Technology Management

Technology and R&D Management



The Management Consortium



© Study Material by PDIMTR faculty for Classroom & Private Circulations only



Technology and R & D Management

STUDY MATERIAL AS PER UNIVERSITY SYLLABUS



First edition: 15 September 2006 Second Revised Edition: 15 September 2007

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Preface

Recent development in the academic field of Management and Commerce studies, by way of introduction of semester pattern for evaluation of performance of the students has brought about dynamic changes. Students are now required to pursue new subjects and with deeper understanding than ever before. The curriculum now encircles vast number of topics leaving students with a dilemma of what to study, to what depth? & Where to search for the study materials. Books available are not comprehensive enough to cater the exact contents of University Syllabus. Keeping the above enigma in mind, an attempt is made by experts of TMC to assist the students by way of providing Study Material as per the curriculum with no commercial considerations. However, it is implicit that these are exam-oriented Study Material only and students are advised to attend regular classes and utilize reference books available in the library for in-depth knowledge.



Author and Editor:

Dr. Mukul Burghate; BE, MBA, SET, Ph. D

Asst. Professor & Co-ordinator; PDIMTR



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Table of Contents

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Contents

Technology Technology Management Technology Life Cycle Technological Change Production Function and Technological Change The Information Technology Revolution Technological Forecasting Diffusion of Technology Technology Transfer Technology Planning Technology Assessment Technology Management in India: Issues and Challenges R & D organization and its Role in Technology Management Intellectual Property Appendix: Uni. Question Papers 5



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143 148



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Chapter-1

Technology

As long as there have been people, there has been technology. Indeed, the techniques of shaping tools are taken as the chief evidence of the beginning of human culture. On the whole, technology has been a powerful force in the development of civilization. Technology—like language, ritual, values, commerce, and the arts—is an intrinsic part of a cultural system and it both shapes and reflects the system's values. In today's world, technology is a complex social enterprise that includes not only research, design, and crafts but also finance, manufacturing, management, labor, marketing, and maintenance. In the broadest sense, technology extends our abilities to change the world: to cut, shape, or put together materials; to move things from one place to another; to reach farther with our hands, voices, and senses. We use technology to try to change the world to suit us better. The changes may relate to survival needs such as food, shelter, or defense, or they may relate to human aspirations such as knowledge, art, or control. But the results of changing the world are often complicated and unpredictable. They can include unexpected benefits, unexpected costs, and unexpected risks—any of which may fall on different social groups at different times. Anticipating the effects of technology is therefore as important as advancing its capabilities.



Definitions of technology

The word “Technology” comes from two Greek words: techno (the skill or craft needed to make something) and loges (discussion or knowledge of something). So Technology means the knowledge of how something is made. An economist or a planner considers technology as a knowledge used in production, commercialization and distribution of goods and services. Technology is embodied in various forms, such as, machinery, equipment, document, processes and skills and as such it conveys different meanings to different specialists under different contexts.



Depending on context, the word technology has the following definitions and uses:

 Technology as tool-In its most common usage, technology is the tools and machines that help to solve problems. In this usage, technology is a far-reaching term that can include both simple tools, such as a wooden spoon, and complex tools, such as the space station. Technology as technique-In this usage, technology is the current state of our knowledge of how to combine resources to produce a desired product, to solve a problem, to fulfill a need, or to satisfy a want. Technology in this sense includes technical methods, skills, processes, techniques, tools and raw materials. (Such as artificial intelligence, building technology, or medical technology). Technology as culture former-a culture-forming (or destroying) activity (such as manufacturing technology, infrastructure technology, or space-travel technology). As a cultural activity, technology predates both science and engineering. This is not to imply that technology is the only culture forming activity, nor that it is the primary culture-forming activity. Often, it is dominant in cultural formation; often, it is not. In addition, culture may act to form technology. Due to widespread, and sometime careless, use of technology, several other topics arise in the study of technology, including technological ethics, environmental impacts, technological by-products, and technological risk, among many other philosophical and sociological topics.











Other definitions:

a. b.



The application of science, especially to industrial or commercial objectives. The scientific method and material used to achieve a commercial or industrial objective.

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c. d. e. f. g. h.



Electronic or digital products and systems considered as a group: a store specializing in office technology. Anthropology. The body of knowledge available to a society that is of use in fashioning implements, practicing manual arts and skills, and extracting or collecting materials. Applying a systematic technique, method or approach to solve a problem. Much of today's technology implies the use of computers. The practical application of science to commerce or industry e.g.: engineering The discipline dealing with the art or science of applying scientific knowledge to practical problems Technology is the systematic application of scientific knowledge to a new product, process, or service.



Technology is also a cultural activity that predates both science and engineering. From the root words, one can properly think of technology as beginning and being rooted in the technique of the logos -writing.This system builds upon itself as technological data is stored and analyzed by specialists. Technology is a far-reaching term that includes both simple tools, such as a wooden spoon, and complex tools, such as the space station. Although some would say that tools such as spoons and clubs are not technological because their use is almost instinctual to humans (and other animals) once their use has been demonstrated even indirectly. These simple tools do not require the use of the technique of writing (logos) and the difference between a spear and a nuclear missile shows the impracticality of using the term "technology" so generally as to include any tool in any discipline. Distinguishing between "high" and "low" technology is often in order to have a reasonable discussion about the advantages and disadvantages offered by the system of technology. In any case, this is not to imply that technology is the only cultural forming activity, nor that it is the primary culture-forming activity. Often, it is dominant in cultural formation; often, it is not. In addition, culture may act to form technology. Due to widespread, and sometime careless, use of technology, several other topics arise in the study of technology, including technological ethics, environmental impacts, technological by-products, and technological risk, among many other philosophical and sociological topics. Several disciplines deal with technology in some form, including engineering, manufacturing, construction, mass media advertising, and militarism.Each discipline has a plethora of unique knowledge about specific technological tools and techniques. By the mid 20th century humans had achieved a level of technological mastery sufficient to leave the surface of the planet for the first time and explore space.



The nature of technology: General characteristics

With all of the technology in use in modern society, it may seem futile to attempt a generalized list of common characteristics. Many authors, such as McGinn and Winston , list the following:  Complexity refers to the characteristic that most modern tools are difficult to understand. Some are easy to use, but difficult to comprehend source and means of make, such as a kitchen knife, or a baseball. Others are both difficult to use and difficult to comprehend, such as a tractor, gasoline, a television, or a computer.  Dependency refers to the fact that modern tools depend on other modern tools, which depend on other modern tools, for their make and their use. Cars, as an example, have a huge complex of industry of means and methods. And to use them requires a complex of road, streets, highways, and gasoline stations, waste collection, etc., beyond our comprehension.  Valence refers to the many, many different types of the same tool. Imagine the many different types of spoons available today, or scissors, and even complex tools come in many shape as well, like the construction crane, or the automobile.  Scale refers to the sheer magnitude, size, and pervasiveness of modern technology. Simply put, technology seems to be everywhere. It dominates modern life. Scale refers also to the magnitude of some modern technological projects, like the cellular telephone network, the Internet, air travel, satellites, etc.

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Science and Technology: Technology Draws on Science and Contributes to It

The lines between science and technology are not always clear. Generally, science is the reasoned investigation or study of nature, aimed at finding out the truth, generally according to the scientific method. Technology is the application of knowledge (scientific, engineering, and/or otherwise) to achieve a practical result. For example, science might study the flow of electrons in an electric current. This knowledge may be used to create artifacts, such as semiconductors, computers, and other forms of technology. In earlier times, technology grew out of personal experience with the properties of things and with the techniques for manipulating them, out of know-how handed down from experts to apprentices over many generations. The know-how handed down today is not only the craft of single practitioners but also a vast literature of words, numbers, and pictures that describe and give directions. But just as important as accumulated practical knowledge is the contribution to technology that comes from understanding the principles that underlie how things behave—that is, from scientific understanding. Engineering, the systematic application of scientific knowledge in developing and applying technology, has grown from a craft to become a science in itself. Scientific knowledge provides a means of estimating what the behavior of things will be even before we make them or observe them. Moreover, science often suggests new kinds of behavior that had not even been imagined before, and so leads to new technologies. Engineers use knowledge of science and technology, together with strategies of design, to solve practical problems. In return, technology provides the eyes and ears of science—and some of the muscle, too. The electronic computer, for example, has led to substantial progress in the study of weather systems, demographic patterns, gene structure, and other complex systems that would not have been possible otherwise. Technology is essential to science for purposes of measurement, data collection, treatment of samples, computation, transportation to research sites (such as Antarctica, the moon, and the ocean floor), sample collection, protection from hazardous materials, and communication. More and more, new instruments and techniques are being developed through technology that makes it possible to advance various lines of scientific research. Technology does not just provide tools for science, however; it also may provide motivation and direction for theory and research. The theory of the conservation of energy, for example, was developed in large part because of the technological problem of increasing the efficiency of commercial steam engines. The mapping of the locations of the entire set of genes in human DNA has been motivated by the technology of genetic engineering, which both makes such mapping possible and provides a reason for doing so. As technologies become more sophisticated, their links to science become stronger. In some fields, such as solid-state physics (which involves transistors and superconductors), the ability to make something and the ability to study it are so interdependent that science and engineering can scarcely be separated. New technology often requires new understanding; new investigations often require new technology.



History of Technology

The history of technology is as old as the history of humanity because history proper refers to what could be recorded by technological means. Mind you that other animals currently use tools and animals prior to human existence may have as well. The history of technology follows a progression from simple (lowtech) tools and simple energy sources to complex hi-tech tools. The earliest technologies converted natural resources into simple tools. Processes such as carving, chipping, scraping, rolling (the wheel), and sun-baking are simple means for the conversion of raw materials into usable products. Anthropologists have uncovered many early human houses and tools made from natural resources (although birds also build nests out of dried materials and we don't consider them to have a technological society). The use, and then mastery, of fire was a key turning point in man's technological evolution providing him with simple energy. The use of fire extended the capability for the treatment of natural resources and allowed the use of natural resources that require heat to be useful. Wood and charcoal were among the first materials used as a fuel. Wood, clay, and rock (such as limestone), would be among the earliest materials shaped or treated by fire, for making weapons, pottery, bricks, and cement, among others. Continuing improvements such as the furnace enabled the ability to smelt and forge metal (such as copper, ca. 8000 BC), and eventually to the discovery of alloys, such as brass and bronze (ca. 4000 BC).

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The first use of iron alloys, steel, dates to around 1400 BC. Complex tools include such simple machines as the lever (ca. 300 BC), the screw (ca. 400 BC), and the pulley, and such complex machinery as the ocean liner, the engine, the computer, modern communications devices, the electric motor, the jet engine, among many others. Again we are confronted with an ambiguous vagueness as we categorise the lever with the jet engine. As tools increase in complexity, so does the type of knowledge needed to support them. Modern tools require written technical manuals of collected information that his been countinually added to and improved upon and are so complex, that entire technical knowledge-based processes and practices (also complex tools themselves) exist to support them, including engineering, medicine, computer science, etc. Further, complex tools require complex manufacturing and construction techniques and machines. Entire industries have arisen to support and develop complex tools.



Science and Technology in Ancient India

Science and technology in ancient India covered many major branches of human knowledge and activities, including mathematics, astronomy and physics, metallurgy, medical science and surgery, fine arts, mechanical and production technology, civil engineering and architecture, shipbuilding and navigation, sports and games. According to the 19th century British historian, Grant Duff: "Many of the advances in the sciences that we consider today to have been made in Europe were in fact made in India centuries ago."



Sciences

1) Astronomy

Classical Indian astronomy documented in literature spanning the Maurya (Vedanga Jyotisha, ca. 5th century BCE) to the Mughal (such as the 16th century Kerala school) periods. The first named authors writing treatises on astronomy emerge from the 5th century CE, the date when the classical period of Indian astronomy can be said to begin. Besides the theories of Aryabhata in the Aryabhatiya and the lost Arya-siddhānta, we find the Pancha-Siddhāntika of Varahamihira. From this time on, we find a predominance of geocentric models, and possibly heliocentric models, in Indian astronomy, in contrast to the "Merucentric" astronomy of Puranic, Jaina and Buddhist traditions whose actual mathematics has been largely lost and only fabulous accounts remain. The astronomy and the astrology of ancient India (Jyotisha) is based upon sidereal calculations, although a tropical system was also used in a few cases. For example, Uttarayana was determined according to a tropical system in the Mahabharata, or by Lagadha in the Vedanga Jyotisha. But even then, sidereal astronomy was the mainstay. Now, even Uttarāyana is determined according to the sidereal system of Hindus.



2) Linguistics

Linguistics (along with phonology, morphology, etc.) first arose among Indian grammarians who were attempting to catalog and codify Sanskrit's rules. Modern linguistics owes a great deal to these grammarians, and to this day, for example, key terms for compound analysis such as bahuvrihi are taken from Sanskrit. Linguistics was pursued in ancient India for many centuries. The Sanskrit grammar of Pāṇ ini (c. 520 – 460 BCE), who is often considered the founder of linguistics, contains a particularly detailed description of Sanskrit morphology, phonology and roots, evincing a high level of linguistic insight and analysis. In particular, he is most famous for formulating the 3,959 rules of Sanskrit morphology in the text Aṣ ṭ ādhyāyī. His sophisticated grammar of Sanskrit continues to be in use to this day. The Indian grammatical tradition is believed to have been active for many centuries before Pāṇ ini, and anticipates by millennia certain developments in the West, such as the phoneme and the generation of word forms by the successive application of morphological rules for example. (Outside of India, the phoneme seems to have been discovered and forgotten several times through history.) The South Indian linguist Tolkāppiyar (c. 3rd century BCE) wrote the Tolkāppiyam, the grammar of Tamil, which is also still in use today. Bhartrihari (c. 450 – 510) was another important author on Indic linguistic theory. He theorized the act of speech as being made up of three stages: conceptualization by the speaker;

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performance of speaking; and comprehension by the interpreter. The work of Pāṇ ini, and the later Indian linguist Bhartrihari, had a significant influence on many of the foundational ideas proposed by Ferdinand de Saussure, professor of Sanskrit, who is widely considered the father of modern structural linguistics.



3) Mathematics

Main authors of classical Indian mathematics (400 CE to 1200 CE) are scholars like Aryabhata, Brahmagupta, and Bhaskara II. Indian mathematicians made early contributions to the study of the decimal number system, zero, negative numbers, arithmetic, and algebra. In addition, trigonometry, having evolved in the Hellenistic world and having been introduced into ancient India through the translation of Greek works, was further advanced in India, and, in particular, the modern definitions of sine and cosine were developed there. These mathematical concepts were transmitted to the Middle East, China, and Europe and led to further developments that now form the foundations of many areas of mathematics.



4) Medicine and surgery

Ayurvedic practice was flourishing during the time of Buddha (around 520 BC), and in this period the Ayurvedic practitioners were commonly using Mercuric-sulphur combination based medicines. An important Ayurvedic practitioner of this period was Nagarjuna, a Buddhist herbologist, famous for inventing various new drugs for the treatment of ailments. Nagarjuna was accompanied by Surananda, Nagbodhi, Yashodhana, Nityanatha, Govinda, Anantdev, Vagbhatta etc. During the regime of Chandragupta Maurya (375-415 AD), Ayurveda was part of mainstream Indian medical techniques, and continued to be so until the colonisation by the British. Chakrapani Dutta (DuttaSharma) was a Vaid Brahman of Bengal who wrote books on Ayurveda such as "Chakradutta" and others. Chakrapani Dutta was the Rajavaidya of Great King Laxman Sen {some says rajVaid of King Nayapala (1038 - 1055)}. It is believed by some practitioners that Chakradutta is the essence of Ayurveda. Ayurveda has always been preserved by the people of India as a traditional "science of life", despite increasing adoption of European medical techniques during the time of British rule. For several decades the reputation and skills of the various Ayurvedic schools declined markedly as Western medicine and Western-style hospitals were built. However, beginning in the 1970s, a gradual recognition of value of Ayurveda returned, and today Ayurvedic hospitals and practitioners are flourishing throughout all of India. As well, the production and marketing of Ayurvedic herbal medicines has dramatically increased, as well as scientific documentation of benefits. Today, Ayurvedic medicines are available throughout the world.



5) Physics

A number of Indian theories on physics have attracted the attention of Indologists. Veteran Australian Indologist Arthur Llewellyn Basham has concluded that: "They were brilliant imaginative explanations of the physical structure of the world, and in a large measure, agreed with the discoveries of modern physics."



6) Atomism

The concept of the atom in ancient India derives from the classification of the material world in five basic elements by Indian philosophers. This classification existed since Vedic times (c. 1500 BCE). The elements were the earth (prithvi), fire (agni), air (vayu), water (jaal) and ether or space (aksha). The elements were associated with human sensory perceptions: smell, touch, vision, taste and ether/space respectively. Later, Buddhist philosophers replaced ether/space with life, joy and sorrow. Ancient Indian philosophers believed that all elements except ether were physically palpable and hence comprised of minuscule particles. The smallest particle, which could not be subdivided, was called paramanu in Sanskrit (shortened to parmanu), from parama (ultimate or beyond) and anu (atom). Thus, "paramanu" literally means "beyond atom" and this was a concept at an abstract level which suggested the possibility of splitting atoms, which is now the source of atomic energy. However, the term "atom" should not be conflated with the concept of atom as it is understood today. The 6th century BCE Indian philosopher Kanada was the first person who went deep systematically in such theorization. Another Indian philosopher, Pakudha Katyayana, a contemporary of Buddha, also propounded the ideas of atomic constitution of the material world. All these were based on logic and philosophy and lacked any empirical basis for want of commensurate technology. Will Durant wrote in Our Oriental Heritage: "Two systems of Hindu thought propound physical theories suggestively similar to those of

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Greece. Kanada, founder of the Vaisheshika philosophy, held that the world was composed of atoms as many in kind as the various elements. The Jains more nearly approximated to Democritus by teaching that all atoms were of the same kind, producing different effects by diverse modes of combinations. Kanada believed light and heat to be varieties of the same substance; Udayana taught that all heat comes from the sun; and Vachaspati, like Newton, interpreted light as composed of minute particles emitted by substances and striking the eye."



7) Light

In ancient India, the philosophical schools of Samkhya and Vaisheshika, from around the 6th – 5th century BCE, developed theories on light. According to the Samkhya school, light is one of the five fundamental "subtle" elements (tanmatra) out of which emerge the gross elements. The atomicity of these elements is not specifically mentioned and it appears that they were actually taken to be continuous. According to the Vaisheshika school, motion is defined in terms of the movement of the physical atoms and it appears that it is taken to be non-instantaneous. Light rays are taken to be a stream of high velocity of tejas (fire) atoms. The particles of light can exhibit different characteristics depending on the speed and the arrangements of the tejas atoms. Around the first century, the Vishnu Purana refers to sunlight as "the seven rays of the sun". Later in 499, Aryabhata, who proposed a heliocentric solar system of gravitation in his Aryabhatiya, wrote that the planets and the Moon do not have their own light but reflect the light of the Sun. The Indian Buddhists, such as Dignāga in the 5th century and Dharmakirti in the 7th century, developed a type of atomism that is a philosophy about reality being composed of atomic entities that are momentary flashes of light or energy. They viewed light as being an atomic entity equivalent to energy, similar to the modern concept of photons, though they also viewed all matter as being composed of these light/energy particles.



Technology

1) Chemistry and metallurgy

Ancient India‘s development in chemistry was not confined at an abstract level like physics, but found development in a variety of practical activities. Metallurgy has remained central to all civilizations, from the Bronze Age and the Iron Age, and later. It is believed that the basic idea of smelting reached ancient India from Mesopotamia and the Near East. In ancient India, the science of smelting reached a high level of refinement and precision. In the 5th century BCE, the Greek historian Herodotus observed that the: "Indian and the Persian army used arrows tipped with iron." The ancient Romans used armour and cutlery made of Indian iron. In India itself, certain objects testify to the high level of metallurgy. An iron pillar believed to be cast in the Gupta period around the 5th century stands by the side of Qutub Minar World heritage site in Delhi. It is 7.32 m tall, with a diameter of 40 cm at the base tapering to 30 cm at the top, and is estimated to weigh 6 tonnes. Standing in the open for last 1500 years, it has withstood wind, heat and water without rusting, except for very minor natural erosion. This kind of rust-proof iron was not possible until iron and steel was discovered a few decades before. An influential Indian metallurgist and alchemist was Nagarjuna (b. 931). He wrote the treatise Rasaratnakara that deals with preparations of rasa (mercury) compounds. It gives a survey of the status of metallurgy and alchemy in the land. Extraction of metals such as silver, gold, tin and copper from their ores and their purification were also mentioned in the treatise. Ancient India's advanced chemical science also finds expression in activities like distillation of perfumes and fragrant ointments, manufacturing of dyes and chemicals, preparation of pigments and colours, and polishing of mirrors. Paintings found on walls of Ajanta and Ellora World Heritage sites still look fresh after 1000 years, further testifying to the high level of science. Will Durant wrote in Our Oriental Heritage: "Something has been said about the chemical excellence of cast iron in ancient India, and about the high industrial development of the Gupta times, when India was looked to, even by Imperial Rome, as the most skilled of the nations in such chemical industries as dyeing, tanning, soap-making, glass and cement... By the sixth century the Hindus were far ahead of Europe in industrial chemistry; they were masters of calcinations, distillation, sublimation, steaming, fixation, the production of light without heat, the mixing of anesthetic and soporific powders, and the

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preparation of metallic salts, compounds and alloys. The tempering of steel was brought in ancient India to a perfection unknown in Europe till our own times; King Porus is said to have selected, as a specially valuable gift from Alexander, not gold or silver, but thirty pounds of steel. The Moslems took much of this Hindu chemical science and industry to the Near East and Europe; the secret of manufacturing "Damascus" blades, for example, was taken by the Arabs from the Persians, and by the Persians from India."



2) Civil engineering and architecture

India‘s urban civilization is traceable to Mohenjodaro and Harappa, now in Pakistan, where planned urban townships existed 5000 years ago. From then on, Indian architecture and civil engineering continued to develop, and was manifestated temples, palaces and forts across the Indian peninsula and neighbouring regions. Architecture and civil engineering was known as sthapatya-kala, literally "the art of constructing". During the Kushan Empire and Mauryan Empire, Indian architecture and civil engineering reached regions like Baluchistan and Afghanistan. Statues of Buddha were cut out, covering entire mountain cliffs, like in Buddhas of Bamyan, Afghanistan. Over a period of time, ancient Indian art of construction blended with Greek styles and spread to Central Asia. On the east, Buddhism took Indian style architecture and civil engineering to places like Sri Lanka, Indonesia, Malaysia, Vietnam, Laos, Cambodia, Thailand, Burma, China, Korea and Japan. Angkor Wat is a testimony to the contribution of Indian civil engineering and architecture to Cambodian Khmer heritage. In mainland India, there are several ancient architectural marvels, including World Heritage Sites like Ajanta, Ellora, Khajuraho, Konark, Mahabodhi Temple, Sanchi, Brihadisvara Temple and Mahabalipuram.



3) Production technology

Mechanical and production technology of ancient India ensured processing of natural produce and their conversion into merchandise of trade, commerce and export. A number of travelers and historians (including Megasthanes, Ptolemy, Faxian,Xuanzang, Marco Polo, Al Baruni and Ibn Batuta) have indicated a variety of items, which were produced, consumed and exported around that society's "known world" by the ancient Indians.



4) Shipbuilding and navigation

The science of shipbuilding and navigation were well-known to ancient Indians. Sanskrit and Pali texts are replete with maritime references. Indians, particularly from coastal regions, traded with several nations across the Bay of Bengal like Cambodia, Java, Sumatra, Borneo, even China and South America, and across the Arabian Sea like Arabia, Egypt and Persia. A panel found in Mohenjodaro depicts a sailing craft, and thousands of years later Ajanta murals also depict a sea-faring ship. Around 500 CE, sextants and mariner‘s compass were not unknown to ancient Indian shipbuilders and navigators. J.L. Reid, a member of the Institute of Naval Architects and Shipbuilders, England, around the beginning of the 20th century wrote in the Bombay Gazetteer (Volume XIII, Part II, Appendix A) that "The early Hindu astrologers are said to have used the magnet, in fixing the North and East, in laying foundations, and other religious ceremonies. The Hindu compass was an iron fish that floated in a vessel of oil, pointing north. The fact of this older Hindu compass seems placed beyond doubt by the Sanskrit word MATSYA-YANTRA ("fish-machine"), which Molesworth calls "mariner's compass".



Fine arts

Music had a divine character and the Indian Goddess of learning, Saraswati, is always shown holding a veena. Likewise, Krishna is associated with the "bansuri", (flute) — a musical instrument which traveled throughout the world from India. Indian devotional songs and reciting influenced religious recitations in several eastern countries, where the style was adopted by Buddhists monks. India developed several types of musical instruments and forms of dancing, with delicate body movements and grace. Paintings have remained the oldest art form as found in several cave paintings across the globe. Prehistoric cave paintings have been discovered in India in places like Bhimbetka, a UNESCO World Heritage site. In relatively recent times, rock paintings and carvings had significantly developed, and many such carvings have been found dating to the period of Emperor Ashoka. Indian influences may be seen in paintings at Bamyan, Afghanistan, and in Miran and Domko in Central Asia. Sometimes, they

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depict not only Buddha but Hindu deities such as Shiva, Ganesha and Surya.



Games and sports

Several games now familiar across the world originated in India: chess, ludo, snakes and ladders, and playing cards. The epic Mahabharata (c. 500 BCE) narrates an incident where a game called chaturanga was played between two groups of warring cousins. In some form or the other, the game continued to evolve into chess. H. J. R. Murry, in his book A History of Chess, concluded that "chess is a descendant of an Indian game played in the 7th century CE". The Encyclopædia Britannica states, "we find the best authorities agreeing that chess existed in India before it is known to have been played anywhere else". The game of cards also developed in ancient India. Abul Fazal was a scholar in the court of Mughal emperor Akbar. His book, Ain-e-Akbari, which mirrors life of that time, records game of cards is of Indian origins. The Buddha games list, which dates back to the 6th or 5th century BCE, is the earliest list of games known. Indian martial arts have been practiced for millennia. In particular, Kalaripayattu is native to the South Indian state of Kerala. Kalaripayattu consists of a series of intricate movements that train the body and mind.



Technological and Socio-economic planning: Relationship with society

The relationship between society and technology is quite complex, creating what many characterize as a co-dependence upon the other; society creates and depends upon technology to meet its needs and desires, and technology's very existence arises due to society's needs and desires. However, this "symbiosis" goes further than that: Every advancement in technology influences and eventually changes society. So the needs of society change, creating more needs, and, eventually, creating more technology. Consider the telephone, and its latest sibling the mobile phone. With the invention of the telephone, society began to depend on quicker ways of communication with others. Higher expectations for quicker communications were initially met using short-range radio systems for use in emergency vehicles. However, even higher portability was realized with miniaturization of components. This demand for a new product led to the invention of the mobile phone. The influence of portability is so pervasive now anyone can be accessible to talk in most Metropolitan places in the India. Individual inventiveness is essential to technological innovation. Nonetheless, social and economic forces strongly influence what technologies will be undertaken, paid attention to, invested in, and used. Such decisions occur directly as a matter of government policy and indirectly as a consequence of the circumstances and values of a society at any particular time. Decisions about which technological options will prevail are influenced by many factors, such as consumer acceptance, patent laws, the availability of risk capital, the government budget process, local and national regulations, media attention, economic competition, tax incentives, and scientific discoveries. The balance of such incentives and regulations usually bears differently on different technological systems, encouraging some and discouraging others. Technology has strongly influenced the course of history and the nature of human society, and it continues to do so. The great revolutions in agricultural technology, for example, have probably had more influence on how people live than political revolutions; changes in sanitation and preventive medicine have contributed to the population explosion (and to its control); bows and arrows, gunpowder, and nuclear explosives have in their turn changed how war is waged; and the microprocessor is changing how people write, compute, bank, operate businesses, conduct research, and communicate with one another. Technology is largely responsible for such large-scale changes as the increased urbanization of society and the dramatically growing economic interdependence of communities worldwide. Historically, some social theorists have believed that technological change (such as industrialization and mass production) causes social change, whereas others have believed that social change (such as political or religious changes) leads to technological change. However, it is clear that because of the web of connections between technological and other social systems, many influences act in both directions. More often than not, social needs (as arising from geographic, climactic or living conditions) have been the primary impetus for technological progress in society. The long dry months that most regions of India had to deal with led to numerous innovations in water-management techniques. Irrigation canals, wells of different types, storage tanks and a variety of water-harvesting techniques were developed throughout

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the sub-continent. The Harappans were not alone in creating water-management solutions. Irrigation works of enormous size were undertaken time and time again. The reservoirs at Girnar in Kathiawar (built in the 3rd C. BC) had an embankment over 100 ft thick at the base. The artificial lake at Bhojpur (near Bhopal) commisioned by Raja Bhoj in the 11th C covered 250 sq. miles. In the South, also in the 11th C., an artificial lake fed by the Kaveri river had a 16-mile long embankment with stone sluices and irrigation channels. Rajput kings built artificial lakes throughout the desert state of Rajasthan, but irrigation schemes were essential to agricultural prosperity even in Kashmir, Bengal and the delta regions of the South. The need for accurate prediction of the monsoons spurred developments in astronomy while the intense heat of the summer led to innovations in architecture. In Rajasthan and Gujarat step-wells were built deep into the ground - sometimes descending as much as a hundred feet and large-scale observatories were built in Benaras, Mathura and Ujjain to facilitate advances in the astronomical sciences. Bengal became known for it's fine muslins that were light and airy to wear in the warm and humid climate of the state. Techniques for pickling and preserving fruits, vegetables, fish and meats were developed throughout the country to prevent or delay spoilage. Manually operated cooling devices were also invented. The Arthashatra mentions the variyantra (probably a revolving water spray for cooling the air). Technology thus arose in response to compelling material needs.



Sociological factors and effects

The use of technology has a great many effects; these may be separated into intended effects and unintended effects. Unintended effects are usually also unanticipated, and often unknown before the arrival of a new technology. Nevertheless, they are often as important as the intended effect. The most subtle side effects of technology are often sociological. They are subtle because the side effects may go unnoticed unless carefully observed and studied. These may involve gradually occurring changes in the behavior of individuals, groups, institutions, and even entire societies.



Values

The implementation of technology influences the values of a society by changing expectations and realities. The implementation of technology is also influenced by values. There are (at least) three major, interrelated values that inform, and are informed by, technological innovations:  Mechanistic world view: Viewing the universe as a collection of parts, (like a machine), that can be individually analyzed and understood. This is a form of reductionism that is rare nowadays. However, the "neo-mechanistic world view" holds that nothing in the universe cannot be understood by the human intellect.  Efficiency: A value, originally applied only to machines, but now applied to all aspects of society, so that each element is expected to attain a higher and higher percentage of its maximal possible performance, output, or ability.  Social progress: The belief that there is such a thing as social progress, and that, in the main, it is beneficent. Before the Industrial Revolution, and the subsequent explosion of technology, almost all societies believed in a cyclical theory of social movement and, indeed, of all history and the universe. This was, obviously, based on the cyclicity of the seasons, and an agricultural economy's and society's strong ties to that cyclicity.



Ethics

Winston (2003) provides an excellent summary of the ethical implications of technological development and deployment. He states there are four major ethical implications:  Challenges traditional ethical norms. Because technology impacts relationships among individuals, it challenges how individuals deal with each other, even in ethical ways. One example of this is challenging the definition of "human life" as embodied by debates in the areas of abortion, euthanasia, capital punishment, etc., which all involve modern technological developments.  Creates an aggregation of effects. One of the greatest problems with technology is that its detrimental effects are often small, but cumulative. Such is the case with the pollution from the burning of fossil fuels in automobiles. Each individual automobile creates a very small, almost negligible, amount of pollution, however the cumulative effect could possibly contribute to the global warming effect.

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Other examples include accumlations of chemical pollutants in the human body, urbanization effects on the environment, etc.  Changes the distribution of justice. In essence, those with technology tend to have higher access to justice systems. Or, justice is not distributed equally to those with technology versus those without.  Provides great power. Not only does technology amplify the ability, and hence the strength, of humans, it also provides a great strategic advantage to the human(s) who hold the greatest amount of technology. Consider the strategic advantage gained by having greater technological innovations in the military, pharmaceuticals, computers, etc. For example, Bill Gates has considerable influence (even outside of the computer industry) in the course of human affairs due to his successful implementation of computer technology.



Lifestyle

Technology, throughout history, has allowed people to complete more tasks in less time and with less energy. Many herald this as a way of making life easier. However, work has continued to be proportional to the amount of energy expended, rather than the quantitative amount of information or material processed. Technology has had profound effects on lifestyle throughout human history, and as the rate of progress increases, society must deal with both the good and bad implications. In many ways, technology simplifies life.  The rise of a leisure class  A more informed society can make quicker responses to events and trends  Sets the stage for more complex learning tasks  Increases multi-tasking (although this may not be simplifying)  Global Networking  Creates denser social circles  Cheap price In other ways, technology complicates life.  Pollution is a serious problem in technologically advanced society. (From acid rain, to global warming, to Chernobyl and Bhopal)  The increase in transportation technology has brought congestion in some areas.  Technicism  New forms of danger existing as a consequence of new forms of technology, such as the first generation of nuclear reactors.  New forms of entertainment, such as video games and internet access could have possible social effects on areas such as academic performance.  Creates new diseases and disorders such as obesity, laziness and a loss of personality.



Institutions and groups

Technology often enables organizational and bureaucratic group structures that otherwise and heretofore were simply not possible. Example of this might include:  The rise of very large organizations: e.g., governments, the military, health and social welfare institutions, supranational corporations.  The commercialization of leisure: sports events, products, etc. (McGinn)  The almost instantaneous dispersal of information (especially news) and entertainment around the world.



International

Technology enables greater knowledge of international issues, values, and cultures. Due mostly to mass transportation and mass media, the world seems to be a much smaller place, due to the following, among others:  Globalization of ideas  Embeddedness of values  Population growth and control

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Decisions about the Use of Technology Are Complex

Most technological innovations spread or disappear on the basis of free-market forces—that is, on the basis of how people and companies respond to such innovations. Occasionally, however, the use of some technology becomes an issue subject to public debate and possibly formal regulation. One way in which technology becomes such an issue is when a person, group, or business proposes to test or introduce a new technology—as has been the case with contour plowing, vaccination, genetic engineering, and nuclear power plants. Another way is when a technology already in widespread use is called into question—as, for example, when people are told (by individuals, organizations, or agencies) that it is essential to stop or reduce the use of a particular technology or technological product that has been discovered to have, or that may possibly have, adverse effects. In such instances, the proposed solution may be to ban the burial of toxic wastes in community dumps, or to prohibit the use of leaded gasoline and asbestos insulation. Rarely are technology-related issues simple and one-sided. Relevant technical facts alone, even when known and available (which often they are not), usually do not settle matters entirely in favor of one side or the other. The chances of reaching good personal or collective decisions about technology depend on having information that neither enthusiasts nor skeptics are always ready to volunteer. The long-term interests of society are best served, therefore, by having processes for ensuring that key questions concerning proposals to curtail or introduce technology are raised and that as much relevant knowledge as possible is brought to bear on them. Considering these questions does not ensure that the best decision will always be made, but the failure to raise key questions will almost certainly result in poor decisions. The key questions concerning any proposed new technology should include the following: Individual citizens may seldom be in a position to ask or demand answers for these questions on a public level, but their knowledge of the relevance and importance of answers increases the attention given to the questions by private enterprise, interest groups, and public officials. Furthermore, individuals may ask the same questions with regard to their own use of technology—for instance, their own use of efficient household appliances, of substances that contribute to pollution, of foods and fabrics. The cumulative effect of individual decisions can have as great an impact on the large-scale use of technology as pressure on public decisions can. Not all such questions can be answered readily. Most technological decisions have to be made on the basis of incomplete information, and political factors are likely to have as much influence as technical ones, and sometimes more. But scientists, mathematicians, and engineers have a special role in looking, as far ahead and as far a field as is practical to estimate benefits, side effects, and risks. They can also assist by designing adequate detection devices and monitoring techniques, and by setting up procedures for the collection and statistical analysis of relevant data.



Technologies Always Have Side Effects

In addition to its intended benefits, every design is likely to have unintended side effects in its production and application. On the one hand, there may be unexpected benefits. For example, working conditions may become safer when materials are molded rather than stamped, and materials designed for space satellites may prove useful in consumer products. On the other hand, substances or processes involved in production may harm production workers or the public in general; for example, sitting in front of a computer may strain the user's eyes and lead to isolation from other workers. And jobs may be affected— by increasing employment for people involved in the new technology, decreasing employment for others involved in the old technology, and changing the nature of the work people must do in their jobs. It is not only large technologies—nuclear reactors or agriculture—that are prone to side effects, but also the small, everyday ones. The effects of ordinary technologies may be individually small but collectively significant. Refrigerators, for example, have had a predictably favorable impact on diet and on food distribution systems. Because there are so many refrigerators, however, the tiny leakage of a gas used in their cooling systems may have substantial adverse effects on the earth's atmosphere. Some side effects are unexpected because of a lack of interest or resources to predict them. But many are not predictable even in principle because of the sheer complexity of technological systems and the inventiveness of people in finding new applications. Some unexpected side effects may turn out to be ethically, aesthetically, or economically unacceptable to a substantial fraction of the population, resulting in conflict between groups in the community. To minimize such side effects, planners are turning to

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systematic risk analysis. For example, many communities require by law that environmental impact studies be made before they will consider giving approval for the introduction of a new hospital, factory, highway, waste-disposal system, shopping mall, or other structure. Risk analysis, however, can be complicated. Because the risk associated with a particular course of action can never be reduced to zero, acceptability may have to be determined by comparison to the risks of alternative courses of action, or to other, more familiar risks. People's psychological reactions to risk do not necessarily match straightforward mathematical models of benefits and costs. People tend to perceive a risk as higher if they have no control over it (smog versus smoking) or if the bad events tend to come in dreadful peaks (many deaths at once in an airplane crash versus only a few at a time in car crashes). Personal interpretation of risks can be strongly influenced by how the risk is stated—for example, comparing the probability of dying versus the probability of surviving, the dreaded risks versus the readily acceptable risks, the total costs versus the costs per person per day, or the actual number of people affected versus the proportion of affected people.



Side effects

There are two types of effects from the use of technology, main effects and side effects. Main effects are those intended by the technology, usually to fulfill some desire or need. Side effects are (usually) unintended, and often unknown prior to technology's implementation. This portion of the topic deals with those side effects. 1) Sociological The most subtle side effects from technological uses are sociological in nature. Subtle because those side effects can go unnoticed without careful observation and contemplation of individual, institutional, and group behaviors. 2) Values The implementation of technology influence the values (beliefs, ideas, opinions) of society by changing expectations and realities. There are (at least) three major, interrelated, values that are the result of technological innovations:  Mechanistic World View. A set of beliefs that views the universe as a collection of parts, like a machine, that can be individually analyzed and understood.  Efficiency. A value, originally applied only to machines, but now placed upon all aspects of society, whereby each element (organizational structures and human beings) is expected to attain higher and higher performance, output, ability, etc.  Progressivism. The belief that societal progress is good. 3) Ethics Winston provides an excellent summary of the ethical implications of technological development and deployment. He states there are four major ethical implications:  Challenges traditional ethical norms.  Creates an aggregation of effects.  Changes the distribution of justice.  Provides great power. 4) Lifestyle In many ways, technology simplifies life.  The rise of a leisure class  More informed  Sets the stage for more complex learning tasks  Increases multi-tasking  Global Networking  Creates denser social circles In other ways, technology complicates life.  More people are currently starving now that at any point in history or pre-history  Work to drive to drive to work to work to drive -- consequently dealing with the traffic jams.  Too much information  Consumerism  Can cause obesity and laziness

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 Distraction among students-internet, gaming, etc. can take away from academic performance 5)Institutions and groups Technology influences, often enables, organizational and bureaucratic group structures and influence. Example of this include:  The rise of organizations: e.g., health institutions.  The commericalization of leisure: sports events, products, etc.  The advent of large organizational structures. 6) International Technology provides a heightened awareness of international issues, values, and cultures. Due mostly to mass transportation and mass media, the world seems to be a much smaller place due to the following, among others:  Globalization of ideas  Embeddedness of values  Population growth and control 7) Environmental The effects of technology on the environment is both obvious and subtle. The more obvious effects include the depletion of nonrenewable natural resources (such as petroleum, coal, ores), and the added pollution of air, water, and land. The more subtle effects include debates over long-term impacts (e.g., global warming, deforestation, natural habitat destruction, costal wetland loss)



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Chapter-2

Technology Management

Many factors make up the technology development framework and there are several ways of condensing these into a manageable numbest of grouping. These factors can be grouped in six broad dimensions: i) Objectives ii) Decision criteria iii) Time iv) Constraints v) Activities vi) Mechanisms Obviously, these dimensions are interlinked and proper management of technology requires a systematic consideration. According to Solomon, Technology Management is the capacity of a firm, a group or society to master management of the factors that condition technical so as to improve its economic, social and cultural environment and wealth. That technology management is important become obvious if one considers both what the economists call the ‗input‘ and the ‗output‘ aspects of technical change. These facts are obvious for all countries. However, technology management is more important for those countries which do not participate directly in the ―input‖ aspects or do so less intensively than the industrialized countries, and are therefore necessarily less well-prepared to adjust to and master the ―output‖ aspects. This is the case today in most developing countries. According to Stephen Millet, the following four general factors are considered important to successful R&D management i) A responsiveness to the needs clients and customers, ii) Regular top-bottom up communication, iii) An awareness that technologies alone not products and iv) Recognition that non- technological have profound impact on R&D.



Dimensions of Technology Management

Objectives  Technological Independence  Self Reliance  International Trade gain  Human Need Satisfaction  Productivity Time  Perspective range (>20)  Long range (10-20YRS)  Medium Range (1-5YRS)  Short range (1- 5 years) Constraints Technological level  Knowledge  Science  Skill  Information Resources  Human  Material  Finance  Energy Late starter Management Capabilities Activities  Monitoring and control  Research & Developmen t  Transfer and Adaptation  Assessment and Planning Mechanisms Awareness measures Education and training R&D Institution Building S&T policies Criteria  Maximize Positive Effects  And Minimize Negative Effects



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Role and Importance of Technology Management

Managers of technological enterprises can usually be found of one of the two views: 1. Those who think that the market should dictate their course of action and 2. Those who believe that their technology will develop a following. The former are the marketing managers who attempt to define market needs while the latter are engineers and technologists with better mousetraps. But, did the marketing people know that the market needed polyester tires, ceramic engines, superconductivity, and personal computers before their existence or feasibility thereof was established? Can a marketing manager make a list of all of the inventions, which he has never heard of? Similarly, can a technologist foresee all the applications (i.e. needs) for nylon or integrated circuits? This writer believes that firms, both large and small, require both perspectives in order to be continuously innovative and profitable. Many firms gain their notoriety as a direct result of them being able to commercialise an innovation ahead of their competitors. Corporate and University spin-offs are usually formed by individuals who have the vision to see commercial opportunities for inventions and ideas. These companies often experience meteoric growth and enjoy excellent profit margins by being leaders in their particular markets. It is at this point, when they are the most profitable, that they should be committing to new product development. Once their original products reach fruition, they forget that it was their ability to bridge the gap between invention and innovation, which caused their success. They begin to focus too heavily on product refinements and improvements and market needs while ignoring new technological developments. Basic research leads to invention, i.e. the demonstration of some hitherto unproven fact. Product development and engineering leads to innovation, i.e. the demonstration of a unique implementation of invention that ultimately results in a commercial success (defined as generating some net positive return on investment). Large companies, such as IBM can afford their own creative "sandboxes" in which basic research is fostered and funded. Technology managers are charged with the task of engaging the firm in the pursuit of new, unknown, and unproven exploration - the modern day equivalent of resource exploration (e.g. oil & mining). Without such explorative efforts, there would never exist the pool of inventions on which the technological entrepreneurs or product managers could draw on to satisfy market driven needs. Smaller companies typically lack the resources required to engage in such "sandboxing" activities. Hence, it is essential that they participate in an indirect manner, e.g. joint ventures, university connections, consortia‘s, etc. to achieve the same end. Even the IBMs, who can make a major commitment to pure research, develop relationships with others so as to avoid the incestual, not-invented-here trap (witness IBM's investments in Intel)



Technology strategy

Too often, companies jump from one system or application to another but never realize the full benefit of their technology. Without a defined strategy, they make poor buying decisions, adopt ineffective tools, and often experience a high level of frustration. Businesses that excel typically establish technology strategies that help them gain a competitive advantage through cost savings, process improvements, faster time to market, and improved quality and service levels. These firms often exceed the expectations of customers, business partners and employees. Evolving from a reactive approach to proactive one doesn't just happen. When developing a sound technology strategy, it's important to ask the right questions: m the technology?



Today’s general managers find technology and innovation increasingly important to their overall management role. As a key resource in nearly all businesses and organizations of the 1990‘s, technology has become pivotal in today‘s competitive environment. Stewardship and leadership of technology through thorough integration in corporate strategy will promote competitive advantage and success.

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Managers must be able to develop, obtain, allocate, and apply this valuable resource effectively. Today‘s managers must also be able to assess and exploit the firm‘s capacity for innovation to facilitate corporate strategy implementation. To accomplish these tasks, managers should develop a set of ―tools‖ to help them achieve their goals in today‘s technology dependent environment.



Key concepts and their relationships

Scientific research is the pursuit of as yet undiscovered knowledge and results in inventions and discoveries whereas technology is the application of new knowledge. Basic scientific research is the generation of/search for new knowledge about our world and results in discoveries. Applied scientific research is geared toward solving a specific technological problem and results in inventions. Inventions and discoveries have no commercial value in and of themselves. Putting inventions and discoveries to practical use results in technology. Technology itself also has no commercial value as it answers the ―can it be done‖ question, not the ―can we do it for profit‖ question. However, technologies combined with other technologies form the foundation for product development. Technology mixed with the commercial world creates technological innovations, new products, which can be exploited for profit. Technological entrepreneurship brings together the technical and commercial worlds and is the foundation for the technological innovation process. Entrepreneurship recognizes and exploits a



commercial use of a product/service/delivery method. Technological entrepreneurship recognizes a potential market for an applied technology, which leads to technological innovation and new product development. Technological entrepreneurship includes activities of product, process, and market development, which result in technological innovations. Figure above depicts the interrelations among key concepts of technology and innovation. Technological entrepreneurship bridges between the technical and commercial worlds melding markets and inventions to develop products, which are technical innovations. Combining these innovations and administrative capabilities, technical entrepreneurship sets the foundation for successful organizational management.



Integrating technology and strategy



Organizational strategy is a result of the organizational learning process and is management’s direction for the firm that is reflected in it’s product market mix, core competencies and values, product market areas, use of resources, and human resource development. Strategy must be backed by the capability to employ it. Strategy sets the roadmap for the way in which the firm will take advantage of it‘s strengths and opportunities while avoiding or minimizing its threats and weaknesses. Organizational strategy is defined not only in management‘s beliefs and vision, but also in its actions. It is not only what is

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professed, but also what is employed that defines a firm‘s strategy. Technology should be an integral part of today’s organizational strategy. The firm‘s products and services reflect its strategic use of technology and technological innovations. Technology can provide a firm with competitive advantage if strategically applied to the product market mix. Figure below depicts one method of mapping strategic use of technology based on specific market products. Each cell represents the degree to which each product incorporates one or more of the firm‘s technologies with each * representing the firm‘s relative strength versus the industry state of the art.



A firm’s competitive and strategic position can be analyzed by a matching of its business and technology portfolios. Figure below depicts the matching of technology and business portfolios. Products that fall within the upper left corner of the business portfolio are high in competitive position and high in industry attractiveness. Those that fall in the upper left corner of the technology portfolio reflect those where the firm has a strong technology position and the technology is deemed highly important. Ideally, a firm‘s products will fall within the same quadrant in both matrices. However, a product could be high in competitive positioning, but the firm has a weak position in the technology in the product (depicted below, product A vs B). Discongruent products reflect a need for further assessment of the firm‘s strategy and strategic effectiveness. Technology plays a part throughout the firm‘s value chain. Firm‘s can maintain a competitive advantage anywhere along the value chain and technological innovation can lead to this competitive advantage. Designing a technological strategy requires that management review each part of the value chain, assessing opportunities for innovation to achieve competitive advantage, and determine sourcing of the innovation.



Assessing innovative capabilities

A firm’s capacity to innovate must be evaluated to identify barriers to innovation and facilitate proactive changes in technological strategy. The innovative capabilities audit is used to assess the potential of existing innovative capabilities and can help the general manager develop a plan for future innovation. The audit should address the firms history of innovation in product/service/delivery areas, the fit between the firm‘s current business strategies and innovative capabilities, and the firm‘s needs for future innovative capability. These audits can be performed at both the strategic business unit and corporate levels. Figures below depict the variables that should be assessed in a capability audit. At the conclusion of the audit, the firm should have a solid understanding of its position with respect to technological leadership, scope of innovativeness, rate of innovativeness, and market entry timing.



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Designing and Implementing a Technology Strategy

An organization's technological capabilities allow them to implement technology strategies that best fit their goals. The experience gained from implementing technology strategy feeds back into the technological capabilities, which then enable firms to improve and build their core competencies to help them maintain their competitive advantage. The exhibit below illustrates this concept. 1. Technological Capability Technological competencies are defined as the capabilities of the firm that enable them to cope with environmental demands. Since new and innovative technological competencies are needed for survival in a highly competitive environment, firms must be careful not to fall into a competence trap. This can happen

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when a company's product and/or strategy is successful and they become comfortable with existing areas of ―expertise". The phrase, ―If it ain‘t broke, don‘t fix it‖ causes firms to not think ―outside of the box‖ to expand core competencies in order to keep up with the growing and aggressive competition. Existing competencies should not prevent innovation and creativity. 2. Technology Strategy a) Competitive Strategy Stance The competitive strategy requires technology to differentiate an organization from its competition. There are four main areas within the competitive strategy: a) Technology Choice. Both core concepts and architecture of a product affect the technology choice. Not only does the product itself determine the technology choice for a firm, but there are also other technical and market factors that determine technology development targets for the future. Firms might decide to target their existing products to help improve some technology aspects or they might find through market research that there is a need for a brandnew product. b) Technology Leadership. Managers need to understand their firm‘s internal structure, core competencies, and the external environment to capture which core competencies best meet the needs of the firm. Becoming technology leaders with the state-of-theart technology is not a good fit for all firms, because not every firm wants to assume that risk or invest the resources needed to become a technology leader. c) Technology Entry Timing. Knowing when to bring technology to market is another key in implementing a technology strategy. There are advantages and disadvantages to being the first to market with a brand-new technology. d) Technology Licensing. Sometimes it is beneficial to bring a new technology to market by partnering with another firm. b) Value Chain Stance Technology is everywhere in the value chain and at all levels. Firms must first develop their internal or core technology before determining the scope of their technology strategy. c) Resource Commitment Stance This explores the depth of a firm‘s technology strategy. Deciding how many resources to dedicate to increasing a firm‘s technological abilities will illuminate how many technical options the firm will have available. d) Management Stance Choices are always up to management in a firm. Management decides which type of technology strategy

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best fits the organizational design and structure of the firm. Deciding whether or not to have a centralized research and development department will impact the success of a technology strategy. 3. Experience through Enactment of Technology Strategy The following figure shows us how internal and external environments, as well as generative and integrative mechanisms, play a role in determining a firm's technology strategy. Experience is achieved through performing (enacting) all aspects of a technology strategy. In this instance, performance does not refer to the usual ROI, or profit margin. Enactment of 5 key tasks occurs: 1. Internal technology sourcing 2. External technology sourcing 3. Deploying technology in product development 4. Deploying technology in process development 5. Using technology in support activities The different aspects of technological evolution have been studied to see how the technology strategy of organizations is rooted in the evolution of their technological capabilities.



Technology gaps & Enterprise needs

There are internal and external, generative and integrative forces, which shape the actual development of an Enterprise technology strategy, as well as the changes in the strategy over time.  Technology Evolution: An Enterprise technical capability, and their dynamics, cannot completely be determined by the technology strategy. Those capabilities are significantly affected by the evolution of broader areas of technology that evolve largely independently.  Industry Context: Industry specific factors such as the industry structure, the appropriability regime, and emergence of industry standards affect the locus of the technology as well as the strategic choices of the firm.  Strategic Action: The Enterprise internal attitude towards developing and implementing a strategy, and towards strategic thinking is shaped by its past and current success or failure. The confidence developed through success has the danger of creating resistance to change the strategy when necessary. The disappointment created by the failures can lead the company to abandon or to outsource the strategic planning activities. It is difficult to ensure that the strategy is not a reflection of the biases and ignorance of the management team.  Organizational Context: The Enterprise administrative culture, merit system, location in the value chain (e.g., supplier or the end-product manufacturer), and organizational structure affect its approaches to strategy and technology. Personal, political, and institutional factors that often heavily influence the process of strategy development can get disconnected from the realities of the marketplace. Implementation of the strategy is particularly vulnerable. Since the formal processes and mechanisms for formulating and funding technology projects usually are separate from the strategy-formulation processes, the resource allocation may not necessarily mirror the strategy. Moreover, technology projects cuts across functional divisions, which are the fundamental building blocks of the organizational structure.



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Chapter-3

Technology Life Cycle

What is innovation?

Innovation is defined as the successful exploitation of new ideas. Ideas may be entirely new to the market or involve the application of existing ideas that are new to the innovating organization or often a combination of both. Innovation involves the creation of new designs, concepts and ways of doing things, their commercial exploitation, and subsequent diffusion through the rest of the economy and society. It is this last – diffusion – phase from which the bulk of the economic benefits flow. Most innovations are incremental – a succession of individually modest improvements to products or services over their life cycle. But a few will be dramatic, creating entirely new industries or markets. Innovation is the implementation of a new or significantly improved idea, good, service, process or practice which is intended to be useful. Scholars who have studied innovation generally differentiate among five main types of innovation: product innovation, process innovation, organizational innovation, marketing innovation and business model innovation. Innovation is an important topic in the study economics, business, sociology, and other social sciences. Since innovation is also considered a major driver of the economy, the factors that lead to innovation are also considered to be critical to policy makers. Other definitions of innovation Joseph Schumpeter defined economic innovation in 1934: 1) The introduction of a new good —that is one with which consumers are not yet familiar—or of a new quality of a good. 2) The introduction of a new method of production, which need by no means be founded upon a discovery scientifically new, and can also exist in a new way of handling a commodity commercially. 3) The opening of a new market, that is a market into which the particular branch of manufacture of the country in question has not previously entered, whether or not this market has existed before. 4) The conquest of a new source of supply of raw materials or half-manufactured goods, again irrespective of whether this source already exists or whether it has first to be created. 5) The carrying out of the new organization of any industry, like the creation of a monopoly position (for example through trustification) or the breaking up of a monopoly position The OECD defines Technological Innovation in the Oslo Manual from 1995: Technological product and process (TPP) innovations comprise implemented technologically new products and processes and significant technological improvements in products and processes. A TPP innovation has been implemented if it has been introduced on the market (product innovation) or used within a production process (process innovation). TPP innovations involve a series of scientific, technological, organisational, financial and commercial activities. The TPP innovating firm is one that has implemented technologically new or significantly technologically improved products or processes during the period under review.



Types of innovation

In business and economics, innovation is often divided into five types:  Product innovation, which involves the introduction of a new good or service that is substantially improved. This might include improvements in functional characteristics, technical abilities, ease of use, or any other dimension  Process innovation involves the implementation of a new or significantly improved production or delivery method.

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  



Marketing innovation is the development of new marketing methods with improvement in product design or packaging, product promotion or pricing. Organizational innovation (also referred as social innovation) involves the creation of new organizations, business practices, ways of running organizations or new organizational behavior. Business Model innovation involves changing the way business is done in terms of capturing value e.g. Compaq vs. Dell



Sources of innovation

Innovation in business is achieved in many ways, with much attention now given to formal research and development for "breakthrough innovations." But innovations may be developed by less formal on-thejob modifications of practice, through exchange and combination of professional experience and by many other routes. The more radical and revolutionary innovations tend to stem from R&D, while more incremental innovations may emerge from practice - but there are many exceptions to each of these trends. Another key source of innovation is user innovation, innovations developed by individuals when existing products do not meet their current needs. User innovators may become entrepreneurs, selling their product, or they may choose to freely reveal their innovations, using methods like open source. In such networks of innovation the creativity of the users or communities of users can further develop



technologies and their use. Whether innovation is mainly supply-pushed (based on new technological possibilities) or demand-led (based on social needs and market requirements) has been a hotly debated topic. Similarly, what exactly drives innovation in organizations and economies remains an open question.



Goals of innovation

Programs of organizational innovation are typically tightly linked to organizational goals and objectives, to the business plan, and to market competitive positioning. For example, one driver for innovation programs in corporations is to achieve growth objectives. As Davila et al (2006) note, "Companies cannot grow through cost reduction and reengineering alone . . . Innovation is the key element in providing aggressive top-line growth, and for increasing bottom-line results" (p.6)

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It is not surprising, therefore, that companies such as General Electric and Procter & Gamble have embraced the management of innovation enthusiastically, with the primary goal of driving growth and, consequently, improving shareholder value. In general, business organisations spend a significant amount of their turnover on innovation i.e. making changes to their established products, processes and services. The amount of investment can vary from as low as a half a percent of turnover for organisations with a low rate of change to anything over twenty percent of turnover for organisations with a high rate of change. The average investment across all types of organizations is four percent. For an organisation with a turnover of say one billion currency units, this represents an investment of forty million units. This budget will typically be spread across various functions including marketing, product design, information systems, manufacturing systems and quality assurance. The investment may vary by industry and by market positioning. One survey across a large number of manufacturing and services organisations found, ranked in decreasing order of popularity that systematic programs of organizational innovation are most frequently driven by: 1. Improved quality 2. Creation of new markets 3. Extension of the product range 4. Reduced labour costs 5. Improved production processes 6. Reduced materials 7. Reduced environmental damage 8. Replacement of products/services 9. Reduced energy consumption 10. Conformance to regulations These goals vary between improvements to products, processes and services and dispel a popular myth that innovation deals mainly with new product development. Most of the goals could apply to any organisation be it a manufacturing facility, marketing firm, hospital or local government.



Adoption of technologies follows an S-shaped curve

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Failure of innovation

Attaining goals must be the ultimate objective of the innovation process. Unfortunately, most innovation fails to meet organisational goals. Figures vary considerably depending on the research. Some research quotes failure rates of fifty percent while other research quotes as high as ninety percent of innovation has no impact on organisational goals. One survey regarding product innovation quotes that out of three thousand ideas for new products, only one becomes a success in the marketplace. Failure is an inevitable part of the innovation process, and most successful organisations factor in an appropriate level of risk. Perhaps it is because all organisations experience failure that many choose not to monitor the level of failure very closely. The impact of failure goes beyond the simple loss of investment. Failure can also lead to loss of morale among employees, an increase in cynicism and even higher resistance to change in the future. Innovations that fail are often potentially ‗good‘ ideas but have been rejected or ‗shelved‘ due to budgetary constraints, lack of skills or poor fit with current goals. Failures should be identified and screened out as early in the process as possible. Early screening avoids unsuitable ideas devouring scarce resources that are needed to progress more beneficial ones. Organizations can learn how to avoid failure when it is openly discussed and debated. The lessons learned from failure often reside longer in the organisational conscientiousness than lessons learned from success. While learning is important, high failure rates throughout the innovation process are wasteful and a threat to the organisation's future. The causes of failure have been widely researched and can vary considerably. Some causes will be external to the organisation and outside its influence of control. Others will be internal and ultimately within the control of the organisation. Internal causes of failure can be divided into causes associated with the cultural infrastructure and causes associated with the innovation process itself. Failure in the cultural infrastructure varies between organisations but the following are common across all organisations at some stage in their life cycle: 1. Poor Leadership 2. Poor Organisation 3. Poor Communication 4. Poor Empowerment 5. Poor Knowledge Management Common causes of failure within the innovation process in most organisations can be distilled into five types: 1. Poor goal definition 2. Poor alignment of actions to goals 3. Poor participation in teams 4. Poor monitoring of results 5. Poor communication and access to information Poor goal definition requires that organisations state explicitly what their goals are in terms understandable to everyone involved in the innovation process. This often involves stating goals in a number of ways. Poor alignment of actions to goals means linking explicit actions such as ideas and projects to specific goals. It also implies effective management of action portfolios. Poor participation in teams refers to the behaviour of individuals and teams. It also refers to the explicit allocation of responsibility to individuals regarding their role in goals and actions and the payment and rewards systems that link individuals to goal attainment. Finally, poor monitoring of results refers to monitoring all goals, actions and teams involved in the innovation process. Innovation can fail if seen as an organisational process whose success stems from a mechanistic approach i.e. 'pull lever obtain result'. While 'driving' change has an emphasis on control, enforcement and structure it is only a partial truth in achieving innovation. Organisational gatekeepers frame the organisational environment that "Enables" innovation; however innovation is "Enacted" - recognised, developed, applied and adopted - through individuals. Individuals are the 'atom' of the organisation close to the minutiae of daily activities. Within individuals gritty appreciation of the small detail combines with a sense of desired organisational objectives to deliver (and innovate for) a product/service offer. From this perspective innovation succeeds from strategic structures that engage the individual to the organisation's benefit. Innovation pivots on intrinsically motivated individuals, within a supportive

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culture, informed by a broad sense of the future. Innovation, implies change, and can be counter to an organisation's orthodoxy. Space for fair hearing of innovative ideas is required to balance the potential autoimmune exclusion that quells an infant innovative culture.



Technology Life Cycle (TLC)

Most new technologies follow a similar technology lifecycle. This is similar to a product life cycle, but applies to an entire technology, or a generation of a technology. There is usually technology hype at the introduction of any new technology, but only after some time has passed can it be judged as mere hype or justified true acclaim. Because of the logistic curve nature of technology adoption, it is difficult to see at in the early stages whether the hype is excessive. You can almost never believe the hype. Similarly, in the later stages, the opposite mistakes can be made relating to the possibilities of technology maturity and market saturation.



Technology adoption typically occurs in an S curve, as modelled in diffusion of innovations theory. This is because customers respond to new products in different ways. Diffusion of innovations theory, pioneered by Everett Rogers, posits that people have different levels of readiness for adopting new innovations and that the characteristics of a product affect overall adoption.



S-Curves vs Product Life Cycles

As a technology matures, additional research expenditures on that technology begin to produce diminishing returns. This is the familiar S-curve which shows significant performance improvements at the early stages of discovery, then declining as the technology improves. Technology managers must be cognisant of this basic law and commit funding to new technologies as existing ones reach the top of the S-curve. They can determine their position by estimating the limits of a technology early and charting their performance improvements against these limits. Some practical ways of identifying that a technology will give way to a newer one is by observing the emergence of new competitors using different technologies, diffident researchers, disharmony among research staff, and a general lack of "new breakthroughs".



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Each new product that eventually results from research and invention, undergoes a "Life Cycle". The Product Life Cycle is a favorite marketing textbook topic. New products typically undergo an introductory stage, during which they produce no net profits, followed by a mature stage at which profits are greatest, and then they go through a declining stage, and reduced profits before they eventually become superceded. Good product management dictates that the firm have several products in its portfolio, each at a different stage in its life cycle. Hence, when the various life cycles are aggregated, the firm will enjoy stable profitability rather than the roller-coaster profit picture often represented by firms with only one or two products under management.



The tie-in between marketing and research is essential. Marketing executives must understand product life cycles and the need to bring new technologies from the research lab to the market. Research executives must understand S-curves and be able to shift to new technologies in a timely fashion.



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Technology life cycle

The span of various technologies can be conveniently identified as consisting of four distinct stages, all of which taken together form the ‗Technology Life Cycle‘. The stages of technology life cycle are innovation, syndication, diffusion, and substitution. 1) Innovation stage: This stage represents the birth of a new product, material or process resulting from R&D activities. In R&D laboratories, new ideas are generated by ‗need pull‘ and ‗knowledge push‘ factors. Depending upon the resource allocation and also the change element, the time taken in the innovation stage as well as in the subsequent stages varies widely. You will recall we had discussed the terms ―innovation‖ and ―invention‖ in the previous Unit. 2) Syndication stage: This stage represents the demonstration (pilot production) and commercialization of a new technology (product material or process) with potential for immediate utilization. Many innovations are shelved in R&D laboratories. Only very small percentages of these are commercialized. Commercialization of research outcome depends on technical as well as non-technical (mostly economic) factors. 3) Diffusion stage: This represents the market penetration of a new technology through acceptance of the innovation by potential users of the technology. But supply and demand side factors jointly influence the rate of diffusion. 4) Substitution stage: This last stage represents the decline in the use and eventual extension of a technology due to replacement by another technology. Many technical and non- technology factors influence the rate of substitution. The time taken in the substitution stage depends on the market dynamics.



Conclusion Successful technology businesses recognize the need for both marketing and technology management. The executive functions of Marketing VP and Technology VP are both needed. Smaller firms may lack the funding, at least initially, to support both corporate functions. They must then, through liaison with others (e.g. Universities), ensure that both requirements are addressed. A failure to do so will certainly render the firm unable to deal with the "primary risk factor".



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Chapter-4

Technological Change

A technological change is a term used in economics to describe a change in the set of feasible production possibilities.Technological change is different to a technical change. Schumpeter distinguished three steps or stages in the process by which a new, superior technology spread through the marketplace. Invention constitutes the first development of a scientifically or technically new product or process. Inventions may be patented, though many are not. Either way, most inventions never actually develop into an innovation, which is accomplished only when the new product or process is commercialized, that is, made available on the market. A firm can innovate without ever inventing, if it identifies a previously existing technical idea that was never commercialized, and brings a product or process based on that idea to market. The invention and innovation stages are carried out primarily in private firms through a process that is broadly characterized as ―research and development‖ (R&D). Finally, a successful innovation gradually comes to be widely used in relevant applications through adoption by firms or individuals, a process labeled diffusion. The cumulative economic or environmental impact of new technology results from all three of these stages, which we refer to collectively as the process of technological change. In this digital economy characterized by a highly dynamic and turbulent business environment, there is a resurgence of recognition of the vital role technology plays in corporate profitability. Increasingly, there is realization among the corporate to integrate technology strategy with the business strategy to prepare themselves against unforeseen technological change. Unfortunately proliferation of technological options, their interconnectivity and the pace of the change have made the job of technology forecasting more difficult than ever before. In such situation, more and more firms are facing threats to their sustainability from unanticipated technological changes. When faced with such technological change, a firm might choose to defend its current technology base, participate in the new technology or to resign (exit) from the business. However, the biggest problem before any corporate perhaps is to determine which option to choose. A technological change arises when the existing body of knowledge, know-how becomes irrelevant with the advent of a new body of knowledge and the firm is stuck with a product or process technology that does not offer the same or better price – value combination. A new technology basically alters the core competencies of the firm o Product/Production competency such as product design, production system, technical skill and knowledge base etc. o Market/Customer competency such as customer base, customer application, channels of distribution and service, customer knowledge, modes of communication etc.

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If the new technology makes the existing competencies of the firm obsolete in any of the above area, the future revenue stream of the firm is threatened and the new technology becomes a threat. The technological change can arise from a product or process innovation through the changes in either logic schema (where the basic operating logic of the technology changes e.g. Vacuum tubes Vs Transistors) or in the phenomenal bases (where the logic of the technology remains same but a different natural phenomenon is utilized e.g. germanium transistors vs. silicon transistors).



Nature of technological Change

It is important to separate the issues of invention, innovation, and diffusion. An invention was defined by Freeman (1974) as an "idea, sketch, or a model for a new or improved device, product, process or system". Innovation involves the commercial exploitation of that invention and may or may not involve the filing of a patent. The diffusion of an innovation is the extent of its adoption by the industry as a whole. Innovation can be classified in terms of its power to bring about significant technological change: o Incremental innovation where each new innovation is a minor variation of existing products or processes. o Radical innovation involves the development of a totally new product or process. o Revolutionary innovations, which have an impact on the wider economic system. This entails widespread cost reductions, significant improvements in performance characteristics, the capacity to produce wide inter-sectoral linkages, and the attainment of social acceptability.



Impact of Technological Change

Technology is defined as the collective body of knowledge and technical capabilities of an organization including its people, equipment and systems. Increasingly technology is being viewed by the firms as a source of sustainable competitive advantage, as one of the most crucial assets that a firm can deploy in the pursuit of its strategic objectives. However, the magnitude and the rate of technological change have been phenomenal due to the knowledge explosion in the recent years - thanks to the Information Age and Digital Economy. In this rapidly changing environment where technology is continuously progressing and markets are continuously shifting, firms no longer operate in a stable, static technological environment. Consequently the margin of error in the strategic decisions involving technology choices is becoming narrower. The new technologies that provide either a superior alternative or a complement to the existing technologies at a better price-value combination, threaten to disrupt the future revenues of the firm thereby undermining its very existence. In this situation a firm‘s ability to make appropriate strategic decision to meet the threat arising from the technology change strongly influences its business competitiveness and survival in the market place. However this is a difficult task as technology itself is evolving at a rapid pace. Moreover the interconnectivity of various technologies and their dispersion across the spectrum of scientific research makes identifying technological changes a daunting yet critical task. The table below summarizes how technology has impacted each of the seven key business drivers of the present age.



Technological Change and its impact on key business drivers

Technological Change Fast & accurate information for Decision support & Automated lines Better process control Seamless integration of intra as well as inter company functions Worldwide communication networks Technology transfers Information sharing & e-Commerce Green technologies Impact on Business Driver Productivity of Labour Quality Responsiveness Globalization Outsourcing Partnering Social & Environmental Responsibility



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Macro-Effects of Technological Change

Whatever be the nature of the change, it results in several adverse impacts such as: o Change in the Power Structure The firm may loose its dominant position in the industry thereby resulting in threats to both value added and value appropriated. Disruptive technological change alters existing industrial structures. IBM lost its leadership position by not subscribing to the open architecture of Intel chips. o Change in the Business Model Emergence of dominant standards and network externalities cause enormous switching costs to late followers that may result in serious damage to a firm‘s market position. o Effect on ability to compete A change in the technology might change the entire industry structure, there by affecting a firm‘s basis of competition. Higher productivity and lesser time to market due to improvement in process technologies can give significant competitive advantage to a rival firm. Moreover shorter product life cycles will result in increased risk of obsolescence of existing product. o Government Regulation Emergence of new environmentally friendly technologies might lead the government to ban the old technology based products in the interest of public safety. This is especially relevant in the areas of food, pharmaceuticals, and automobiles. o Change in the Organisation Structure As the technology brings around a change in the business environment, organizational change often becomes imperative to respond to the changes. The process of technology diffusion can force a modification in the organizations culture. o Dilution of Competitive advantage of developing countries Other micro-effects of technological change o Technology change can raise economies of scale o Enhance product differentiation through proprietary product designs o Technology change can eliminate the need to purchase from a powerful supplier group o Can allow substitute inputs to be used in the firm’s product o Technology change can elevate switching cost of customers o Threat from substitutes can be reduced by improving the performance or reducing the cost of existing products through technology improvements o Can increase the switching cost o Technology change can reduce fixed costs, protecting against price cutting by competitors o Can alter the ability to adjust capacity to demand o Make superior products than the competitor



Responding to Technological Change

To meet the strategic challenges posed by the technological change, a firm normally has four options in front of it. It can: 1) Defend the existing technology base 2) Focus on the niche segment of the market who will not be willing to shift to the new technology 3) Participate in the new technology 4) Resign (Exit) However to decide on which strategic option to adopt, the firm must do a through analysis of the extent of the threat it is facing, the immediacy of the response, and the resource gap in the organization. o Extent of the threat Any change arising due to technology essentially disrupts the current business model and thus disrupts the future revenue stream. The extent of the threat thus essentially measures the risk of loosing the future revenue stream. The factors that must be considered to assess the extent of the extent of threat are o What are the benefits it provides over and above existing product/services? o How relevant are these benefits to the customers (current and future)? o How much share of the future revenue stream the new technology will eat away?

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o Immediacy(Closeness) of the threat The understanding of the immediacy of threat provides the firm an understanding how fast it should react to ward off the threat. Also the assessment of the immediacy would provide the firm a strategic direction whether it should develop the capability in house or it should acquire it from outside. To assess the immediacy of threat, the firm must understand o How fast will the consumers shift to the new technology o The extent of the knowledge gap and the speed of diffusion of knowledge o Resource Gap The firm needs to assess the resources (such as financial, managerial, human resource), skills (such as marketing, technical etc.) and capabilities (such as Distribution, R & D, and Production etc.) required to respond to the threat and those that the firm possess currently. It must assess the gap between that they have and that is required. It will give the firm a sense of direction in terms of which skills or capabilities they must acquire/develop, also how much they are prepared to take the heat.



Mapping the Immediacy of Threat



Strategic Options for a firm under various conditions

1) Defending Strategies: A firm might try to defend its existing technological base by trying to contain the threat, by neutralizing it

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or by trying to make the new technology irrelevant depending on the resources and capabilities, the extent of threat being faced by it and the immediacy of the threat a) Containment: This defending tactics is suitable when the extent of the threat is low, immediacy is high but the firm do not posses enough resources to take the new technology head on. The firm might try to throw some roadblocks to limit the degree to which customers and the competitors adopt the new innovation. Some of the tactics that firms typically use to contain the threat are: o Aggressive PR campaign delegitimizing the new innovation o Lock in the customers by offering them better deals, loyalty programs so that they have less incentive to switch o Step up marketing expenditure so to get higher share of voice and share of mind o Block distribution channel so that new products do not get shelf space o Temporarily lower the price so that customers continue to buy However, it has been seen that, containment is the first reaction of a firm faced with a technological change despite its nature, urgency or extent of the threat. A containment strategy gives the firm some time to gather resources to decide on future course of action. The other reason a firm might adopt a containment strategy is that it does not require to deploy much resource to counter the threat and hence firms find it very useful but inexpensive strategy. The biggest benefit of a containment strategy is that as the challenger needs to spend more time and money to gain ground when faced with a containment policy, which it cannot do unless the technology catches on faster, the initial momentum of the new technology is halted and unless it has higher resources it dies there itself. b) Neutralization: Neutralization is the most aggressive defending policy in which the incumbent firms takes the new technology head-on and quashes it – if necessary. A firm might adopt this strategy when it is faced with a technology that threatens to destroy the business as the technology catches on very quickly, and the firm has enough resources to meet the threat. The tactics normally firms use to neutralize the threat are o Quash the technology through legal action. o Temporarily give away benefits offered by the challenger for free o Invest heavily in R&D to improve their existing products, technologies For example consider the case of recent debate between Cellular Service and Limited Mobility. To neutralize the threat arising from the WLL players, the Cellular operators have been trying several tactics – from legal battle for levying additional entry fee for WLL mobile services to offering freebies, slashing charges etc. c) Annulment Under this defending strategy, a firm tries to make the new technology irrelevant by leapfrogging one revolution with another technology better suited to the firms strengths or sidestepping the new technology altogether. Leapfrogging enables the incumbent to regain the first-mover advantage, and also wards off the next generation of challengers. Under the sidestepping tactics the firm basically flanks the threat posed by the new technology by adopting another route to attack. As annulment strategy is an expensive option and takes time to implement, a firm follows this only when the threat of the new technology is very high – it is unstoppable; but the immediacy of the threat is comparatively lower and the firm has enough resources to deploy to take on the new technology. Since annulment strategy carries with it the danger of cannibalization, it is a high-risk strategy. 2) Participating Strategies: Faced with a technological change a firm might decide to participate in the new technology provided it has enough resources to invest in the new technology. But depending on the extent and immediacy of the threat it might try to shape the new technology so that it becomes a complement to the existing or it might try to absorb the technology without destroying the existing business model. a) Shaping Under shaping strategy the firm tries to shape it in such a way that it the new technology complements the existing base rather than superseding it. It might try to alter the new value proposition or the business model so that the new technology no longer threatens the old one. Instead of a fight to finish game, the firms get engaged in a peaceful coexistence. A firm might opt for

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several tactics to shape the new technology such as o Join forces with the competitors to develop the technology together o Finance potentially revolutionary technologies through venture capital o Act as suppliers to the new technology Consider for example the case of Hydrogen Fuel Cell based vehicles. Understanding that the technology could be a threat in future to their business, top automobile manufacturers such as Nissan, Honda, GM, Daimler Chrysler, BMW are trying to shape up the technology by joining hands to form associations to develop cars running on fuel cell technology. b) Absorbing If the firm has enough resources, the extent as well as the immediacy of the threat is low, the firm might decide to absorb the new technology by bringing in new competencies or technologies inside the corporation after having modified them so that they neither abandon its existing products or business model nor destroy existing competencies and strengths. Thus, following absorption strategy allows the firm to avoid the risks of being a first mover or a mere imitator. The tactics that firms normally employ to absorb the new technology are o Developing the new skills required within the firm o Making mergers and acquisitions by creating polarized industry blocs to pave the way for acquisition For example, when Voltas limited faced competition in its industrial cooling segment from Thermax Limited based on a new cooling technology, it tied up with Hitachi to acquire the technology and developed its own range of machines based on the new technology. But it offered the new technology based products only where it found that the existing electrical chillers are not suitable. When a firm decides to participate in the new technology it also needs to make four important decisions regarding o Time of entry: whether the firm will be an early adopter of the technology or a late entrant o Magnitude of commitment: When a firm decides to participate in the new technology it might decide on the extent of commitment - whether it will be a token effort without major resource deployment or the firm will go whole hog with immediate and major investments. The magnitude of the commitment however might change over time as the industry evolves. o Degree of organizational separation: The firm needs to decide whether the new technology venture would be closely linked with the established structure or separate, independent organization would be formed. o Competitive strategy for the new business: Lastly, the firm needs to decide whether it would be following the traditional ways of competing or it will adopt a new way suited for the new technology. 3) Exit: It is often argued that substitution of the old technology by a new technology progresses until the established technology is destroyed for a given market. However, established technologies are not necessarily completely destroyed and they may survive in niche markets. For a given technology there may be a number of distinct types of use or there may be several ranges of incrementally different uses. So, while the new technology may replace a particular use or a particular range of use, still it may be possible to find a profitable niche use of the existing technology. When the extent of the threat and immediacy is high but the firm does not have enough resources to invest either to defend its existing technology base or to participate in the new technology, it should consider focusing on those customer who would not be willing to switch to the new technology or exiting from the business. Selecting a focus strategy will depend on the ability of the firm to determine a distinct use of the existing technology which the new technology would not be able to replace and then delivering a superior value to these small segments of customers. However if it is impossible to find any such segment within the context of the existing business, the firm should be prepared for exiting the current line of business and should look out for other opportunities to divert the resources generated by harvesting the existing business.



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Chapter-5

Production Function and Technological Change

Production is simply the conversion of inputs into outputs. It is an economic process that uses resources to create a commodity that is suitable for exchange. This can include manufacturing, storing, shipping, and packaging. Some economists define production broadly as all economic activity other than consumption. They see every commercial activity other than the final purchase as some form of production.



Factors of production

The inputs or resources used in the production process are called factors by economists. The numerous of possible inputs are usually grouped into four or five categories. These factors are:  Raw materials (natural capital)  Labour services (human capital)  Capital goods  Land  Technology Sometimes a fifth category is added, entrepreneurial and management skills, a subcategory of labour services. Capital goods are those goods that have previously undergone a production process.



Production function

In microeconomics, a production function expresses the relationship between an organization's inputs and its outputs. It indicates, in mathematical or graphical form, what outputs can be obtained from various amounts and combinations of factor inputs. In particular it shows the maximum possible amount of output that can be produced per unit of time with all combinations of factor inputs, given current factor endowments and the state of available technology. Unique production functions can be constructed for every production technology. Alternatively, a production function can be defined as the specification of the minimum input requirements needed to produce designated quantities of output, given available technology. This is just a reformulation of the definition above. The production function as an equation In its most general mathematical form, a production function is expressed as: Q = f(X1,X2,X3,...,Xn) where: Q = quantity of output X1,X2,X3,...,Xn = factor inputs (such as capital, labour, raw materials, land, technology, or management)



Isoquants

There are many ways of producing a given level of output. You can use a lot of labour with a minimal amount of capital, or you could invest heavily in capital equipment that requires a minimal amount of labour to operate, or any combination in between. For most goods, there are more than just two inputs. For example in agriculture, the amount of land, water, and fertilizer can all be varied to produce different amounts of a crop. An isoquant, in the two input case, is a curve that shows all the ways of combining two inputs so as to produce a given level of output. In the three input case it will be a surface. Iso is Latin for equal and quant is short for quantity. Movement along an isoquant depicts a constant rate of output,

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but a changing input ratio. A unique isoquant can be constructed for every level of output, and a family of isoquants can be created to represent various output levels. Isoquants further from the origin represent greater amounts of output. Isoquants are usually considered to be everywhere dense, meaning an infinite number of them could be plotted in any two input space. A typical isoquant is illustrated in the diagram to the right. At point A in the diagram Ka unit of capital is combined with La units of labour to produce 100 units of output. It is downward sloping, convex to the origin, and nonintersecting (additional isoquants, not shown, would be drawn parallel to this one). A complete isoquant is actually a closed curve, but only the ―down sloping to the right‖ portion makes economic sense. The upward sloping parts of isoquants, for example, indicate that that level of output could be produced by less of both inputs so this section is of little interest to decision makers. The economic section of the isoquants is defined by a pair of lines called ridgelines. The ―downward to the right‖ slope of the economic region of an isoquant is due to the possibility of substituting one input for another in the production process while keeping the level of output constant.



The marginal substitution



rate



of



technical



Isoquants are typically convex to the origin reflecting the fact that the two factors are substitutable for each other at varying rates. This rate of substitutability is called the ―marginal rate of technical substitution‖ (MRTS) or occasionally the ―marginal rate of substitution in production‖. It measures the reduction in one input per unit increase in the other input that is just sufficient to maintain a constant level of production. For example, the marginal rate of substitution of labour for capital gives the amount of capital that can be replaced by one unit of labour while keeping output unchanged. To move from point A to point B in the diagram, the amount of capital is reduced from Ka to Kb while the amount of labour is increased only from La to Lb. To move from point C to point D, the amount of capital is reduced from Kc to Kd while the amount of labour is increased from La to Lb. The marginal rate of technical substitution of labour for capital is equivalent to the absolute slope of the isoquant at that point (change in capital divided by change in labour). It is equal to 0 where the isoquant becomes horizontal, and equal to infinity where it becomes vertical. The opposite is true when going in the other direction (from D to C to B to A). In this case we are looking at the marginal rate of technical substitution capital for labour (which is the reciprocal of the marginal rate of technical substitution labour for capital).

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It can also be shown that the marginal rate of substitution labour for capital, is equal to the marginal physical product of labour divided by the marginal physical product of capital. In the unusual case of two inputs that are perfect substitutes for each other in production, the isoquant would be linear (linear, a straight line, with a function y = a - bx). If, on the other hand, there is only one production process available, factor proportions would be fixed, and these zero-substitutability isoquants would be shown as horizontal or vertical lines.



Properties of Isoquants

Units of capital A 2 B 1 0.5 C D 1 Q1 Units of Labour Q2 Q3



The following diagram shows a set of isoquants (known as an isoquant map), which describes the firm‘s production function (i.e. its technology). The diagram illustrates the key properties of isoquants: 1. Negatively-sloped. Technological efficiency implies that an isoquant must slope downwards from left to right - using more of one input to produce the same level of output must imply using less of the other input.



2. Convex to the origin. The MRTS is not constant, it diminishes as the firm moves along an isoquant: e.g. as the firm uses more and more units of one input (e.g. labour) and less of the other (e.g. capital), the amount of the other input that can be foregone diminishes. For example in the diagram, when the firm has a relatively large amount of capital to labour (point A) then if it uses one more unit of labour, it can afford to use two units less of capital and still produce the same output. Further down the isoquant, we see that as the firm continues to substitute more labour for less capital, the amount of capital that can be foregone decreases; e.g. the second example in the diagram shows that when the firm has a relatively small amount of capital to labour (point C) then using one more unit of labour to produce the same output implies giving up only 0.5 units of capital. Why does the MRTS diminish? To answer this question properly, we need to invoke the concept of marginal product, which is described in detail later in this topic. For the moment, we can argue that when, as at point A, the firm has a relatively large amount of capital to labour it can afford to give up a lot of capital in return for more labour and still maintain its output level. At point D, the situation is reversed. Here labour is the relatively more plentiful input - hence the firm could afford to give up a lot of labour in return for a bit more capital. 3. The further the isoquant from the origin, the higher the level of output. This is obviously the case as using more of both inputs must increase output. Hence, Q3 > Q2 > Q1.



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Technology and Factor Intensity

Factor Intensity is indicated by the capital to labour Ratio (K/L). At points above the Equal intensity line, capital is greater than labour so K/L >1. The technology is capital intensive. At points below the line, capital is less than labour so K/L. Atkinson, Robert D. The Past and Future of America’s Economy: Long Waves of Innovation that Power Cycles of Growth. Northampton, MA: Edward Elgar, 2004. Atkinson, Robert D. ―RFID: There’s Nothing To Fear Except Fear Itself.‖ Information Technology Productivity.‖ Journal of Information Systems (22 Sep. 2002). Barlevy, Gadi. ―The Costs of Business Cycles and the Benefits of Stabilization.‖ Federal Reserve Bank of Chicago. Economic Perspectives Q1 (2005): 32-49. IGNOU – Study Material on Technology & R&D

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Winter 2003 TECHNOLOGY AND R & D MANAGEMENT Paper VII Time: Three Hours] 1. Explain role of technology in present business scenario. [Full Marks: 80



2. Elaborate technology development process.



3. What are the different dimensions of Technology management? Highlight the key points with examples.



4. Explain the technology life cycle. How does marketing strategy differ at different stages within the cycle?



5. ―Some technologies are pushed while some are pulled‖. Discuss with suitable examples.



6. Discuss impact of technological change on Indian business.



7. Discuss various types of technology transfer agreements.



8. Explain the process of technology assessment and evaluation.



9. ―Technology forecasting can never be accurate‖ – Evaluate. 10. Write notes on (any two): a. b. c. d. Technology policy Technology driver Product development Technology financing.



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Winter 2004 TECHNOLOGY AND R & D MANAGEMENT Paper VII Time: Three Hours] [Full Marks: 80 1. What are the various types of Technology Transfer Methods? State the Needs and Modes of Technology Transfer. 2. State and explain the deviations observed in actual transfer of Technology. What are the various Technical and Economic problems experienced in process of Technology Transfer? 3. What are the main issues related to development of Technology considering: a) Market related factors, b) Technology related factors, c) Regulatory framework 4. What is the importance of Training and development of human resources? State the steps, benefits, needs and implications of Training and development of Human resource for management of Technology. 5. Financial considerations affect all Technology decisions – Comment. What are the Technology financing issues? Explain in detail. 6. What do you understand by Technology strategy in collaborative mode? Give reasons of collaborative arrangements in domains of Technology strategy. 7. Explain various methods used by firms in acquiring Technology. Why timing of Technology acquisition is important? What do you understand by Technology chains and Trajectories? 8. What are the Philosophies of research and development? What are the main reasons for centralized research and development? State the problems associated with centralized R and D. 9. Technology forecast encompasses not only technological innovations but also the pace and extent of diffusion and penetration of technologies and their implications- Comment. Also explain various technology Forecasting techniques. 10. Write notes on (any two) :a) Intellectual Capital and Property b) I.T. Revolution c) TAAS d) PRICING of Technology.

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Summer 2005

TECHNOLOGY AND R & D MANAGEMENT Paper VII Time: Three Hours] [Full Marks: 80 1. ―Product development progresses along the Technology life cycle‖ Comment with suitable example.



2.



What do you understand by the term ‗Dimensions of Technology? What may be



the right approach for a manager to achieve success in Technological environment?



3. 4. 5.



What is Technology Transfer? Explain various models of technology transfer. Explain methods of Technology forecasting and pitfalls thereof ―Technology is manifested through a product‖, Elaborate with suitable



examples. 6. ―For the growth of the contemporary business house, role played by R and D is



vital‖, Discuss with suitable examples. 7. ―In the era of demand for better, faster and cheaper products innovation is the



key‖, explain. 8. 9. Write a detail note on ‗Technology promotional activities‘. Discuss management of technology absorption in an organization.



10.



Write notes on (any two) :a) b) c) d) Technology Monitoring. Technological linkages. Contributions of science and technology in economic development. Role of Manager as a Technology driver.



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Winter 2005 TECHNOLOGY AND R & D MANAGEMENT Paper VII Time: Three Hours] N. B.:-1) Attempt any five questions 2) All questions carry equal marks. 1. What are the characteristics of Technology? Detail out the competitive consequences of technological change. 2. Explain Dynamics of Diffusion? What factors drive the process of Diffusion? 3. What do you understand by Technology life cycle? Discuss various approaches to Technology development. 4. Explain various Technology surveillance categories. Detail out various Technologicalforecasting methods. 5. What do you understand by Acquisition of Technology? List out and explain the choice of various acquisition methods. 6. Define Technology strategy. What are the key principles underlying Technology strategy? Also explain types of Technology strategy giving its appropriate tenses in single Industry and diversified firms. 7. What are the fundamental challenges in financing technology? Explain various sources of financing; also explain the criteria for financial evaluation. 8. What are the legal aspects of Technology transfer? State various requirements for a successful Technology logy Transfer 9. Comment upon Globalization of Research and development. Explain various reasons to invest in Global Research and development. 10. Write notes on (any two): A) Technology Transfer modes B) TAAS C) Macro effects of Technological change D) Technology environment. [Full Marks: 80



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Winter 06



TECHNOLOGY AND R & D MANAGEMENT Paper VII

1. What is innovation? Discuss various Sources and Goals of Innovation? 2. Explain the concept of ‗Technology Strategy ‗what are the key evolutionary forces that shape Technology Strategy? 3. Discuss strategic challenges and option faced by a firm due to technological change with reference to any one India Firm.



4. What is Scenario Analysis? Explain Scenario Analysis process, its strength and weakness in details. 5. ―Without diffusion, an innovation has no economic impact‖ – Comment. Enlist key factors responsible for Market failures of technology Diffusion process. 6. What drives Technology Transfer? Discuss various phases in technology transfer? 7. What are the steps involved in developing a technology plan? 8. What is Technology Assessment? Explain the process and framework for technology evaluation? 9. Discuss the Role played by R and D in strategy formulation and Implementation for a firm Draw a schematic overviews of R and D organization structures?



10. Write notes no any two: a) Technology Generation, b) Pricing of Technology, c) Production function and Technological change b) Import of Technology in India.



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