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Unit - I

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Outline

Basics of Technology Management

Management of TechnologyTechnology life cycleTechnological EnvironmentTechnological change,

Dynamics of Technological changeScience and Technology in India

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Think! What is technology?The branch of knowledge that deals with the creation and use of technicalmeans and their interrelation with life, society, and the environment,drawing upon such subjects as industrial arts, engineering, appliedscience, and pure science.

1. Technology as Objects:Tools, machines, instruments, weapons, appliances - thephysical devices of technical performance2. Technology as Knowledge:The know-how behind technological innovation3. Technology as Activities:

What people do - their skills, methods, procedures, routines4. Technology as a Process:Begins with a need and ends with a solution5. Technology as a Sociotechnical System:The manufacture and use of objects involving people and other

objects in combination.

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Basics of Technology ManagementLevels of Development

Idea

Generation

Verificationand

Codification

Application ofTechnology

Ideas are developed byindividuals based on their

experience, experimentation orimagination

Verifying the validity of theknowledge; Codifying the

knowledge thus verified andformalizing it for communication

Putting the knowledge touse

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I call my invention The Wheel, but so far Ive been unable to

attract any venture capital.IITC e-Chaupal.wmvCisco_CET.wmv
http://localhost/var/www/apps/conversion/current/tmp/scratch21475/ITC%20e-Chaupal.wmvhttp://localhost/var/www/apps/conversion/current/tmp/scratch21475/Cisco_CET.wmvhttp://localhost/var/www/apps/conversion/current/tmp/scratch21475/Cisco_CET.wmvhttp://localhost/var/www/apps/conversion/current/tmp/scratch21475/ITC%20e-Chaupal.wmvhttp://localhost/var/www/apps/conversion/current/tmp/scratch21475/ITC%20e-Chaupal.wmvhttp://localhost/var/www/apps/conversion/current/tmp/scratch21475/ITC%20e-Chaupal.wmv

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Classification New newly introduced or implemented technology that has an explicit impact

on a firms processes Emerging Not yet fully commercialized but will be so within next five years

New VsEmerging

High Refers to advanced and sophisticated technologies that require highlyeducated people; that is rapidly changing; and requires heavy R&D expenditure

Low Technology that have permeated large sections of society

Medium Between Low and High (e.g., consumer pdts. & automotive industry)

High, Lowand Medium

Indicates a good match between technology utilized and the resources requiredfor its optimal useAppropriateTechnology

Codified Allows people to know how technology works but not necessarilywhy it works in a certain way

Tacit Nonarticulated knowledge that resides within the minds of technologydevelopers

Codified VsTacit

Technology

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Characteristics

When there is an opportunity for improvement dueto either intrinsic or economic reasons, technologydevelopment takes place

Opportunity

Individuals pursue technology development onlywhen there is reasonable assurance that thetechnology will be economically or otherwiserewarding

Appropriability

Technology transfer is not smooth; knowledge issticky because of lack of perfect communicationamong human beings

Transferability

Technology development consumes resources viz.,time, money and people. Collateral assets may beneeded to exploit a technology opportunity

Resources

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Management of Technology

Introduction to MOT

Establishing Firms Identity and Purpose

Key Concepts in MOT

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Introduction

Management of technology focuses on the principles of

strategy and organization involved in technology

choices, guided by the purpose of creating value forinvestors

Emphasis is on accomplishing goals of an organization (value creation)

Focus is on development of technological capabilities and its implementation ordeployment in products or processes

Within corporations technology management is linked to other management activitiessuch as marketing and manufacturing

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Introduction

Value Driven

Technology

Choices

Technology

Strategy

Organization

and

Management

Purpose

HowWhat

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Establishing Firms Identity and Purpose

Dimensions Market Based Resources Based

Drivers of Strategy Customers and

Competitors

Unique Resources

Derivatives Resources Market Opportunities

Strategy Profile Positional Core Competencies

Appropriate contexts Mature Markets Dynamic Markets

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Industries as competitive domain Group of firms that offer similar products/services

to customers

Domains in which incumbent firms compete Classification by key competitive resources

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Capacity Driven Customers Driven KnowledgeDriven

Example Steel Industry Food IndustryPharmaceutical

Industry

CostInvestment

PhysicalResources

Brand / CustomerRelationship

R&D

Competition Based on priceCustomer

SatisfactionInnovation

NatureMature,

Fragmented

Less mature, andfragmented ascompared to

capacity driven

Newdevelopments

are necessary tokeep the firm

going

Pace ofProductivityImprovement

Modest Fast Very Fast

Profitability Low

Higher average

profitability

High profitability

but more risk

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Management of TechnologyKey Concepts

Forms of Technological Change

Process Technology: Pertains to the techniques of producing andmarketing goods and services

Refers to the way an organization conducts its business

Process technology changesare designed to produce and market goodsand services faster, more efficiently, or in greater volume

E.g., Automotive industry (Assembly line changes)

Product Technology: Refers to elements of technology embeddedin the goods and services of a firm

Refers to the output of an organization

Product technology changesadd new features or provide superiorsubstitutes for existing products

E.g., production of gasoline and electric cars (Refinement in cars)

Whether it is process change or a product change depends on the

nature of the firm

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Key Concepts

Forms of Technological Change

Process Technology Changes Product Technology Changes

Changes are less visible in the

marketplace

Changes are easy to detect and copy

by competitors

Process technology makes it possible

for the firm to reduce its cost or cycle

time and improve the quality of itsproducts

Product technology changes bring

about improvements in existing

products

Modifies the way a firm conducts its

business and may bring about

changes in a firms HR practices,

logistics and marketing functions

Helps firms compete for customers

by radically redefine their product /

market scope

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Factory

Car Manufacturing before conveyorization

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Factory

Assembly Line of the Ford T Model, 1913

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Factory

Truck Assembly Line

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Factory

Small Truck Assembly Line

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Product Layout (Assembly Line)

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Factory

Car Assembly Line

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Management of Technology Value Creation and Competitive Advantage

Competitive advantage is the ability of the firm to outperform

rivals on profitability Depends on how a firm is able to provide superior value to its

customers at relatively lower cost

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Key Concepts

Firm as a value chain

Helps the firm deliver products and services to its customers

Provide mechanism by which to capture the cost structure of the

firm

Firms Infrastructure

Human Resource Management

Technological Development

Procurement

Inbound

LogisticsOperations

Outbound

Logistics

Marketing

and SalesService

M

A

R

G

I

N

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Value Chain AnalysisA typical value chain analysis can be performed inthe following steps:

Analysis of own value chain identify theprimary and support activities. Each of these

activity categories needs to be broken up into itsbasic components and costs are allocated toevery single activity component.

Analysis of customers and suppliers value

chains examine how does your product fit intothe value chain of the customer and the supplier.

Key Activities - Identify activities thatdifferentiate the firm and the potential costadvantages in comparison with competitors

.

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Identify potential value added for thecustomer how can our product add

value to the customers value chain (e.g.lower costs or higher performance) where does the customer see suchpotential?

The final step is to identify those activitiesthat provide a differential advantagecompared to competitors.

These are the competencies or the corecompetencies of the organization

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Technological capability of an organization isa measure of its innovativeness. As the level

of innovative capability of a firm goes up, theorganization's capacity to face challengesalso undergoes significant change.

A major component of technologicalcapability is learning from others. The processof diffusion is an important source of

technological capability.

An organization that is a member of a valuechain, where the product or service can bebroken-u into its individual com onents

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In this classification, six levels of technologicalcapabilities are identified. The level of technologicalcapability of the firm increases as is goes down theladder formed by these technology types.

Reverse Engineering: Ability to imitate anexisting product. For example, Sharp Corp.imported a crystal radio set from USA in 1925;reverse engineered it and made Japans first radio,the Sharp Dyne.

Product Innovation: Innovations that lead toimprovements of existing products or developmentof new products. The innovations could beincremental, architectural.

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Process Innovation: Improvementsin the manufacturing process, or integration ofsteps in the manufacturing process leading toreductions in cycle time or reductions in thenumber of process types, improving the

manufacturing process yields, etc.

Application Innovation:Utilisation of anexisting idea or concept for a new application,

or a new design, method or measurementtechnique. It can sometimes dramatically,improve existing products and processes. Forexample, the development of Nylon into

material for use as tyre cords.

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Systems Innovation: Innovationsinvolving integration of sub-subsystemsand several innovations. This may bethrough linking or integration of a variety

and sub-systems, and involving product,process and application innovations.

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The Four Phases of the Technology Life Cycle

The TLC may be seen as composed of four phases:

(a) the research and development (R&D) phase (sometimescalled the "bleeding edge") when incomes from inputsare negative and where the prospects of failure are high.

(b) the ascent phase when out-of-pocket costs have beenrecovered and the technology begins to gather strength bygoing beyond some Point A on the TLC (sometimes calledthe "leading edge")

(c) the maturity phase when gain is high and stable, theregion , going into saturation, marked by M, and

(d) the decline (or decay phase), after a Point D, of reducing

fortunes and utility of the technology.

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NATURAL LIMITS

EFFICIENTCapital Intensive

Max. Rate of TechnologyChange EFFICIENTPERFORMANCE

INEFFICIENTNo Knowledge

New Invention Technology Mature

Initiation Period Improvement Period Technology PeriodRESEARCH EFFORT

TECHNICAL

CHANGE

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Excel Books

Technological change generally follows the course

described by thetechnologylifecyclegraph.

By plotting the market volume over time for anyindustry, one can identify the changing innovativeness

of the industry. This is called technological aging ofthe industry.

When a new industry based on new technology is

begun it marks the inception of the technology.

For example, the inception of the Automobile industrywas 1887 when Gottlieb Daimler manufactured the first

gasoline-powered automobile. This forms the base 6-42

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The Technology Life Cycle (TLC) describes the commercial gain of aproduct through the expense of research and development phase, andthe financial return during its "vital life". Some technologies, such assteel, paper or cement manufacturing, have a long lifespan (with minorvariations in technology incorporated with time) whilst in other cases,

such as electronic or pharmaceutical products, the lifespan may bequite short.

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The life cycle of a technology:

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The first technological phase of the industry is therapid development of the new technology. This phase

is called the TechnologyDevelopment phase.

In the case of the automobile, it phase was from 1887to 1902, as experiments with steam, electric and

gasoline powered vehicles were tried. Productimprovements continued and improved processes forproducing cheaper, better products were innovated.

During this phase weak competitors are eliminated. Forexample, in 1909 there were 69 auto manufacturing firms in

USA. Only half these firms survived by 1916.

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Excel Books

In the ApplicationsLaunch phase a standarddesign is worked out and rapid growth of themarket begins.

Successful firms grow large. Corporate R&Dbecomes important to maintain incrementalmodel improvements.

This phase is followed by the Applications

Growth phase where there is a rapid growthin the penetration of technology into markets.

Competition is on price and segmented6-43

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Production is specialized and efficient.

Economies of scale and marketing dominancereduce competitors, to the final few.

For example, by 1965, only General Motors,Ford, Chrysler, and American Motors hadsurvived in the American automobile industry.

As the innovation rate slows down, the marketpeaks, the MatureTechnology phase begins.

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Excel Books

MARKET

VOLUME

A

A

ProcessesProducts

Technology Application Application Mature TechnologyDevelopment Launch Growth Technology Substitution

TIME

B

B

6-44

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Technological Environment

Introduction

Definition and Importance

Actors in Technological Environment

Changes in Technological Environment Current Developments in TechnologicalEnvironment

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Technological EnvironmentWhat is environment?

A firm operates in an environment consisting of various

other players, viz., competitors, government, other firms

and so on. Technological environment not only shapes, but is also

shaped by other environments facing an organization

Industry/

Competitive

Firm

Task Environment

Macroenvironment (affects all industries)

(Environmental

factors affects all

competitors in the

same industry)

(Specific to a firm

and not necessarily

shared by the

competitors)

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Technological EnvironmentMacroenvironment

Consists of social, economic, political and technological

environment

Social

Firm

Macroenvironment

Technological

EconomicPolitical/Regulatory

Social

Political/

Regulatory

Nation State 1 Nation State 2

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Technological EnvironmentDefinition and Importance A major segment of the environment and the primary

environmental segment that influences the management

of technology

Importance

It brings new products, processes, and materials

It directly impacts every aspect of the society around us, such as

transportation modes, communications, entertainment, health

care, food, agriculture, and industry

It alters the rules of global trade and competition Consists of firms that create new knowledge and firms

that apply new knowledge

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Definition and Importance Steps in technological development

Creation of new knowledge

Basic / Fundamental research without any specificobjectives

E.g., Digital imaging

Application of new knowledge

Investigations intended to solve practical problems

E.g., Biometrics

Knowledgecreation

Knowledgeapplication

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Technological EnvironmentActors in Technological Environment

Developers Facilitators

Public NASA, Federal Labs,

University Labs

AICTE, Governments

Private Tata Institute of

Fundamental Research,

Bell Laboratories

Venture capitalists

Technology evaluators

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Role of afirm

TechnologyDevelopment

Beneficiary oftechnology

change initiatedby others

Facilitatetechnology

development

Victims oftechnology

changes madeby competitors


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Creationof new

knowledge

AppliedResearch

Application of

Knowledge

Development

Engineering

Commercialization

Government

Institutions(e.g., Federal

Labs, NASA)

Scientific

Research

Labs

Universities

Government

Institutions(e.g., NASA)

Corporations

(e.g., GE,

R&D Labs)

Universities

Entrepreneur

s

Corporations

Private Firms

New Venture

DevelopmentGroups

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Technological EnvironmentChanges in the Environment Induced Changes

Changes induced by forces (such as demographics andlifestyle) in macro-environmental segments other thantechnological environment

TechnologicalEnvironment

PoliticalEnvironment

EconomicEnvironment

SocialEnvironment

Government policies

influence technology

development. E.g.,

Telecom

Economic conditions of citizens

influence technology development.

E.g., Tata Nano

Demographic and

Lifestyle influence

technology

development. E.g.,

Railways

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Technological EnvironmentChanges in the Environment

Autonomous Changes

Changes induced in the technological environment due to

independent actions of technology developers in the quest for

competitive advantage. These changes are largely independent

of the forces in other macro-environmental segments

E.g., Intel in Microprocessor Technology; Automobile Manufacturing;

Space-related technology; Consumer products

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Technological EnvironmentCurrent Developments in Technological Environment Resource allocated to technology development

Changing location of manufacturing facilities

Rise of Multinationals

Comparative advantage of nations

Globalization

Shortened product life cycles

Shortened development times

TimeCompression

Combining technologies to develop new products

Combining technologies to commercialize products

TechnologyIntegration

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Science and Technology in India

Emergence of E-Commerce

Advances in Medical Sciences

Lagging Behind

Research and Development activities

Education

Defense systems

unit 1 bit

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