Technological Environment

International Business
 Prepared By
Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com

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 Technological Environment
Technological change can have
impact on the decisions taken by
international business.
Technological change can involve:
– New process of production: new
ways of doing things which rises
productivity of factor inputs, as with
use of robotics in car assembly
techniques which has dramatically
raised output per assembly line
worker. For example around 80% of
technological change has been
process innovation.
– New products: For example, online
banking and many new financial
services are direct result of advances
in micro processor based
technologies.
 Technological Environment
Technological factors
sometimes pose problems.
A firm, which is unable to
cope with the technological
changes, may not survive.
Further, the differing
technological environment
of different markets or
countires may call for
product modifications.
 Technological Environment
For example, many
appliances and instruments
in the U.S.A. are designed
for 110 volts but this needs
to be converted into 240
volts in countries which
have that power system.
 Technological Environment
Technological developments may
increase the demand for some existing
products. For example, voltage
stabilisers help increase the sale of
electrical appliances in markets
characterised by frequent voltage
fluctuations I power supply. However,
the introduction of TV’s, Fridges etc,
with in built voltage stabilizer adversely
affects the demand for voltage
stabilizers.
 Technological Environment
Advances in the technologies of
food processing and
preservation, packaging etc.,
have facilitated product
improvements and introduction
of new products and have
considerably improved the
marketability of products.
 Technology and employment
New technologies can both
create and destroy jobs. For
example, the US Internet
banking company has
introduced ‘smart’
technologies into every
aspect of its operations, so
that its $2.4bn of deposits
are now managed by just 180
people, compared to the
2,000 people required to
manage deposits of this size
in less technologically
advanced banks.
Technology and competitive advantage
Technological change provides
national and international
business with both opportunities
and threats. For example, five
new broadband wavelengths
were auctioned in the UK in early
2000. Access to such wavelengths
has been regarded as vital for the
new generation of wireless
application Protocol (WAP)
products, making possible the
internet, television and other
interactive application on the
third-generation of mobile
phones.
 Transfer of Technology
Technology transfer is the
process by which commercial
technology is disseminated.
Two forms are
– Internalized TT – Refers to
investment associated with TT,
where control resides with the
technology transferor.
– Externalized TT – refers to all
other forms, such as joint
ventures with local control,
licensing, strategic alliances and
internal subcontracting.