Technological

environment
Presented by:
Diksha Gupta (20)
Gina Kaur Reen (22)
Gomini Gupta (23)
 Thenatural and technological environments
present the impulsive potential for development
while the other environments like the economic,
social, and political and government factors
represent the propulsive potential for development.
Impulsive and Propulsive Factors Affecting Business

Given the natural and technological environments, the

propulsive factors determine the extent of exploitation of the
development potential and the direction, pace and pattern of
development.
Natural /Physical environment
 Availabilityof Raw Materials
 Labour Supply
 Transport Facilities – Geographical location
 Climatic Considerations
Innovation
 In the business context, innovation may be defined
as Technical, industrial, and commercial steps
which lead to the marketing of new manufactured
products and to commercial use of new technical
processes and equipment.
Radical innovation
A basic technological innovation that establishes a
new functionality.
 Eg: steam engine
Incremental innovation
A change in an existing technology system that
does not alter functionality but incrementally
improves performance, features, safety or quality
or lowers cost.
 Eg: governor on a steam engine
Next-generation technology
innovation
A change in an existing technology system that
does not alter functionality but dramatically
improves performance, features, safety or quality
or lowers cost and opens up new applications.
 Eg: technology in airplanes.
Product and process innovations
Technological leadership and
followership
 Technological leadership – “a firm seeks to be the
first to introduce technological changes that
support its generic strategy. Leadership can be
established in technologies employed in any value
activity.
 Technological followership refers to a conscious
and active strategy in which a firm chooses not to
be the first on innovations.
Technology and competitive
advantage
 Technological change lowers cost so that the
firm’s technology lead is sustainable
 Technological change makes uniquenesse in
favour of a firm
 First mover advantage
 Improves overall industry structure
Sources of technological dynamics
• Innovative drive of the company
• Customer needs and expectations
• Demand conditions
• Supplier’s offerings
• Competitive dynamics
• Substitutes
• Social forces
• Research organisations/technical facility
• Government policy
Technology transfer
 Technology transfer is the process by which
commercial technology is disseminated. The
transaction may or may not be a legally binding
contract, but it will involve the communication, by
the transferor of the relevant knowledge to the
recipient.
 Levels of TT
• Operational Level: At the bottom level are the simplest ones, needed for
operating a given plant: these involve basic manufacturing skills, as well as some
more demanding troubleshooting, quality control, maintenance and procurement
skills.
• Duplicative Level: At the intermediate level are duplicative skills, which include
the investment capabilities needed to expand capacity and to purchase and
integrate foreign technologies.
• Adaptive Level: At this Technological Self-reliance level, imported technologies
are adapted and improved, and design skills for more complex engineering learned.
• Innovative Level: This level is characterised by innovative skills, based on formal
R&D, that are needed to keep pace with technological frontiers or to generate new
technologies.
Methods of TT
 Training or employment of technical expert
 Contracts for supply of machinery and equipment
 Licensing agreements
 Turnkey projects
Time Lags in technology
adoption and absorption
 Timeand pace of absorption and penetration of
technology may differ significantly between
markets

 Eg – TV and electronic typewriter

Technological Collaboration and
government Policy
 Institutional
Arrangement
 Research and Development by industry
 Incentives
 New technology initiatives
IT revolution and Business
Environment
 Convenience in conducting business worldwide,
facilitating communication across borders which
brings globe closer
 An electronic meeting and trading place adds
efficiency in conducting business.
 Power to consumers as they gain access to
limitless options and price differentials
 Efficiency in distribution
Impact of technology on
globalization
 Economies of scale
 Trade liberalization
 Reduction in transport costs
 Patents encourages internationalization
 Improvements in communication