetical structure that helps in analysing the relationship between technology, innovation, and organisational performance. The performance significance of new technologies, such as information and communication technologies (IT), are mediated by innovative activities that result from the adoption of these technologies. Moreover, the performance parameters can vary across different types of innovation, depending internally of any organisation and market-specific factors. This hypothetical structure serves as a guide for the experimental investigation and understanding its results. The experimental part of the innovation compares the performance of innovative and non-innovative companies. We can evaluate performance in terms of turnover growth, employment development, and productivity. We can classify innovative activities as: · Product innovations or process innovations that are related to Internet-based technologies. · Product innovations or process innovations that are not related to the use of Internet-based technologies. We can define the process or product innovation as the introduction of a good product or service that is latest or significantly developed with respect to its features or intended uses. From the above discussion, we are clear about the relationship between innovation and technology. Let us now study how technology-based innovation is related to management. 11.2.2 Technology-based innovation and management The challenge of management in business organisations is to develop and remain competitive in the market. This enables the organisations to meet their objectives, which can be profit generation, growth, increased market share, or increased employee compensation and job security. Organisations can be successful in market competition when they offer the latest, better, and cheaper products and services that their customers need, and that their competitors cannot provide. Competitive advantage can be defined as the ability to design and deliver things more cheaply and better, or to design new products. It consists of two dimensions. First, relative dimension can be referred as the competitive advantage derived from the activities of organisations compared to those of their competitors. Second, absolute dimension says that there has to be a market for what the organisation does. Technological innovation has an important job both in improving productivity and developing new products and services, and in providing relative and absolute advantages. Undoubtedly, as we move towards what is called the ¶knowledge economy·, technological innovation will become the main priority for competition in the twenty-

first century. The management of technological innovation (MTI) is, therefore, an essentially important activity. MTI involves managing something which is extremely complicated and risky. In addition to the fundamental complications of many products, a key portion of complexity lies in the systemic nature of current industrial production activity. Technology-based innovations such as aeroplanes, cars, buildings, home banking or personal music systems, are made up of various component systems. Computers, for example, comprise central processing units, operating systems, applications software, hard drives, memory cards, power supplies, and communications devices. Integrated Services Digital Networks (ISDN) involves the participation of telephone companies, satellite suppliers, microwave vendors, local area network providers, and value-added network operators. The incorporation of these often highly complex systems is an important MTI task. Self Assessment Questions 1. The success of a ______________ depends on the diffusion of the innovation to those who can use it effectively. 2. The experimental part of the innovation compares the performance of innovative and noninnovative companies. (True/False)? 3. The management of technology focuses on maximising the ________________ of investments in technology development and eventually contributing to those organisations· value. Activity 1: Suppose you are working in a software company. Identify a latest innovation developed and incorporated by the company and also analyse its advantages and disadvantages. Hint: Good productivity. 11.3 Process of Technology - Based Innovation In the previous section, we studied about the relationship between innovation and technology, and technological innovation and management. In this section, we will study the different phases of technological innovation process. We can define the technological innovation process is a complicated set of tasks that converts the concepts and scientific knowledge into reality and the real-world applications, that is, useful products and services. The process requires the unification of inventions and the technologies which already exist, for bringing innovations to the world market. We can classify the process of technological innovation into eight phases as given in the figure 11.1.

Figure 11.1: Technology-Based Innovation Process Let us briefly discuss these eight phases. 1. Basic research: This is the first phase of the process of technological innovation. In this phase, a basic research is done for increasing our basic understanding of the nature laws. We can say that this research is a process of knowledge generation over long time duration. 2. Applied research: After basic research, applied research takes place. In this phase, research is done for dealing with one or more problems of the society and solving them. For example, conduction of research for the development of medicine for a particular known disease. We can say that we gain more knowledge systematically on the basis of existing knowledge. If the applied research is successful, we can develop and implement technology comfortably. 3. Development of technology: This is the third phase of the process of technological innovation. We can define it as a human activity, in which, we transform our knowledge and concepts into hardware, software, or services. This phase may include demonstration of practicability of a concept, verification of concepts of designs, or creation and testing of a prototype. 4. Implementation of technology: After the development of technology, we implement the technology. For implementation of a technology, we perform a set of tasks related with the introduction of a product into the market. This phase includes the first functional use of a concept or a product by the society. It brings about the tasks which are related to assurance for the successful introduction of developed product or service (including cost, and considerations related to the environment). 5. Production: In this phase of technological innovation process, we perform a set of tasks (manufacturing, production control, logistics, and distribution) related to the broad transformation of the design concepts into products and services. 6. Marketing: In this phase, we perform a set of activities for assuring that the consumers accept the technology. This set of activities include the evaluation of the market, strategy for distribution, promotion of the product and services, and judging the behaviour of consumers.

7. Expansion: This is the seventh phase of technological innovation process. This phase includes the strategy and performance of tasks that assures the expansion of the technology in terms of its usage, and the supremacy of the technology in the market. Expansion is dependent on the methods of exercising the technology and on the system used for the technology marketing. 8. Improvement and enhancement: This is the final phase of the technological innovation process, and is related to the improvement and enhancement of technology. It includes carrying out a set of tasks related to the maintenance of the technology·s competitive edge. It brings about improvisation of the technology, development of new applications of the technology, improvisation of quality of the technology, reduction of technology cost, and meeting the customers· needs. Improvement and enhancement of technology increases the life of technology. Self Assessment Questions 4. Expansion is dependent on the methods of exercising the technology and on the system used for the________________. 5. Which stage includes demonstration of practicability of a concept, verification of concepts of designs, or creation and testing of a prototype? 6. Name the final phase of the technological innovation process. 11.4 Measures of Innovative Performance As we are now familiar with the technology-based innovation, and different phases of its process, we will now study different measures of innovative performance. The innovation activity of an organisation is a key driver of competitiveness and economic development. Though the process occurs at an organisation level through skilful management, a company·s innovation performance can be improved by correct policy measures conducted in a business-friendly atmosphere. Thus, the identification of the policy options and instruments available to improve the innovative capabilities of organisations is an important component of any strategy to support better living standards. The establishment of an environment encouraging the innovation activity of an organisation, calls for the management of a number of policies and the related public investment that will assist in shaping the soft and physical infrastructure as well as the administrative structure in which the private sector operates. The national innovation system offers a conventional and business situation that supports the creation and requirement for knowledge as well as its diffusion and incorporation into business activities. Ultimately, the most effective influence of technological innovation on business is market opportunity. Businesses will innovate when they consider innovation as a significant business opportunity. This means that organisations can both identify and understand how to make use of the innovation-driven market. Policies can also provide help to businesses in recognising innovative business opportunities. Innovation by companies also requires good investment to commercialise innovative market opportunities. Capital needs to be carried to innovating companies in an efficient manner to make the innovation process self-reliable. 11.4.1 Factors Let us now discuss the key factors driving the innovative activities of organisations.

· Investment in education that is relevant to business: Educational institutions require connection with business and evolve courses that are related to the operational process that make up national innovation systems. · Support to investment in R&D by both government and business: Governments can encourage private R&D investment by allowing the financial structures to cater the necessary packages to businesses. · Business investment in innovation strategies: This can be encouraged by both relevant education and concessions to influence companies so that they appreciate the need to change. Appropriate management training programmes can support this process. · Providing support and solutions for organisations: Specific policy measures are encouraged to address the issues of SMEs and to provide a favourable environment for such organisations to engage in the marketing of innovative business opportunities. · Establishing strong and self-sustained industry and education linkages: Public policy is a key element for motivating the cooperative efforts of all relevant stakeholders in the innovation process. · Policy needs to steer the development and support of the soft and hard infrastructure that feeds innovative companies: Careful importance should be given to strategy and developing innovation support institutions and the related industry support programmes. · Public-Private Partnership: Collaborative efforts by public and private sector are an efficient and useful way to develop innovation support mechanisms. 11.4.2 Principles The innovative performance in an organisation is guided by a set of principles which help the organisation to succeed in business. Let us study the principles that guide innovative performance. · Innovation data compilation efforts should build on the way organisations assess the effectiveness of their innovative activities. · Data collection should be communicative rather than being based only on theory. Also, the burden on organisations should be minimised as much as possible. · While developing effective ways to quantify innovation in the business priority should be given to the measurement of impact of rules and regulations on innovation. Some regulatory policies may exclusively support innovation. Other policies may have the unintended consequence of inhibiting innovation. Enhanced data on innovation are critical for evaluating the impact that regulatory policies have on innovation. · Due to the nature of innovation and, in particular, the mutual nature of the innovative process, there needs to be acceptance of qualitative and subjective measures. For example, measuring the resources invested in and the results of collaboration may be very significant but also very difficult, especially if such collaborations are informal or if the benefits are subject to spillovers.

· Innovation measurement should not be stagnant, it should be continuously updated. Measurement is a step by step process that needs to be considered not as a ¶project· but as an ongoing ¶dialogue.· Learning and improvement are to be obtained from each stage of the process. As new innovation data are compiled, they should be filtered and continually re-evaluated for their cost- effectiveness and ability to push out the boundary of knowledge about innovation and its impact on the economy. The government needs the support of the researcher community in order to achieve this in a timely manner. · Innovation measures should be analysed at the enterprise, organisation, industry, national, international and where possible, regional Ievels. Enhanced data on innovation should allow industry and sector-specific analysis, recognising that innovation demonstrates itself differently in different parts of the economy. Especially, international comparisons would help explain why different countries are experiencing different economic growth rates. · A conventional approach should be taken to any new data compilation efforts by recognising compromise between costs and potential benefits and considering resource and regulatory issues. The execution of project trials to measure the costs and benefits of new data collection efforts is encouraged. The costs of new data compilation include both direct program costs and the cost burden imposed on possible survey respondents. 11.4.3 Measures There are several issues for measuring the performance related to both new products and services: First, innovation effectiveness is an area of constant concern as senior managers are always involved in assessing their company·s innovation performance. At the same time, most organisations do not have a systematic or standard method of securing either investments in, or returns from, innovation. Consequently, measurement of innovation performance tends to be informal in most companies, with considerable variation in measures used every year. As innovation performance is not measured in a systematic way, it has no significant role in the performance evaluations of senior management. For example, most senior executives have a business target for their department or company, and they are rewarded based on their ability to achieve this target. The methods by which they achieve this growth, however, are usually indefinite. Thus, all the development contributes equally, whether it is from acquisition or from innovation. The measures of innovative performance comprises of three categories which are discussed here: · Results-based measures: It focuses on business results, such as sales or profits, stock price or market valuation. · Process measures: It captures the activities that contribute to these business results, such as number of projects in the planning, time to market, or percent of sales from new products. · Project measures: It looks at the returns and investments from particular innovation projects. Measures which are known as ´time to cashµ or ROI are calculated on a project-by-project basis. Self Assessment Questions

7. The __________ activity of organisations is a key driver of competitiveness and economic development. 8. The _________________ offers a conventional and business situation that supports the creation and requirement for knowledge as well as its diffusion and incorporation into business activities. 9. ´Time to cashµ belongs to which category of measures? Activity 2: Assume that you are the newly appointed manager of a company which has not achieved any significant innovation from the past few years. You are given the responsibility to identify the necessary innovation activities the company needs to perform in order to be successful. Hint: Business investment in innovation strategies. 11.5 Characteristics of Innovative Work Environment In the previous section, we studied different measures and principles of innovative performance. Now, we will discuss the characteristics of innovative work environment. Innovation is essential for organisational long-term success and growth, particularly in dynamic markets. If we take the current economic unrest and increasing global competition into account, an organisation·s innovation ability is regarded not only vital for success, but often a basic requirement for mere survival. The innovative potential of an organisation is confined in the knowledge, skills, and abilities of its employees. The organisational customs and the Ievel of support from leaders and managers play a vital role in enhancing employee potential and motivation to innovate. Creating a work environment that encourages creativity and innovation starts with an understanding of two key characteristics of innovation. We mainly focus on adopting these two main characteristics that contribute to an innovative environment. Let us briefly discuss these two characteristics, the 2 P·s. The 2 P·s: people and physical layout The 2 P·s are not conceptual but simple and very real. They are tangible and not related to terms like ethics, beliefs and attitude. People: The trick is to hire nice people and not the people who have to be told, to be nice. But, sometimes nice people can also fool you. You need to have the right people in the right position in an organisation to encourage innovation. However, this is the major problem for mainly the newly started companies. They tend to hire friends from their MBA colleges or get fooled in the interview process. The key to hiring the right people in your organisation is purely your inner instincts. Resumes never tell the whole story, so you can·t completely rely on resumes alone. References don·t disclose much either, because the former boss is bound to be nice, and many candidates can answer your interview questions in a way that may indicate they are innovative even when they are not.

There are some people who just like to be interviewed. They seem talented on outside, but after few months you·ll find yourself with a sluggish liability. The best strategy is to create the right questionnaire to screen for innovators, analyse every small detail in their resume, and most importantly, go with your gut. Physical layout: Most start-up company managers don·t think strategically about their workplace layout which is a big mistake if you are determined to create an innovative work environment. A poor physical environment has a negative impact on employee attitude and employee behaviour. Even worse, it can also result in bad opinion from potential customers. It doesn·t matter if you·re a coffee shop owner or you run a government office. You need to concentrate on the physical work environment and design it in a manner that gives you the competitive edge you·re searching for. The bottom line is to clean up your office, polish it and make it professional. You·ll also find it easier to attract innovative employees who prefer to work in an environment that is encouraging to creativity and big ideas. Self Assessment Questions 10. Innovation is essential for organisational long-term success and growth, particularly in ________ markets. 11. Creating a work environment that encourages _________ and _________starts with an understanding of two key characteristics of innovation. 12. Technology is essential for organisational long-term success and growth, particularly in dynamic markets. (True/False)? Activity 3: Collect some information about the two characteristics of Innovative Work Environment. Hint: http://www.gaebler.com/Innovative-Work-Environments.htm 11.6 Key Areas of Management Focus for Productive Innovation The previous section familiarised us with the characteristics of innovative work environment. Let us now focus on the key areas of productive innovation management. Product innovation research has developed substantially in the past few years. A significant level of knowledge has been produced on various aspects of the field, so it is of interest to evaluate the state of the ability reached by the scientific community in this field and the route it has taken. Increasing global competition is compelling many manufacturing firms to look for methods to become more innovative. On the other hand, improving the performance of a company in this area is a real challenge. For example, UK companies are often scrutinised for having good ideas but not deploying them successfully to market. Whereas in Germany, high labour costs are reducing competitiveness, and innovation is seen as the solution to counter this. However, a new study has found that entrepreneurs in both countries are facing remarkably similar issues.

Let us have a look at the five key areas of productive innovation management. · Innovation strategy. This includes understanding the function of innovation within a company, deciding how to use technology and driving performance assessments through appropriate performance indicators. · Creativity and ideas management. Showcasing good ideas, which fulfils customer requirements, is crucial. Since innovation includes new products, services and processes, there is a large space for ideas and therefore all employees should be a part of it. · Portfolio management. Once the ideas have been created, an effective process is needed, to choose the best ones for implementation. Major organisations ensure that their innovation group contains a proper balance of new products, systems, and business and service innovations. · Project management. The talent to quickly turn ideas into new products, services and processes is essential. Fast introduction into market, high product value and tolerable development costs are all typical goals for companies. The most common method of achieving these objectives is to use cross-functional teams, but problems often occur. Nevertheless, post-project reviews are hardly ever used to identify areas for improvement. · Human resource management. Considering all efforts of innovation management is the need to develop a culture in which employees are encouraged to contribute to innovation. Self Assessment Questions 13. Increasing global ____________ is compelling many manufacturing firms to look for methods to become more innovative. 14. Once the ideas have been created, an effective process is needed to choose the best ones for _______________. 15. Which key area of production innovation management includes showcasing good ideas, which fulfils customer requirements, is crucial? Activity 4: Assume that you are the manager of a manufacturing company. In order to remain competitive in the ever increasing global competitive market your company has assigned you a task of searching new innovative areas where the company can focus to achieve success. Hint: Project Management. 11.7 Measures for Building High-Performing Innovative Technology-Based Organisations We will now study the measures for building high-performing innovative technology-based organisations. International competition, shorter product lifecycles and increasingly challenging customer satisfaction are creating significant problems for the creation of innovative organisations.

Thus, we can interpret innovation potential as a combination of parameters, internal and external to the organisation, which are correlated to the organisation·s ability to continuously innovate. Innovation capacity is therefore considered as a complex conception because it can be influenced by factors internal and external to the organisation, such as leadership capabilities and the level of industry innovativeness, respectively. As demands for innovation have increased, new measures and drivers have also evolved, such as, government regulations, sustainable development and a focus on speeding up new product development. They are taking leading roles in assisting transformation of knowledge into new products, processes and services. These three factors can have a role in the innovation capability of organisations. Let us briefly describe the external factors that influence innovation. · Government regulation: Government regulation can provide organisations with opportunities or Constraints, depending on the circumstance and how they approach it. Although government regulation is not the only measure that can positively impact on the process of innovation, it is nevertheless an essential one. Regulatory measures can influence innovation ranging from tax to patent and copyright laws. However, the communications between environmental and eCommerce regulation, and organisation and industry innovation in these two areas are examined. · Environmental regulation: An organisation·s sustainable development orientation (SDO) shows the influence of and ability to influence environmental, political and social measures. An organisation·s SDO can be defined as the degree to which the organisation customs and its set of SD practices are capable and effective both in meeting financial, environmental and social needs and in assisting the strategic course of the business, hence providing greater opportunity for longterm greater business success. For example, strict environmental regulations in the developed countries have been decisive in getting organisations to focus on sustainability. · Customers and competitors: Customers and competitors in a specific industry can influence the innovation potential of organisations in that industry. For example, technologically advanced customers may demand more innovative products and services. In addition, geographically close competitors may be able to identify customer requirements and source mechanism more quickly than isolated ones. As a result, customers and competitors may manipulate the innovative potential of organisations. After a brief discussion on the external factors, let us now discuss the internal factors that influence innovation. In general, past studies indicate that an organisation·s characteristics affect some relationships commonly associated with innovation. For example, the positive relationship between R&D and an organisation·s performance is stronger for organisations that provide high quality after-sales customer service than for organisations that do not, and that this relationship is different for growth-stage and developed companies. Therefore, in this section we analyse the literature on the relationship between innovation and the organisational quality of size, strategy, structure, technology management, and business knowledge, amongst others. · Organisational size: The relationship between organisation size and innovation is complicated. The size is positively related to innovation but some measures, such as the type of organisation and the stage of implementation, moderated this relationship. For example, size was more positively associated to innovation in manufacturing than in service, and in benefits, rather than in non-benefits. As per the above discussion, organisation size does not appear to be related in the same way to all dimensions of innovation nor to all environmental management practices. The relationship between company size and the company·s ability to innovate seems to be moderated

by factors such as the measure of size, the scope of innovation, the type of organisation, and the stage of implementation. However it is clear that large and small organisations have different types of chances to innovate, and, hence it is possible to conclude that size does matter to innovation potential. · Strategy: A business strategy addresses the limitation of how the company or its business units can compete with other businesses and industries. In general, research has shown that effective strategic management can help organisations to surpass their competitors. Strategic management is defined as the set of managerial findings and activities that determines the enduring performance of a corporation. Finally, a clear innovative strategy that fits in with the overall organisation·s strategy, and the clear understanding or definition of various factors of innovation should be related to innovation capability. · Communication: Internal and external communications have been found to be associated to innovation. External communication comprises knowledge of the environment outside the organisation, communication with customers and suppliers, and the contribution of employees with external professional activities and networks. Communications can be considered as the capability of innovative organisations. Since effective internal and external communication allows information to be shared by all stakeholders in the innovation process. Self Assessment Questions 16. _______________ can provide organisations with opportunities or Constraints, depending on the circumstance and how they approach it. 17. A ________________ addresses the limitation of how the company or its business units can compete in its businesses and industries. 18. Internal communication comprises knowledge of the environment outside the organisation, communication with customers and suppliers, and the contribution of employees with external professional activities and networks. (True/False)? 11.8 Summary In this unit, we studied about the relationship between innovation and technology. We also learned that technology and innovation are measured as two different entities, but they work in tandem. In this unit, we also discussed how the technology diffusion helps in technological innovation by using the transfer of technology process. After discussing the concepts of innovation and technology, we also understood the relationship between innovation and technology. We also analysed that we can classify the innovation activities as the product or process innovations, which are either related to internet based technologies or not internet based. This unit made us understand the concepts of technology based innovation and management. In this unit, we categorised the technological innovation process into eight stages. We also discussed the factors, principles and measures related to innovative performance. The innovation activity of an organisation is a key driver of competitiveness and economic development. An organisation should consist of an innovative work environment for the long term success and growth of the organisation. We discussed the two main characteristics required to achieve an innovative work environment which are the People and the physical layout. Then, we analysed the key areas and the factors influencing the production innovation and management. In the end, we

discussed the various measures for building high performance innovative technology based organisations. 11.9 Glossary Terms Platitude Articulate Liability Description A thought or remark which is flat, dull, trite, or weak. Expressed using clear and distinct voice. The state of being legally obliged and responsible. It is the dissemination of technical information and knowledge and the subsequent adoption of new technologies and techniques by users.

Technology diffusion

11.10 Terminal Questions 1. Illustrate the relationship between innovation and technology. 2. Explain briefly the management of technology-based innovation. 3. Describe the eight phases of technology-based innovation management. 4. Prepare a list of the factors for innovative performance in an organisation. 5. Briefly explain the principles that guide Innovative performance. 6. What are the two main characteristics of innovative work environment? 7. What are the key areas of productive innovation management? 8. Briefly explain the factors influencing the high performance innovative technology based organisations. 11.11 Answers Self Assessment Questions 1. Technological innovation 2. True 3. Cost-effectiveness 4. Technology marketing 5. Development of Technology

6. Improvement and enhancement phase 7. Innovation 8. National innovation system 9. Project measures 10. Dynamic 11. Creativity and innovation 12. False 13. Competition 14. Implementation 15. Creativity and Ideas management 16. Government regulation 17. Business strategy 18. False Terminal Questions 1. Refer section 11.2.1 Innovation ² Technology Relationship. 2. Refer section 11.2.2 Technology-based innovation management. 3. Refer section 11.3 Process of Technology-Based Innovation. 4. Refer section 11.4 Measures of Innovative Performance. 5. Refer section 11.4 Measures of Innovative Performance. 6. Refer section 11.5 Characteristics of Innovative Work Environment. 7. Refer section 11.6 Key Areas of Management Focus for Productive Innovation. 8. Refer section 11.7 Measures for Building High Performance Innovative Technology based Organisations. 11.12 Case Study Company profile µZenanet networks¶ is a digital communication solutions manufacturer in Brazil which

provides solutions for several markets in the world by developing and incorporating technologies in a convergent and flexible way. Its headquarters is located in the city of Florianopolis, state of Santa Catarina, Brazil. Challenge The company faced a lot of challenges through the benchmarking and action plan proposal phases as well the implementation phase. The Benchmarking phase was used to develop a Brazilian benchmarking methodology for innovation management in small companies. But it affected the company¶s performance and practice indexes since benchmarking companies of different contexts present external variables that sometimes are determinant factors for producing biased values. As a result, a lot of problems were created in the action plan phase and implementation phase. The company desperately needed a system that can help manage all these phases. Solution The company introduced the Innovation Management Assessment System to overcome these management issues. This system helped the firm to understand their strengths and weaknesses as well as to establish action plans in order to achieve higher performance. It facilitated the identification of the causes that were preventing the company to reach higher performance levels and the establishment of actions aiming to eliminate or at least reduce those causes. The results after three years of implementation substantiate the success of the model, when reached a better visualisation and control over project development, improved qualitative and quantitative information processing and specially, a greater number of new developed projects and with market insertion. Questions 1. What were the issues faced by Zenanet networks? Hint: Benchmarking. 2. How did the new system helped them to overcome those issues? Hint: Understand strengths and weaknesses.