Management of Technology The Key to Competitiveness and Wealth Creation Second EniTIoN pe oa Qi hav. MI t= Tata McGraw Hill Education Private Limited NEW DELHI McGraw-Hill Offices New Delhi NewYork StLouis San Francisco Auckland a i is Bogota s Kuala Lumpur Lisbon London Madrid Mexico City Mian Manveal San Juan Santiago Singapore Sydney Tokyo Toronto1 Cnarrer Introduction NUCLEAR TECHNOLOGY IN INDIA Nuclear technology is always in debate for both good as well as bad reasons, Technology, which ¢an ‘manifest in its worst form for humanity is none other than nuclear, if in case it is misused during war or destruction, like bombing Japan during World War {| and nuclear accidents, like Fukushima Daiichi in 2011. On the other hand, the peaceful use of this technology has enormous potential in cleaner generation of electricity as compared ta cca! or petrotcum products. Japan, which tras faced worst of nuclear technology, is today meeting its 30% of eneigy needs through nuclear power plants. Can India afford to miss this technology and face the future challenges? | the backdrop of nuclear plant leakage in Japan and Russia, do we néed better safeguards for running these plants? How can we address ists related to public health and safety at these sites? Under the visionary leadership of Homi indian Nuclear Programme was 1944, India passed Atomic on 15 Aprif.1948 and created the Department of ‘Atomic Energy on 03, August 1954. Since then, it has made’ impressive progress-in exploiting this technology for peaceful, purposes. On. May 13, 1974, India conducted a peaceful underground nuclear, experiment at Pokhran, Rajasthan. Also, on 11,and 13 May 1998, five underground nuclear tests were conducted at Pokhran Range, Rajasthan. Following the first nuclear test, there was a long 25 years of sanction in many key areas of technology collaboration between India and the rest of the world. Many believe that it has helped India in“more than one way in making it self-reliant in this critical technology. Dr. Homi Jehangir Bhabha: The Father of Nuclear Technology in tndiaint of Technology INDO-USA NUCLEAR TREATY Despite many roadblocks, both in India and United States, nuclear treaty was signed by then Indian External Affairs Minister of India, Mr. Pranab Mukherjee and then Secretary of State of USA Ms. Condoleezza Rice, on 10 October 2008, Under this agreement, besides many political and socio-economic aspects, India and the US agree to collaborate on technology side along with transfer of nuclear material, non- nuclear material, equipment and components, It is interesting to understand that how this technological cooperation between two major powers of the world would benefit each other. Amongstthe many economic, political and other benefits to U.S. the major opening comes from possible supply of technology and hardware to many upcoming large size nuclear power plants in India. This has a potential to revive | F" te Se raegecat the US industty involved in these technoligics President Bush arid Prime Minister with a conservative economic tie-up over $15- Manmohan Singh after both countries ee * , signed Nuclear Treaty 20 billion. The opening of technology sharing - regime, post this treaty, ‘can give a significant . : boost to US aeroplanes industry, involving Boeing, etc. The relationship has potential to grow and many more business opportunities are now possible in manufacturing sector through transfer of technology and shared technology visions.” is : Through this deal, India has aimed -at technology leapfrogging in. nuclear power generation.’ Even for indigenous technologies,-India will need to- import critical components, material and expertise. India has about 170° GW. of installed electricity generation capacity, The contribution of nuclear energy is meagre 3 per cent, To an estimated peak demand of about 532.GW by year 2032, India needs a total installed capacity of about 778 GW. This goal is impossible without harnessing nuclear power as there is a limit to which we can exploit other energy sources. : In this opening case, we have examined the tole ‘of a‘ critical technology, which requires international cooperation and proper use of technology for peaceful purposes, Later in this chapter, we will discuss more on the classification of technology and importance of technology management at firm and national level.-- lr oMeton 3 References 1. What's next for nuclear power! Fortune (Asia Pacific Edition), No. 5, April 18, 2011 pp. 54-61. ‘ 2, http://www. financialexpress.com/news/Highlights-uf-IndoUS-nuclear-deal/208405/ (accessed on 30 January 2012) 3. http://articles.economictimes.indiatimes.com/2012-01-13/news/30624058_1_nuclear. deal-implementation-ellen-tauscher (accessed on 30 January 2012) TECHNOLOGY AND SOCIETY Theoughout uman history, technology has had a profound effect on human development and on the progress of civilization. It took humans about 2 million years to develop from nomads foraging for food in east central Africa to agricultural settlers capable of augmenting their power with tonis and domestic animals. This significant development ushered in the dawn of civilization. The next several thousand years witnessed the development of the wheel, the chariot, the water wheel, and mechanical implements, It was only less than two centuries ago that the steam engine and the factory system ushered in the start of the Industrial Revolution, Enerey generated from water and from mechanical, electrical, and nucle achieve unprecedented change in their way of life. Yet in no o' been as petvesive in human lives as itis today. To an evér-incr aspect of human endeavour, Government operations, global 207 and individuals are highly dependent on technology for their si progress and society’s dependence on technology only promises ti moved into the twenty-first century. In spite of the fact that technology is the most pervasive force influencing human lives today, itremains mysterious to many people, and its exact definition cludes most of the public and many professionals. {t is therefore, important to start with a clear definition of technology. This will permit a common understanding upon which one can build the arguments expressed in this text. humans to at, ithas invaded every rations, private enterprises, ‘The rate of technological ensify as the world has DEFINITION OF TECHNOLOGY ‘Technology cau be defined as all the knowledge, products, processes, tools, methods, and systems employed in the creation of goods or in providing services. In simple terms, technology is the way we do things. It is the means by which we accomplish objectives. ‘Technology is the practical implementation of knowledge, a means of aiding human endeavour, It is common to think of technology in terms of hardware, such as mack or highly advanced electronic gadgets. However, technology embraces a | machines. There are several technological entities besides hardware, inclu hines, computers, lot more than just ding software and — \ \4 of Techn human skills. Zeleny (1936) highlighted this polut bs. proposing that three interdependent, codetermining, ancl equally importyint components equipment ot unachinery that 6519 Hardware: ‘The physical structure and logical layout of U be used to carry out the requited tasks. Software: The knowledge of how to use the hardware in order to carry out the required t@: inware: The reasons for using the technology in a particular way. In addition to the above three components, a fourth one must be considered independeaily, for it encompasses all levels of technological ach ‘The learned or acquired knowledge of technical skill regarding how to do things z, transfer of knowledge, or hands-on practice. ing formal or informal education or training or field, Know-how can also be acquired through t of this book. Know-why or Br hievements: Know-how: well, Know-how may be a result of experiene People acquire technical know-how by receivi by working closely with an expert in a certain a recognized method of technology transfer, a topic described in a later chapte: Knowledge and Technology ‘Technology is knowledge ement of our stewardship of We currently live in what truly can be termed the knowledge age’ applied to the creation of goods, provision of se and impro’ precious and finite resources; on a negative nate, it can also be applied for destructive purposes. Whatever the application may be, advancement of technology follows expansion of knowledge. Knowledge is not information, but itis basedon the amount of information available. Knowledge ig all that has been perceived or grasped by the mind from the range of information available. Human beings have been able to sort information accumulated throughout their environment into abody of facts, principles, and theories that form a basis for human enlightenment and learning. itis only when knowledge is practically implemented to create new things, operate a system, or provide a service that we enter the realm of technology. ‘The advances in information technology in the second half of the twentieth century have expanded the amount of information available in the world. This has created an explosion of knowledge and brought about further dramatic progress in technology. The invention of the transistor at Beil Laboratories in 1947 and the subsequent development of integrated circuits have driven the development of computers and the information revolution. The capacity for information processing has been continuously increasing. Pritchett (1994) reported that there has been more information produced in the Last 30 years than during the previous 5,000 years and that the information supply available to us doubles every 5 years. Gordon Moore (Isaacson, 1997), a cofounder of Intel corporation, has predicted that microchips will double in power and halve in price every 18 months (Moore's taw). Intel was able to deliver on this prediction, doubling the computing power and the amount of information processed every 18 months or so. Many other companies have been finding many new applications for microchips that were scarcely imaginablea year or two earligr. The advances in microchips and in’computer technology, in general, have led to a new wave of expansion inintroduction 5 * jusines expenstitune ant practice. According to Pritchett, "In 1991, forthe first time, eompanie have spent more money on computing and communications gear than the combined inoneys spent ‘on industrial, mining, farm, and construction equipment a “The'information age of the late twentieth century has created an explosion of knowledge and has had a major impact on the rate of technological change, The accelerated rate of technological a profound impact on society and the standard of living. As we move into the the Industrial Revolution has given way to the ‘technology revolution’, change is having, twenty-first century, echuology and Business An organization can be thought of as a vehicle for introducing one or inultiple technologies to sociely, The goal is to achieve a set of objectives, The technologies used can vary in level, from being very basic, on one end of the scale, to being super-high technologies, on the other end. The organization can be non-profit or for-profit. Both types are considered production organizations, with production being any activity that results in the conversion of resources into goods or services. The resources include natural resources, human resources, and other resources. Business enterprises are formed to make profits. The pool of knowledge available to society is a major source for creating business enterprises. Technology's contribution is not only in how goods and services can be produced but also in what can be or even has the potential to be produced. Technology converts the real of possibilities into realities The technologies that exist in a business are the technologic’l assets of that business. These assets may, therefore, include hardware, software, brainwarc, and know-how. They constitute the collective knowledge and technical capabilities of the oxginization, inchuding its people, equipment, and systems. : in the past, the value of a company was assessed largely on the basis of its capital and physical assets such as land, buildings, equipment, and inventory. Today, the real value of a company is much more than the value of its physical assets or its simple accounting nel worth. Technology adds value to the assets of a company. The technology resides in the company’s people and its technological systems. ; There are many companies like those of Google, Facebook, Infosys, ec., which are heavily involved in developing Internet-based applications and softwate-solutions, For example, Google, which was founded by Larry Page and Sergey Brin in Jannary 1996, specializes in Intemet search, cloud computing, and advertising technologies. The main source of revenue is through Advertisi: ig in a number of Intemet-based services and products. Similarly, Facebook started operations in 2004 to provide social networking services. By Janniary 2012, it has over 800 million active users, Another Indian company Infosys deals in I business consulting, technology, engineering and outsourcing services. It has a clicnt-base in over 30 counties, For such type of companies, the net value of company resides in its technology and people. Ther physical assots ate relatively insignificant, yet the real value of these companies due to maturity in technological growth is huge. The typical danger wih such a company isto maintain the technological edge over competitors and remain financially successful. However, chances of sustainine on the skill of its management team in managing the technology-based business success dependWHAT WENT WRONG WITH KODAK IN 2O2e idak Co, which is over 130 years gld and one of the best-kno recent times, has filed for banicipicy prote i" is better known for its technological innovations in hand- held ‘aiid holds dver 1,100 digital patents. towns many patents in printing imaging, etc, which are used in a majority of modern digital cam ‘as, Tablet PCS. It got entangled in litigations with rivals like Apple hi ARM) oe fame, Corp of Taiwan, Samsung stty witnessed many” yer- jn American Kodak gence of techiology i in digital 9 ‘expeliencé, right. from cater to technologies there Weré many #2 see print Sony sin” consutner @ and ‘Nokian ‘inultipurpose mobile esting ta ‘nate that Kodak invented and developed the first one, weighing aboul save photograph way-t back, in..197 5:5 “3 ily. Went Wrong with iodakt It seéins that Kodak lost:many years watching ike Canon, Casio, and: Nikon grow. aid “capture marketshare in this area. AoE is ene CEO. Daniel. Com, ivtriedito undertake a designing scope “connections, to combine. h feterogercaus resources, In: Com| tition winning strategy for 21" century, Ed. Yani S, et al,, Edward Elgar, UK, ee2. hitpy/eww.bbe.co. uk/news/business- 16625725 (accessed on 21 January 2012), 3. httpyymww-dnaindia.com/money/report, kodakefiles-for-bankeuptcy-secures.950. mnillion-lifeline_1639566 (accessed on 21 January 2012). - noe arenes erent, ea al, (1996), the intellect of contemporary organizations operates at four According to Quinn ct oe 1g importance: levels. These levels are presented below in order of increas 1. Cognitive knowledge, or know-what: This is the basic mastery of the discipline. It is essential but insulicient for commercial success. 2 Advanced skill, or know-how: This is the translation of book learning into effective’ execution. 3, System understanding, or kow-why: This is knowledge of the cause-and-effect relationship underlying a discipline. 4, Selfmotivated creativity, or care-why: This is the will, motivation, and adaptability needed for success, Creative and motivated groups outperform groups with greater financial or physical resources. “Technology can be classified in several ways. The follorving classification’ are important in establishing a common vocabulary for the enst ion in this book. New Technology A new technology is any newly introduced or implemented technology that has an explicit impact on the way a company produces products or provides services. One example is new computer software introduced to devetop engineering drawings and thus replace manual drafting. Another example is an internet website designed to market the company’s products. The technology does not have to be new to the world, only to the company. It couldhave been developed years ago and used by others, but it is classified as new whenever introduced for the first time in a new situation, New technology has a profound effect on improving productivity and maintaining a competitive business enterprise. Emerging Technology An emerging technelogy is any technology that is not yet fully commercialized but will become so within about five years, It may be currently in limited use but is expected to-evolve significantly. Examples of emerging technology include genetic engineering, nanotechnology, superconductivity, and the Internet as a replacement for the personal computer, Emerging technologies create new industries and may make existing ones obsolete. They have the potential of triggering large changes in institutions and in society itself. Sustainable Technology Any technology that helps development to meet the needs of the present without compromising the ability of future generations to meet their own needs can be treated as sustainable technology. This is also used to describe a class of electronic devices that can promote sustainable management of natural resources such as land, a ener, sources, ec, There are other terms also that have similar connotation, ariel technology (also called as envirotech) or green technology (also ca technology (also called as cleantech), : forexample, environmental also called as greentech) ot clean or low carbon technology (also called as lowcarbontech), | | |B Yanagement of techwutog needed to harness renewable sourees,or emery stella tidal-power, and geothermal energy, blunass, bydroelectricity, ete, fall under thus e* of human survival and well-being of coming generations heavily depend on how technologies are managed by present generation High Technology The tet chology (high-tech) refers to advanced or sophist technologies. High technologies are utilized by a wide varity of industries having certain charactetistics, A company is classified as high-tech if it fits the following description (Larsen and Rogers, 1988; Mohiman and Von Ginlow, 1990): + Ihemploys highly educated people, A large number of the employees are scientists ard engineers, 2 Its technology is changing at a faster rete than that of other industries. + It competes with technological innovation. + It has high levels of research-and-development expenditure. (A general guide is that the ratio of R&D expenditures to sales is { to 10 or twice the average for the industry). + Ithas the potential to use technology for rapid growth, and its survival is threatened by the emergence of competing technology. Some high-tech companies may be working with technologies thatare ‘pushing the enveloy nologies may be referred to as ‘super-high technologies’ Low Technology The term low technology reters to technologies that have permeated large segments of human society. Low technologies are utilized by a wide variety of industries having the following characteristics: + They employ people with relatively low levels of education or skill, + They use manual or semi-automatic operations. . They have low levels of research expenditure (below industry average). ‘The technology base used is stable with little change. + The products produced are mostly of the type that satisfies basic human needs such as food, shelter, clothing, and basic human services. Medium Technology As used in this text, the term medium technology comprises a wide set of technologies that fall between high and low technologies. It usually refers to mature technologies that are more amenable than others to technology transfer. Examples of industries in this category are consumer products and the automotive industry. Appropriate Technology The term appropriate technology is wsed to indicate a good match between the technology utilized and the resources required for its optimal use. The technole could be of any level—low, medium, or high, It does not make sense, for example, to use high technology when theres a lack of necessary inffastructure or skilled personnel, This is adilemma faced by many developing countries that want to transfer technology used in more industrialized countries. They may push for the acquisition of high technology in cases where a medium-fevel technology would be more effective. Utilizing the appropriate level of technology results in better use of labour resources and better production elliciency,‘ Technology can be preserved and ef Technology Veclnology can b ved and inucoded form, An engineering drawing isa coded for, . dita a produc. A conputer program of sy opin and transmits knowledge about that agvithne Codified versus T antongusers if it is expres tan ape, dimension, and tolerance shape, sion, algorithm is a codified form that preserves ion is non-articulated knowledge. There is no uniformity in the way itis is nora pope. tis usualy based on experiences and therefore, emai oe jade otsdoveapes Te technology develop are the ones who have the ka within the minds of t knowledge is transmuitted by demonstration or observation, followed by how in question, Taci who seek the knowledge. Transfer of tacit technology occurs by a assimilation by ae between the source and the host. Apprenticeship programmes may sere as ; Presente Tacit Technolo, orexpressed to i 7 i, allows people to know how technology works but not Coed Te ee an em ei tb aad ue - ers and shaped by their experiences during the development process. Transfer ai es en fs easier when the technology is in a codified form. It is harder, less Precise, and Se to transfer tacit technology. A complete mastery of | the technology requires an understanding of both the explicit codified knowledge and the non-explicit tacit knowledge, DEFINITION OF MANAGEMENT Management is an art and to some extent a technology. Itis the art of carrying on business It involves directing and controlling an organization and steering it toward achieving its Objectives. it draws on knowledge, experience, and an understanding of human and organizational behaviour, The tenm ‘directing’ means providing a direction and establishing the path that an organization follows to full its mission. Directing implies a one-way flow of information, usually top-down, It is therefore, important to highlight the word ‘controlling’ in the definition of management. Control implies a feedback from the system to the control agent to rectify actions and keep the system on the right track, Management control of corporations is esscaiial to keep the organization on course and prevent problems. Management is not and should not be an open- loop endeavour; it is a closed-loop system, It involves planning and coordination basis, and ideally it should permit the flow of information in more than one dire bottom up, and across the organizational structure, Management is also a technology, as it is the means by which the desired goals of an enterprise are achieved. Management functions in an organization include planning, organizing, staffing, motivating, and controlling activities of the organization, Management, as a field, has a knowledge base and guiding principles, Frederick Taylor, the ‘father of scientific management and industrial enginecring,’ applied the scientific method to the art of management, After Taylor, many, management gurus contributed their valuable knowledge to create ‘management technology’. The term management ‘echnology implies technology used to manage organizations OF certain functions. It should not be confused with the management of technology, which is defined below. ‘ction-top down, on a continuous *ment of Technology (MOT) is an interdisciplinary field that integrates science engineering, and management knowledge NATURAL and practice (Figue 1.1). The focus is on SCIENCE technology as the primary factor in wealth creation, Wealth creation involves more than just money; it may cncomp: tors such as enhancement of knowledge, intellectual capital, effective exploitation of resources, preservation of the natural environment, and. other factors that may contribute to raising the standard of living and quality of life. Managing technology implies managing the systems that enable the creation, acquisition and exploitation of technology. It involves assuming responsibility for creating, Fig. 1.1 The Interdisciplinary Nature of MOT acquiring, and spinning out technology to aid human endeavours and satisfy customers’ needs. Research, inventions, and development are essential components in technology creation and the enhancement of technological progress. However, more important for the creation of wealth is the exploitation or comimerci: n of technology. It is only when technology is connected with a customer that its benefits are realized (Figure 1.2). Technology must connect with customer needs to satisfy those needs and achieve -(NDUSTRIAL PRACTICE, BUSINESS, THEORY Technology Conversion ethnology ‘Creation or Acquisition Stundard of Civing, Social vironmental Issues Fig. 1.2 Spinning Out Technology Technology must connect with customer needs to satisly those needs and achieve societal goals. Technology is the engine of economic growth,duction 44 of economic growth, A customer is a by y is the engine eee ee ion, or a government entily such as a defence est elf is not contributing to wealth. An idea that emerges tn does not bring monetary returns. Technology Beneraieg achieve a desired strategic or operational obje, Ciary ang sjetal goals, Technolog’ societal go tn could be an individual, @ corn An invention made and put on & ° i is not exploited, even if it was patented i ; alth when it is commercialized or used to wei : for an organization. While the underlying factor in a ase eee F apita ation a 13). ee ae in economic growth. Social, political, and environmental growl ie facilitate or hinder the wealth-creating process. MOT treats technology as the Sean -alth-creation system. With proper nourishment and a good environment, a seed seed a pee healthy tree, Other factors contributing to wealth creation—including capita, ie natural resources, public policy, and so on—provide the fertile land, environment, and nourishment needed for growth. Each one of these factors has its own disciplinary field oft dy and research, MOT, 28 an inteiseplinary fed, combines Knowledge from these disciplines, & comprchensive MOT degree programme requires in-depth studies of all these factors. remise for the MOT field is that technology is the most influentiay P there are other factors that contribute to the system (Figure d investment make significant conteibutions to economic ‘Technology on J Wealth Creation Natural Capital jal Public and Environment Policy Fig. 1.3 Factors Contributing to Wealth Creation MOT has national, organizational, and individual dimensions, At the national/government level (macro level), it contributes to shaping public policy, At the firm level (micro level), it contributes to the creation and sustainability of competitive enterprises. At the individual level, | it contributes to the enhancement of one’s worth in society.oe MOT atthe Firm Level U.S. National Research Council report (1987) on manayement of technology defi an interdisciplinary field concerned with the planuing, development and implementation technological capabilities to shape and accomplish the operational and strategic objectives of an organization,” MOT is an interdisciplinary field because it involves combined knowledge from science, engineering, and business administration fields. It impacts different functional entities of the corporation: research and development, design, production, marketing, finance, personacl, and information, Its domain involves both the operational and the strategic interests of organizations ‘The operational aspect deals with the day-t6-day activities of the organization, while the strategic dimension focuses on the long-term issues. The organization must take into account both dimensions. Studies have shown that engineers and managers of many U.S, corporations tend to concentrate their efforts on the operational aspect, focusing on short-term results and giving less attention to strategic outlook (Berman and Khalil, 1992; Heim and Compton, 1992). Developing nations like India and China are no way different. This short-term horizon of management underestimates the consequences of today’s actions on the future heaith of the enterprise, MOT addresses tI potential weak spots in management systems by putting emphasis on the strategic objective: of any organization. It guides management in its efforts to improve preductivity, i effectiveness, and strengthen the competitive position of the enterpris In the 1970s and 1980s, U.S. industries started to lose their comp Japanese products but also to products produced in a slew of other Asian and European countries. The decline in competitive position prompted many organizations to express their concern and examine various approaches that might help U.S. industries restore their competitiveness. Organizations involved in this endeavour were the National Research Council (NRC), the National Academy of Engineering, the National Science Foundation (NSF), many industrial organizations, and educational institutions. Their efforts brought atiention to the importance of MOT in restoring the United States to its position of economic leadership in the world. The NRC report (1987) proposed bridging the knowledge and practice gap between engineering and science on one side and business and management on the other, It was the link between technology creation and business exploitation that was perceived as inefficient in many private and government-owned organizations. The effective combination of technology and business, and bringing technology to the marketplace in the form of products and services, creates wealth. ‘The link between the technology side and the business side of the house seemed to be missing from paradigms of industrial practice, government policies, and educational institutions. It was realized that the existing educational programmes in engineering and business schools, combined with rigid institutions’ structure, may have become outmoded and deserved a serious review. It was also realized that first-rate educational programmes are needed to develop the engineers and managers that can manage technological change and expand global markets, New ways of thinking about these programmes and tie ‘content of curricula were indicated, ‘The emergence of new specialized programmes in management of technology was one of the outcomes of this, ive advantage, mainly to self-examination exercise.“28m yy ERISED WORLD WITH TECHNOLOC IE, INNOVATIONS VICAL softs best known innovators and possibly the greatest visionary of recent gj Steve Jobs on October 5, 2011 when he was just $6 years old. He was born on Februar a. 1955 at San Francisco, Califomia. He co-founded Apple Inc, which is best known for it if - changing products like Apple Il, iPhone, Pad iPod and many more. : life In 1977, along with Steve Wozniak, he worked on a bredkthrough compater-the Apple I, which became the world’s first widely used PC. Just at the right time, they convinced Mike Markkula, a former Intel executive to invest $250,000 in their business and soon history followed them. Apple I revolutionized computer world with state-of- art colour ‘graphics and so fe supports, like VisiCalc, which was the first spreadsheet program in computational arena. Company growth led to Jobs fortune, which was over $200 million in December 1980, when he was just 25 years old ‘Around that tine, IBM was very aggressive in the j same aréa and competition was meant for survival. Steve Job focus was more on a new project Lisa, ‘wheré he was betling on Graphical User Interface (GUD) to replace the ‘comménd-line {nterfac a Lisa, itis still known for ils onscreen icons; which got activated atthe elick of a miGuse, Jobs had fo quit Apple in 1985, after which he started Next Inc. in 1986. He acquired an animation company Pixar from ‘Star Wars” foi $10 :nillion. As destiny had stil! many things in store for Steve, Next was aéquired by Apple in 1986. This event later helped Steve to become CEO of Apple by. 2000, In the mean time, 1998 saw Apple launching its all-in-one iMac’ computer Year 2001 brought niany irinovative technological trends for Apple iwhen it ‘lauiched a new path-breaking Unix-based OS X. In quick suécestions, Apple released iPod, computers with OS X, ‘aid {Tunes softivare. By 2005, its Nano iPod was a hit at the maiket with excellent MP3 and video playing features. ‘This product had elegant design features that were interfaced with excellent user interface, a click wheel, and ability to seamlessly syne ivith ‘Tune : By 2007, Steve launched iPhone, which hold the credit of first Smartphone without a keyboard. On this product, Relpli De La Vega, President and CEG of AT&T Mobility said in an interview, “I was blowh away by what Steve had put into that device. He'd found a wht gue the Mac OS X oan tein nto el dee ‘That's when the light Rul vt Ee was going to change the industry forever.” In'2010, market Se rad 7” lc’ Yet nae innovative product iPad, a modern touch-screen tablet sore re - ig end of his | falling health, Steve Job brought the iCloud and iOS 5 in June ly Grove, former Chairman and CEO of Intel, who ki i it i $ comments, “As Jobs 2 (referring his time alt ee eae ter he retumed back to Apple in 1997), he became "an idea, which was’ earlier developed at Xerox PARC. Despite market failure forthe tumaronnd artist of decade, Thete 1% no other company in tectinotusry that’s 2! a song core business and developed another yery sttong one Che rest of good, {if we're] right once” ny ups and down, iiany achievements on'business front but many disappoititinents at personal Life including a long drawn battle with cancer, which prematufely curtailed his iconie growth, He was neither: computer scientist nora trained industrial deslentt At best he had a stint ofjust one, at Reed College and a short stay ion and. technical ae a person ‘who. makes the t trend, father than fallow: the trend and last but not the least, he oe “understand what ‘noted. ‘Tsubseribe & toa ny from people don't kad havd ig crazy ideas, And I’ve paid close attention to whispers. around me.” Listening to customers’ whispers fi ihe future need i isan ait, butif one masters in conveting these user friendly with significantly diffe rent, user inter faces. echnolagy should help | de lop product more functional, eflicient (faster devices), and aesthetic, One te chnology should have the capability | to support another one, For example, iPad was successful with the music capability of ‘Tune and related interfaces, Similarly, Apple-IL became the trendsetter for its features like user ‘interface and mouse.‘mon W.L, 2005. iCon Steve obs, Sobyn Wiley & Sor Fusiness-16625723 (ace see! on 21 Jan anéy/repart, kadak-files-for-bankrupicy- 12). MOT at the National/Government Level From a macro-level perspective, a more general definition may be appropriate for MOT. It can be defined as a field of Inowledge concerned with the setting and implementation of policies to deal with technological development and utilization, and the impact of technology on society, organizations, individuals and nature. It aims to stimulate innovation, create economic growth, and to foster responsible use of technology for the benefit of humankind (Khalil, 1993) At the national level, more focus is placed on the role of public policy as it applies to the advancement of science and technology. The overall impact of technology on society is explored, particularly its role in developing sustainable economic growth. The opening case of this chapter on nuclear technology in India illustrates this point. The effect of technological change on people, the type of education and training they need, and effects on health and safety as well as on the environment are considered. Goyernment and organizational policies are developed to embrace technological change for the benefit of their constituencies. _THE CONCEPTUAL FRAMEWORK FOR MOT Figure 1.4 shows the basic concept of MOT as an interdisciptinary field of study and application. It illustrates how MOT creates a linkage among science, engineering, and management disciplines. From an academic point of view, this conceptual figure indicates that traditional fields in science and engineering contribute to scientific discovery and technology creation. There are also traditional fields inv business administration that contribute to the management of enterprises, economics, finance, marketing, and public policy,16 sonagew of Teciealag Business \ Administration Moi ni Disciplines knowledge Science Disciplines Material Techratcgy Product Technology Production(Pracess technology Information Technology Environmental Technology Oiscipline-based Sirategiil.ong-Term Issues Relating Technology Knowledge Science and Technology Policy /hocounting Process of Technological Innavalions Finance R&D Management ‘Management R&D Infrastructure and Technological Marketing Change Economics ‘Technological Entrepreneurship and New Business Law Ventures ProductProcess Life Cycle Technological Forecasting and Planning Technological innovations and Strategic Planning Technological Transfer International Technology Transfer and the Rade of Multinational Corporations Technological Risk Analysis nd Assessment Technology and Economic Analysis Technology and Human, Social and Cultural Issues Training and Education Issues in MOT MOT in Manufacturing Industies Information Technology and Other Emerging Technologies Manufacturing Marketing and Alter Market Interface Technological Change and Organizational Structure Management of Technical Projects Financing Technology dnd Financial Dedision-Making Quality and Productivity Issues Methodologies i MOT Eco-efficiency and Environmental Suitainabilly Fig. 1.4 Core Knowledge Needed for MOTyy y connects disciplines that focus on technology creation why ‘sion to wealth The field examines how technology is created: how business opportunities; how to integrate technology strategy with ci strategy; how to use technology to gain aaa as technology can im flexibility of manufacturing and service systems; ow to a cl " ee that technological change; and when to enter and a to abandon tee hnol ogy. A series of meetings sponsored by the National Research Council, the National 5 Foundation, the University of Miami (Khalil and Bayraktar, 1988), the Oak Ridge Associated Universitics, and several professional organizations in the United States addressed these issues, Based on discussions at those meetings, a set of topics emerged that were of specific concer in MOT (Khalil, 1991). They are listed under the MOT circle in Figure 14. : Science and technology policies have a major impact on a nation’s competitiveness; therefore, the process of technological innovation must be well understood. Infrastructure and management of R&D is a key aspect, and entrepreneurship is vital for the development of new technologies, The technology life cycle as well as product and process life cycles are becoming much shorter, technological forecasting is assuming a much greater importance in planning for technology. Other pertinent subjects include technology transfer; the role of multinational corporations, the risks associated with technology; economic analysis; human, social, and cultural issues: aspects; productivity and quality; organizational structure; of technological projects; the booin in information technology; the marketing of technologies; financial issues related to technological development; and environmental sustainability and eco- efficiency. : : All these topics are interwoven to form the fabric of the MOT field. The issues covered have implications for engineers and managers. Engineers deal with the physical components of techndlogy. They need to relate that technology to markets and economic systems. Managers must anticipate implications of technology on business. It is imperative for all concemed to understand the basic concept of connecting technology with the marketplace to create wealth. Management of technolog} that enable its c be exploited to create business DIOVE the embrace clence WHY MANAGEMENT OF TECHNOLOGY NOW? ‘The world is changing. As'‘we move into the twenty-first century, the pace of change continues to increase. New technologies emerge and the dynamics of trade shifts. Management systems must also shift to cope with the change. These shifts create a totally new paradigm for business. Let’s examine the nature of this change since the end of World War II. The World: Post World War I World War I created a new order in the world. The industrialized countries dominated the scene. They had the major share of the world’s productive capacity. Technology-based products were sold at home and all over the planet, creating great wealth for countries such as the United States, Britain, and France. Many industries flourished and companies such as Ford, General Motors,9 Sais Cuaerer The Role of Technology in the Creation of Wealth. ~arly 1990s, this sector. started coming out from “The major ositive changes started. Fig. 24 Growth of indian Telecom Sector (Source: COAI)1 capital investonent <.. Silicon Valley jg fous much larger than n ‘ln in The Boston Globe, 1997) rechudingical chang’ | talking about. (quoted i the sort of thing Lam at technical progress accounted for more than half th between 1909 and 1949. His work indicates tha nomic growth in the long run, rat al results show th United States I be the motor for econ ive contributions of three sources of economi for the United States, France, West Gemany, Solow's emp economic growth in the technological development Ww! Boskin and Lau (1992) growth Japan, and the Un timated the relat ited Kingdom. They showed over the period under study, technical progress is by far the most important source of economic growth, accounting for half or more (three quarters Jor the European countries), and capital is the second most important source of economic growth (except for the US). Capital and technical progress accounted for more than 95 per cent of ‘he economic growth of France, West Germany, Japan, and the United Kingdom. In the US. where labour grew more rapidly than in other countries during this period, they h. (Boskin and Lau, 1992). still account for 70 per cent of economic grow! ‘The U.S. National Science and Technology Council, in its report ‘Technology in the National that technology is the engine of economic growth, It reported that. he agent through which economic growth occus—iy logy proved to enhance manufacturing Interest” (1996) emphasized “performance of individual companies—tl strongly linked to their use of technology.’ The use of tes in every performance category. THE LONG-WAVE CYCLE There is no doubt thatémiprovementinproductivityis vitally important to an economic system. It provides relief from inflationary pressures and permits real improvement in the standard ofliving. Technology is the driver for such improvement. Technology also triggers another mechanism for economic growth that is yet to be fully appreciated, one whost effect has not been quantitatively measured, Through this mechanisrn, €ieringiaind ile wileclnOloRyIsplrsteconOMicTexpansion) In traditional economic literature, it is known as the @6H@S0aVe or (GABUCOMOMIEIVEIA After the Industrial Revolution, economies of Western countries went through major economic expansion followed by a depression. In 1930, the Soviet economist Kondratieff observed that fluctuations occurred in Western economies every 30 years and attributed them to the long-wave effect. Mensch (1979) studied this phenomenon and suggested that(SESiGMEWAeChnOlOByibe gan in each long wave. Graham and Senge (1980) concurred with the view that Betz4(1987) suggested that the GOCESSVCHINUNANOHEANAVE is an dntermetion between GAP "technology, business opportunities the new technology creates, and an eventual overbuilding of32 ct of Fach ALTA {Le sueyested the follow wave proce: its for the long ny sequence of 2 L. Discoveries iy science create a phenomenal base for technological innovation, 2. Radical and basic technological innovation creates new products. - These products create new markets and new industries. the new industries continue to innovate in products and proces - As the technology matures, many competitors enter internationally, eventually creating eXCess production capacity. Excess capacity decreases profitability and increases business failures andl unemployment. 7. Subsequent economic turmoil in financial markets may lead to depressions. 8. New science and new technology may provide the basis for new economic expansion, (GION PTVASIVE DASERAHOWAHGN) Lon term economic expansion, and excess capital formation in technology-mature industries: “It does not determine anything in the future.” He made the following pertinent observations: es, expanding markets. @ Cutting-edge technology is behind the long waves of etonoinié activity, @ High-technology products displace old technology when there is a justification for performance over cost. @ Technology life cycles of industries affect long cycles in the national economy. New technology comes froia s A new tecfinology, when created, will begin a new wave, In an age characterized by fast-paced technological change, the long wave, as argued in this book, is likely to be much shorter. Many industies are increasingly getting involved in high ‘technology. Scientific discovery and knowledge are at an all-time high. Emerging technologies are promising new and uncharted areas for products and production, All indications support the view that technology will have greater inpact on economic growth in the future, Writing about the digital age, Isaacson (1997) stated: ience, and science comes from new discoveries in nature, The oulputs of the old economy were simpler to measure: steel, cars, and widgets are easily totted up, But the new economy defies compartmentalized measurement, Corporate software purchases, for instance, are not counted as economic investment, What isthe value of cellular phones that keep getting cheaper, or e-mail? By traditional measures banking is contracting, yet there has been explosive growth in automated banking and credit card transactions; the same for the way health care is delivered. Isaacson also indicated that traditional statistics are increasingly likely to understate Productivity and grovth, It is likely that economic growth incidental to technological change will continue to be the leading factor in wealth creation,ee Short Messaging Ser ways. For example, vanished in recent ye to the handset of intend! + change aur lifestyle. : et oe : I ‘ id-80s, Mr. Friedhelm Hillebrand, the chairman of the non-voice services in mid-B0s, Mr. ‘ “tec cations (GSM) body, led eats Slobal System for Mobile-communications Y, ed a team commitee ofthe Global Syst be made mandatory fo cellular service provider i s tsuppe eee aaa They recommended for an upper cap of 160 characters, See that people generally used less than Why? Possibly, it was ie bs ead eh ese in telex. For techni characters in post-card based messaging he length of the messages, whi al limit of 128 bytes was appropriate for the lenglh o Bes; which later ereial (0 bytes, translating into 160 seven-bit characters so that the messages iro tO iO oes a enalling formats. Agar (2008) states that "(tex!) message could fit into the existing signalling S indeed the aon 'BINg was an accident, No one expected it...The power of text ~ indeed the power of the phone - was discovered by users.” ‘ hile §AAS evolved as one of the most powerful Value-Added Services (VAS) of mobile business, there was another compelling reason due to whick Sms was technically conceived. There used to be unused resources in the telecom transmission system during time periods when no signalling traffic. existed, This could have been used te transport massages. at minimal cost, leading to an evolution of optimized VAS called SMS, So, originally, it was. meant for using excess capacity of secondary set of r annals, like the signalling channels, instead of the voice channels to achieve economy in SMS transmission. [2] 4 Trosby (2004) notes that "the major part of the GSM community expected: the circuit switched data and fax services to be’ the most impoitant non-voice services; and regarded SMS to be tore like an add-on that might increase the aitraction of the GSM system without any commercial significance.” SMS was in fact designed to be'a paging service, and not primarily ‘intended to-be a person-to-person (P2P) service. According to Hillebrand (2010), the first: description of SMS as.a new ‘teleservice’ in a standard document stated that ‘advantage has been taken of the radio aspects of the system in utilizing it to provide a short message point to point or multipoint teleservice without call set up, which is not available on fixed networks,’ From these uncertain beginnings, SMS caught on’and grew to become one of the most successful services ever, in terms of usage levels. According to an estimate by ITU, total ‘umber of SMS sent globally in 2010 is approximately 6.1 trillion translating into about 2,00,000 text messages per second. To get a rough idea about the revenue flowing in the SMS value chain, it translated into about USD 14,000 every second. [8] In India, according to a report by ASSOCHAM (2011), voice and SMS will continue to be the main mobile phone services. The Teport states that the Bihar Government is using SMS to monitor project performance. [7,8] HAS SMS CHANGED OUR LIFE! ice (SMS) through a mobile phone has changed our life vice (o , postal department load on § ars, SMS is hass! led user-one or many. : in many vices like telegrarns has alpen Jes-free, cost-effective and deliver ‘Technology, like these inimediateh has power tg3} Veragement Case Questions {How do you see growth of SMS in your county”? 2. Is Voice SMS an inn and multiple language 5 3. White SMS and MMS mnobile a ive ser vive launched ty overcome the bairiens OF low Mercy ipts? Hyes, why is not picking up fast? pascal on similar technology, MMS never picked up in the analysis to analy; have some recommendation: Conrpate Twitter services with SMS. Can they be ti services? Explain, ¢ the (i) voice-based SMS services, and (ii) MMS. Do you their service providers ated as competing technology-bi References 1. Agar, J. (2003), Constant Touch: A Global History of the Mobile Phone, London: Icon Books, 2, Ashish Kumar, (2011), A select study of use-ciffusion of SMS & MMS; Unpub! thesis, If Delhi 1 PhD 3, Hillebrand, F. (2010), ‘Communication Networks in the Early 1980s and the Portfolio of GSM Scivices’. In Hillebrand, F (Ed), Trosby F., Holley, X. and Harris 1., Short Message Service: the Creation of Personal Global Text Messaging, Chicester (UK): Wiley, 2010, 12, 4. Los Angeles Times, dated 3 May 2009, http://atimesblogs.latimes.com/technology/ 2009/05/invented-text-messaging html, last accessed 23 November 2010 5. Strategy Analytics (2008), Global Mobile Messaging Forecasts (2001-2012), Analyst Report. : pave . Trosby, F. (2004), "SMS, the Strarige Duckling of GSM’, Telektronikk, 3, 187-194. ~ Available at hitp/www. lenor.camhelektronikk/volumes/pdf/3,2004/Page 187-1 94. pdf (last accessed 23 November 2010), - 7. ASSOCHAM (2011), Mobile Value Added Services (MVAS) - A Vehicle to Usher in Inclusive Growth and Bridge the Digital Divide, available atthe website of TRAI (Acessed 23 January 2012): (hitpyhvww.trai.gov.in/WriteReadData/trai/upload/StudyPapers/17/ ASSOCHAMMVAS_ STUDY. %20papertinal.pdf) 8. ITU. Report (2010) World in’ 2010: (http://www. itu.in/ITU-D/ict/material/ FactsFigures2010.pd). 2 THE EVOLUTION OF PRODUCTION TECHNOLOGY In the first millennium of the Christian calendar before the A\ge of Enlighteament, there were very few prevalent technologies. Society was predominantly agricultural, Products were developed by artisans, and manual labour dominated. The Industrial Revolution and the introduction of steam power late in the second millennium changed everything, ‘The concept of the Factory was bom: Workers now assembled in one place to develop produc ually in small shops. is rather than workingerick Taylor introdyced the seientifi ite 1800s, teonlye oe ie "rexaelt ed to improved! efficiency the th vee ement si esi doen fe introduced the identhat managennent should heer ale nn roar cant time was excated fo enable management {0 exercise control over Prods ee untied and scivatitcally analyzed; al . Problem areas pertai ny to work were identified and seu y analy fi Problem are (a was selected and implemented. Incentive sy. approach ushered in the scientific m and the best alterna! Stems Weng ty. Taylor hanagemery evalua i 0 introduced to raise produ process (Bares, 1967) ¥ amy Ford introduced the asse d kes in yn i ane alti producing just a few standardized products would increase efficiency jn the fe believ » asserably line and econonay of scale were born. Although th stem. Thus, the concepts of the asserably ono ¢ ia ensate still n use in modern industry, advances in technology and inthe marketplace are cae changes in what was once a dominant model. Flexibility, agility, and economy of. scope are the trends in modem manufacturing. Motion study was introduced in the early 1900s by Frank and Lillian Gilbreth (Gilbr, L911; Niebel, 1988). They advocated reducing wasted movements and finding the best way 4g do ajob, Their methods were implemented in the construction industry and later found their wa into the factories. Taylor’s and the Gilbreths’s aginezting, which profoundly GeipROweAIAeTesTicteneysoRoperation, Many differen! products were produced in the same facility, requiring scheduling activities, Disciplines such a5 planning, inventory control, queuing, and modelling were developed. The pace of development increased during World War I, following an observed pattern in which technological developments are expedited in times of war. During the 1920s and 1930s, concepts of statistical quality control were introduced. Shewhart (GEMM CONIFON Charts and was followed by Deming and Juran, who became active in statistical quality control and quality theory. World War If brought the necessity of efficient muterial-handling systems, improvements in GTOAUGII, AAEMAPPLICALTONSTON STATES) anc OPEALOTSTESCAFEH In the 1950s the digital computer emerged, allowing simulation and better efficiency in the solution of ‘complex numerical problems. The computer innovation ushered in the information age and created a revolution in science and technology development. We are still attempting to cope with the growth of this technology and its associated explosion of knowledge as the second millennium ends and the world moves into the third millennium. we mnbly line and specialization of workers in the ead Today, developments in material technology, information technology, genetic engineering, bioengineering, communications, robotics, manufacturing processes, and organizational theory are but some of the emerging areas in the technological arena. Their impact on society and on our way of life is expected to be immense, Figure 2.4 traces the evolution of production technology, based on a review by Tumer et al. (1993). Many industries all over the world started new paradigms of production and industrial Practices, such as Total Quality Management (TQM), just-in-time, supply chain management, etc. As anillstration, Sundarm Clayton Limited (SCL), a leading Indian producer of aluminium die Casting to automotive and non-automotive sector went thr i ity journe: ; . ‘ough a well- ality journey. It was awarded with Deming’s Prize, ea | |3 ‘ Critical Factors in Managing Technology Biocon, t clog strategy fo innovation’ in new drug’ dace Established in: 1978, it has focused on innovation to develop cutting edge intellectual property, which makes a biotech firm relevant in ever changing competi ive scenario. Biocon’s main forte in its R&D ‘Comes from discoveries and innovations to ciire or manage. three disease Areas, namely (i) immunology, comprising of cancer’ aid autoimmune diseases, ii) i betes, and (iii) ‘cardiovascular, and’ human growth hormones. In: Chairnian: Dr Ki mmdar. Shaw. revealed that Biot atent partiolio.t totals ise fications, of which 148. are Pe applications. and 245 are ring technology areas of fermi ination, ‘protein purification, ‘drug ¢ vapeutic molecules. ards, ‘AS se angels to u scovery and mandated ee vc aichigtaices red as cost-effective destinations for innovation in this area. According t fo Ms: Shaw, “Innovation isabout applied creativity.” {3} For Biocon, innovation means exploring both in existing and non-existing : expertise where either technology i is known or unknown (Fig, 3.1), Creativity and R&D leadership are the instruments to achieve innovations in four modes [1,3]:Critical Factors in Managing ee 1 45 h) innovation is meant for unknown curently eon ing market leadership in innovation 1 is investing in innovation to prevent the onset of iyp . s. The approach Is to develop monoclonal antibodies with Capabily a Sa etrcion of insulin producing ce cells in the pancreas, This May ve 1 anage diabetes. e ee ».the auto-immune system to manage di on ind became competitive in biotechnology? The answer, according to Dr, How can fae knowledge base, combined with c ce base, inca can bewges Shaw is “.:wi : ion and really deliver high rewards by taking affordable ide innovation and really enabler for worldwi high risks.” (I ional (break-throug 4, Transforms f competencies and aimed atc existing areas OF CO! In this direction, Biocon References : : : B Intpukvww bidconcerbiocon_aboutus asp (Accessed on 27 January 2012) 5 hitp/Aiwwaechnologyreview.infoiomedicine/2361 Ofpage2! Accessed on 27 January 2012) Kirain“Mazuipdar Shaw, 2009, Economics: Times, Januiary 02; 2009 (hitp:fartices, éconotnictimes.indiatimes.coiri/2009-01-02/news/27656069_1_innovation-new-drugs. ~ generic-dnug: (Accessed on 27 January 2012) ; 8 =: 4, hitp:/www.wipo.intipadvantage/en/details jsptid=2602 (Accessed on 27 January 2019} ttre tne, eR THE CREATIVITY FACTOR Technology is an expression of human creativity. Managing technology involves continuous effort in creating technology, developing novel products and services, and successfully marketing them. This requires great.creativity along with a system designed to exploit it. It also requires an investment in research and development. R&D is a costly endeavour. It is a risky investment and therefore, needs to be well managed. However, it is an investment in the future that cannot be neglected, nor can its value be underestimated. Technology creation and exploitation require a chain of events, starting with inventions and ending at the marketplace. Invention When the subject of creativity is discussed in the contex associated terms are frequently used: ‘invention’ and ‘innovation’. Invention is either a concept or the creation of a novel technology, [t could be a product, a process, or a previously unknown system. The steam engine, the trans tor, and the Xerox machine are examples of important inventions. Anew composite material, a new manufactured produ, inventions. The word ‘new’ here impli ingenuity and imagination, They occ t of technological change, two closely and a new process constitute es new to the world. Inventions occur as a result of human ‘w only sporadically, sometimes happening by chance or46 Management of Fechnot wientific follower through trial and error to satisty a aved. In mmoderu ines, most invention ae es, For example, inventions in the muclear field fullowe ein's disvovery of the and energy in the carly 1900s, There is usually a Hine lag between slo convert science into technology. Itmay servic en though many atented, only few reach the discoveri relationship between une cientitic discoveries and inventions, [t may take take more years to move an invention to the warket as a product or inventions are generated by creative people, and many of them are p marketplace, Innovation Innovation involves the creation of a product, service, or process that is new to an organization. It is the introduction into the marketplace, either by utilization or by commercialization, ofa new produc, servica, or process It does not have to be new to the world rather, itis viewed as the first use of an icea within an organization (Aiken and Hage, 1979), whether or not the idea has been adopted by other organizations already (Nord and Tucker, 1987). The technology (or the product) need not be novel or groundbreaking. An innovation may be a change in industrial practice, which improves productivity. Schumpeter (1928) defined successful innovation 28 “a task suid generis’-a feat not of intellect but of will. The innovation process involves integration of existing technology and inventions to create a new or improved product, process, or system (Jain and Triandis, 1990). - Inventions and innovations arc intimately related; however, they arenot the samme. An invention can be thought of as an event, while innovation can be thought of as a process. Inventions are not ‘as common, and one invention usually precedes a number of innovations. Insovation represents the important connection between an idea and its exploitation or commercialization. Bright (1969) indicated that technological innovation includes “the initiation of the technical idea, the acquisition of the necessary knowledge, its transformation into usable hardivare or procedure, and its introduction into society and its diffusion and adoption to the point where its impact is significant.” The bottom line of innovation is the market, which will buy it or ignore it, thereby dictating success or failure. MOT encourages invention and the management of innovation. Both are creative processes representing essential cuntponents of any technology-creation and application system. Science deals with understanding the laws of nature. This leads to the discovery of fundamental knowledge about the world, the universe, and all living things. Scientific knowledge focused on natural phenomena is neutral on the question of how this knowledge may be used. It is when scientific knowledge is applied to the things we do in life that knowledge enters the realm of technology. Brooks (1965) argues that science and technology grew up relatively independent of each other until the nineteenth century. However, Braun (1984) observes that the separate and parallel development paths followed by science and technology have now intersected, Bayraktar (1990)Critical Factors in Man % Fi reg Team, te ies owe their origin to s yressed slow! entific dis fic discoveries century, most technolog ly until ve ery re cently, notes that in the gveatiell ing, scientific ienowledge and techinology Pr [fistorically spe! putwhen wetalkab e ae out te ‘The two aie interconnected in that ezch inte . ences @B. Now technology pen the oat iechnology connect with the market, they mee i . uence It may also SHRUB ne nnovatgn satisfy market needs, suchas the need fe ire 3.2 depicts the interaction between create if we mentio ather. Scientific discoveries new scientifis human lives. and request the i tiation of new scienti fic discov vent the spread of @ disease. Figu avaccine to prev discovery, invention, innovation, and the market. May never be developed into marketable products Invention a. Adopting - Hi neni Scientific ., Invention instantaneous | py commercial value | PAPC Innovation Buying or ignoring the innovation Fig. 32, Components of an Innovation ©; ie ; yycle (Scie re Discovery-Invention-Innovation-Market cee Tee ae TYPES OF INNOVATION Innovations can i can influence a ervice i 7 oduct, A service is as import a product, a process, a servic rant as it is i : €, ora system. Tech ical i Sciait in products. It includes enhancing ee ae in service by introducing8 Macagement of tecdmoiagy 2 good idea or developing a new technological agent such as software, Syston mave stows HEY involve aL example the development of different components thal are integiated into a system ofa system innovation is a communication ne work, in which different components ( de computers, fibte optics, sateities, communi eloped and integrated to attain a desited performance, inal, j ane de ution protocois, software, Cle. To gain market acceptanee, an innovation nut contribute to the ereation of value Successful innovations are those perceived by customers to add value, For example, information technology developments introduced in the new Xerox copiers have allowed the tise of artificial intelligence to predict when the machine's next breakdown will occur, Amessage is sent to the branch office, where a computer does further analysis and schedules a repairperson to visit the office before the failure actually happens (Brown, 1991). Customers appreciate this innovation, and they ere willing to pay for it. Innovations can be classified either as radical, or revolutionary, innovations or as incremental, revolutionary, innovations. Radical breakthrough innovations are usually based on an. invention. ‘They change or create new industries, They arc relatively race and typically start outside the boundaries of a firm. When they are developed within the boundaries of a firm, they signify the introduction of something that is not only new to the organization but drastically different from its existing practices, An invention such as the transistor, which was invented at Bell Laboratories, was the starting point of a phenomenal development in the electronics industry, triggering radical innovations in many conipanies. The development Gf xerograply by Chester Carlson and his collaborators triggered radical innovations in the photocopying inclustry and created a market of more than $20 billion, (The case of xerography is discussed in greater detail later in this book.) ‘The other category of innovation comprises the incremental, or evolutionary, innovations. “These are small but important improvements ina product, process, or service. They are relatively common and are created within the firms of an industry. They help companies maintain a competitive position in the marketplace, Japan's Kaizen philosophy, a process of continuous improvetient, is applicable to this type of innovation, which can bring a significant inmprovement in the operations of existing enterprises, The creation of the portable Personal Computer (PC) in 1981 was an incremental technological innovation, since the PC already existed. The innovation consisted of putting all the components of a computer together in a way that made portability possible. This is a product concept that is difficult to protect by @ patent or other means. The development of a flat screen represents a more radical innovation in the portable PC market. Routine innovation is another term sometimes used to refer to the introduction of something that is new to an organization but very similar to what it had in the past (Nord and Tucker, 1987). ‘According to Bower and Christensen (1995), innovations manifests in two forms: either sustaining or disruptive. When there is considerable attention on existing customers, there is a greater possibility that organizations may miss the opportunity to develop disruptive innovations, which has a greater chance to click with new customers. Further, Christensen et al. (2006) highlights catalytic innovations as that subset of disruptive innovations which is primarily intended to bring in social change, as opposed to innovations which are business-driven and cause social change as a side effect. Disruptive innovations may kill present technology and therefore, Christensen et al. (2008) wams for the misuse of conventional financial tools to kill innovation.INNOVATION LEADS TO NANO lof Mr. Ratan Tata, the Chairman of Tata Motors ing fan years. Aa base price of INR is ong eal on January 10, 2008. Bringing a car a this egg SU fforts in cost reduction. It requires innovations at i during the design of the Nano. tis j i s in losses till a few years hack but revived soon und Ch ler the ‘ojet Nano, the dream pr n bout small cars in rect of the most talked al (about $2500) this was launchi possible without tremendous & ‘ levels, which is evident in 34 patents filed to note that the company wa leadership of Mr. Ratan Tata. How is it possible to design and market a car, which was half of the price of Next cheapest car in the market, Maruti 8002 It'is important to understand what were q, to save material, manufacturing and other supply chain costs. ‘one Design Innovation High volume and symmetry in design can reduce cost, f, x is i FOr erent Mportant example, Nano has same handle in left as well right sido, which makes the volume required as double and variety as half. This may bring economy of scale to the whole system. Another, innovative concept is keeping the instrument cluster at the centre of dashboard. This standardizes the part irrespective of left-hand or right-hand drive variants. Other noticeable design innovations to’ reduce cost are: single balancing shaft for twin cylinders, mono» volume design, etc. Use of only one wiper at the front glass is also aimed at reducing cost with almost similar functionality. Instrument cluster at the centre of dashbord Use of seating space in Nano50 Atmayenwont o Material Innovation Nano has about 20" extra seating capacity despite the fact that overall dimension of this car is sipaller than its nearest rival Maruti 100. Many design innovations, like keeping wheels at the extreme edges of the car frame, etc. have contributed towards saving in material cost. The material used is Hight weight steel aluminium to reduce cost. Supply Chain tnnovation As originally planned, the company wants {o involve entrepreneurs, who can cary out simpler assembly with modular kits distributed for these cats. The aim is to cut down distribution cost of the downstream supply chain. Hagel and Brown (2608) points out that for this type of ‘open distribution’ innovation, three innovations in products and processes need to be there: + modularity in products and processes + ability to leverage third-party to reach to target customers in remote areas + Integrated use of information technology to deliver greater value. Another point is related to the location of the main plant, which is in Gujarat, where they have received a lot of incentives from local government. This place {3 nearer to port (for the export market) and nearer to material suppliers. In the midst of the commissionirigof Nano’s original factory at West Bengal, in the Eastern pait of India, there. were serious local issues, due to which the entire plant was shifted to Gujarat, in the Western part of India. All the suppliers of Nano, who were establishing their units in West Bengal, moved near to the new location. This was strategically done to ensure a shorter: léad timé in the inbound side’ of the supply chain. This has led to reduced fy level and vendor managed Inventory setup. : Questions... x 7. As compared to General Motors; which files about 250 patents every year, Nano ~ came out with'34 in the beginning. Some may discount the innovations in the Nano. However, another viewpoint is that the most valiable innovations take existing, patented components and remix them in ways that niore effectively serve the needs of large numbers of customers [2]. Discuss these With reference to Nano and other products of similar type. : Seas : 2. Explore the reasons due to which Nano, despite its many strengths, could not meet the expected market share. 3.. What ate the lessons for a successful innavation that one can have with Nano case- study?jon of judgnvent anni no early conmitiment siv ly : iHingness LO spend time analyzing aud exploring, + The w s ve niellectual and cognitive matters, + Agenuine regacd BRINGING INNO! ATION TO MARKET a .s, there are time lags bebween the different stages of the sequence ofevents—science, invention, innovation, and a atc manipulation Of thes spans is an important and effective competitive enon or cxample, @ com significantly from reducing the time tog, between scientific discovery, tnvention, and introduc, to the marketplace. The sooner an innovation reaches the marketplace, the sooner a com can reap its rewards. However, a company that owns a technological innovation may want a to delay or to speed up the diffusion of technology in the marketplace in order to fully ex, a its benefits. For example, if the diffusion of technology creates more benefit to a compat) lit developing customer commitment to the technology, the firm should speed Up its Giffin I protection of company’s technology is assured, the company imay wish to delay its Giffus, if into the marketplace in order to exploit the technology in its own products, This exclusivity 4 technology provides higher marginal returns, ty of One example of speeding diffusion is M1 ay of licensing its DOS operatiy system for use by many computer companies and then making its Windows 95 program availabe on each PC, thus creating customer commitment to the product. The profit Microsoft made on each unit of software is minimal; however, ihe market penetration permits the cornering of the software market for many years. Apple Computer Company, on the other hand, kept its Macintosh user-friendly operating. system software proprietary for many years and refused to licence it to other PC makers, Apple was able to use its proprietary operating system to its advantage in marketing its own Macintosh, PC. However, Apple’s superior technology was not diffused adequately to permit dot the software market in the long run. BRINGING As Figure 3.2 indicate: ‘Yele's lr ipany may bene mination of Microsoft's strategy had a long-term technology domination effect; Apple's had a shorttean large-profitanargin effect. Microsoft seems to have won the strategy game, Apple could have ~ changed its strategy and diffused its operating system technology, but the company elected not to do so at the opportune time. It has been estimated that then Apple chairman Joha Scully's decision not to licence the Macintosh operating system in the mid-1980s cost Apple Computer $20 to $40 billion (Byrne, 1996), When an entity such as a company has a technological advantage, it is able to command a eum aa for its technology (Figure 3.3). The magnitude of this premium is dependent on © valve ofthe technology to customers. If the During the growth phase of the technology, penetration into the market will depend on the rate of innovation and the market needs for the new technology. (Ii SEO WTS IGwSGoi as the technology approaches its maturity, At some point, the market volume will peak and then start to decline. This will happen when the technology matures Companies that continue to use the old technology in this pha market share and a fall in revenues the technology has little or no value. slow initial growth and enters its substitution phase. se will be faced with a shrinking inal phase is technology obsolescence, during which108 Meragern pe fusion iviodet (Bass, 1969) is one of the BASS DIFFUSION MODEL ass Di reiat fa ; diffusion of tec hnology. In 2004, it vas selected at the top fith place in the fi A frequently cited papers in the 50-year history a i ee ve undeslying assumption in this model is as follows: “pcos had realy ape Ta 8 @ External influence like mass media @ intemal influence like word of mouth. jihetime, Figure 5.6) 2 adoptions Non-curnula’ Cumulative adoptions, ¥() Fig. 5.6 Bass diffusion model made to this (Guluerceseremecimotogyadoption There had been many refinemen“Gaal of one socal etivorks wn 1 vt corn Sf model. Gre ‘ i , diffusion model to estimate the size and growth rate of these CN bey 5 Soci, pe ‘ial ety ah : ths con Bass Questions (i) What limitations (2) Do some. secondary research on Internet and identify the improvised technology diffysion since. Bass (1964). Made i do you see in the Bass Diffusion Model? RATION TECHNOLOGIES _ MULTIPLE-GENE. Tecnology, lie all systems, has a erarchy. ESB can consist OF a rumor «aid each subsystem may have a number of components, Ce: need not consist of a single component or derive ftom a single inn [ og echnology. can consist of multiple technologies and derive from different generat inte personal computer is a technology and has a technology life eyelet gn’ of severnt Sub-technologies, One stich sub-technology is the microprocessor, which can aad defined as a technology with a technology life eycle all its own. In turn, the mnicropoces its own multiple-géueration technologies or sub-technologies. For ex ES technology developed by a company such as Inte! has undergone several generations of chan (8088, 286, 386, 486, Pentium), Each of these gencrations of innovation helped bos! le of the microprocessor and, in turn, that of the PC. (See Figure 5.7.) ’ Haply, the imiovopr ps, the siscoprccey technology life c: ology Sub-technology It Life Cyele Life Cycle Sub-technology IL ‘Sulptechnology | Life Cycle Life Cycle Performance Parameter TECHNOLOGY | a CYCLE ; Time Fig. 5.7 Multiple-generation technologies : Sub-technology lif : chnology life cycles as ede technology life cycle in multiple generations of inmovation shape the overall‘ent of Tecbreiagy The same concept applies to software technology, y- Any software developed for 4 major Mhe changes improve the softwar acutupany developing, sofware stops its dey and another company continues to develop new generations, the fonner will find itself unable to compete with the latter's newer-generation technology, Another situation occu that is making an acquisition investment in the software, If it buy and an update is introduced, the new version has more several gen tion undergo ations of change and ‘clopment alter onz generation s for a company Jone Beneration of software ipabilities and extends the applic of the software. The company inay have to invest to Update its software in order to extend the life cycle of its sofiware technology. : TECHNOLOGY AND MARKET INTERACTION A vory strong dynamic clationship exists between technological innovation and the marketplace, ‘The presence of a market or the'creation of a new market Teptesents the reward for technological development. Breakthroughs in technology open ney vistas for industrial developments and economic growth, However, it is only when technological developments find a market that scientific research pays off and the development cost is reimbursed in economic or so Seience-Technology Push Events of the nineteenth and twentieth centuries provide many illustrations of how science and technology have become closely intertwined. Most of the recenttechnological breakthroughs are based on earlier scientific discoveries. Science provides the base for techoological development, which in tum creates new markets. Bayraktar (1990) cites several examples of technologies that owe their bases to scientific discoveries, as shown in Exhibit 5.1. The ficid of electronics is based on Maxwell's theory of electromagnetism; nuclear energy is based on Einstein's 1905 paper, which established the famous = mc? equation; the transistors are based on A. H, Wilson's 1931 paper on the theory of semiconductors; and genetic engineering followed the discovery of the structure of DNA by Watson and Crick in 1952. In this scnse, we can say that science provides the base for the technological push. Figure 5.8 illustrates this concept. Innovations that ensued from the technologies in Exhibit 5.1 caused major industty upheavals and totally changed the markets, They brought major economic growth. Radical innovations of products within a technology area create similar effects, An example of a radical innovation that created a major change in the way we do business is xerography. When the Xerox machine was developed, it was dubbed an invention with little promise and a product concept without a market (Mort, 1990). Observe where this copying industry is today. Radical innovations create new markets and expand existing markets. ain, 5d and Their Scientilic Base Exhibit ‘twentieth Century Technologies Scientific discovery Technolog} Based on Einstein's 4503 paper, wi energy Based on A.H. Wilson's 1931 theory of semiconductors Nuclear energ Transistors Electronics Based on Maxwell's theory of electromagnetisrn, developed in the 18805 Followed Watson and Crick’s 1952 discovery of the structure of DNA Despite many early attempts in aaily 1990s, James Thompson (University of Wisconsin-Madison) isolated, cells from the inner cell mass of early embryos in 1998, and developed the first embryonic stem cell lines. Around that time, John Gearhart (Johns Hopkins University) derived germ cells from cells in foetal gonadal tissue (primordial germ cells). Pluripotent stern cell ‘lines’ were developed from both sources 9 f | Tecolo ial Development Genetic engineering Stem cell ce Pash Fig. 5.8 Science/technology push The push opens new vistas for industrial development and economic growth. Market Pull Technological development is also stimulated by market pull. Technology is often developed to meet a market need or demand. This is the most effective way to connect technology with the market. However, in the majority of cases, market pull is stimulated by consumers. Consumers may or rnay not know whether a new technology exists or is being developed, or if they do, they may not understand the technology. Most of the technological developments stimulated by market pull are ofan incremental nature, or represent improvements to existing technologies. Incremental technological improvements have a cumulative effect, and they can have a tremendous impact on productivity and competitiveness. When there is a strong collective demand for a solution to a specific problem (such a a vaccine for ALDS), market pull may provoke major breakthroughs. ioe 9) ae a ee mecanisins, push and pull, contribute to stimulating si ange. Integrating them accelerates the change ( 5.10). Figure | aWee ew 7 = y ant Noor (1988) proposed tht comitinent to tect , Hn 10 technology approach to technology push and market pull eben funology and the firm's lechnical acd finmacial mee for technology push and miaket poll ean be integrated + integrated Munro integrate joward 4ee ortunities adoption is dependent ‘ith management's atti » Figure S.A depicts iy to stimulate innovation. opp Iremtental Technology lnnprovernent Market Pull { Fig. 5.9 Market pull The pull stimulates incremental technological improvements. Market Pull Science Push Opportunites for . Opportunites for ‘Technology Push Innovation ‘Market pull + Scientific discoveries » Market demand + Applied knowledge + Proliferation of| + Recognised needs application areas + Intellectual capital + Recognised nes (scientists and engineers) + Opportunites for increased: Profitability, quality, productivity + Entrepreneurs Fig. 8-11. Infegraing tachnology push and market pul to stimulate innovation