MI0031-Technology Management

Set I
1) What is Technology Management? What are the role & Importance of Technology Management? What is appropriate & Disrupted Technology? How Technology Management is being inherited by India?

ANS Technology is a term which is widely and loosely used. On TV, when faced with a seemingly insurmountable problem, the Bionic Man simply said, We have the technology! and everyone was reassured that everything was going to be alright. Since then any mention of high technology or a technological breakthrough in company meetings would be sufficient to provoke knowing and thoughtful nods among those present and effectively close down informed discussion. Everyone knows that technology is somehow a good thing rather like having a reputation for being warmhearted and friendly but most people have little idea as to how to develop it or how to capitalize on it when they have it. Few people in a company will be indifferent to the issue of technology but many are technologically illiterate and hence will be scared of it. Some will seek to avoid facing up either the implications of technology or its analysis at least until the grey mist suddenly solidifies and comes crashing around their ears in the form of a whole range of their products which are suddenly obsolete!! The term technology has been derived from two Greek words: techne (the skill or craft needed to make something) and logos (discussion or knowledge of something). Therefore, 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, documents, processes and skills and as such it conveys different meanings to different specialists under different contexts.

Technology is man-made. It is a means to enhance the physical and mental capability of human beings; it is also an instrument to transform natural resources into useful goods; a tool for conditioning the environment; it is a resource for creating more wealth; a factor affecting development. It is also a commodity which is bought and sold. Innumerable technological developments have taken place in society during the last two centuries and it is difficult, if not impossible, to enumerate all of them. However some significant technological developments in selected areas are presented below: Transistors and Computers They led to so many revolutionary developments in electronics. Air conditioning and refrigeration increased work productivity and variety in diet. Farm tractors and rural electrification bought the benefits of city life to the farm and increased farm productivity. Robotics increased efficiency in manufacturing. Space exploration Sputnik, Mir, Neil Armstrong on the moon, the Hubble Space Telescope, the space shuttle, long range craft exploring our planetary system and sending back data. Nuclear energy The promise of unlimited energy damped by environmental concerns. Managing technology implies use of new technology to gain competitive advantages. It is not an easy problem to manage, partly because of the differing cultures in an organization. Technology is often considered to be the domain of the scientific and engineering personnel of an organization. However,

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successful business application of technology calls for strategic decisions about technology by personnel in other functional areas including production, marketing, sales, finance, and so on. The main issues in managing technological innovation have been organized under the following broad topics: 1) Innovation 2) New ventures 3) Corporate research, and 4) R&D infrastructure Innovation is the most general concept covering the process from the invention of technical knowledge to the commercialization of products and processes based on that knowledge. Technology as a problem for countries: Technology is a problem at the national level by virtue of its major role as a determinant of a countrys economic growth and competitiveness. Economists have attempted to calculate precisely what proportion of historical economic growth has been caused by technological improvements, as opposed to the amount which is due to investment, population increase, trading patterns and other factors. Estimates vary, but there appears to be a consensus that technological change is responsible for a large percentage of economic growth. For example, one study calculated its contribution for several countries as follows: Germany 50 per cent; USA 47 per cent; Japan 44 per cent; Canada 30 per cent; and UK 25 per cent. Technology and long-term cycles: Some economists also argue that technology affects the long-term cycles of growth and recessions in the world economy, which span fifty to sixty years. Mensch found that clusters of new technological applications precede and may account for the upswings in these cycles. As the peak of the cycle is reached and a downturn begins, the economys physical and technological infrastructure is committed to mature technologies in which there are few opportunities for further improvements, and there is little incentive to apply new technologies at that point. As the trough of the cycle gives way to the start of an upswing, firms must reinvest in capital equipment, which is based on new technologies. Technology and comparative advantage: A further indication of the importance of technology at the national level is the explanation that nations will export in industries where they not only have a comparative advantage but also where their firms have a technological lead. For example, the Korean shipbuilding industry became an international leader by expanding the size of its shipyards, adopting new building techniques that increased productivity and developing the technical capacity to produce more sophisticated vessels. A combination of superior organization, skills and technology secured their competitive leadership, not simply more abundant or cheaper resources. Table 1.1 presents a list of emerging technologies. Emerging technologies are new and potentially disruptive technologies which are considered by some to be critical to humanitys future. A disruptive technology supersedes or marginalizes an existing dominant technology or status quo product in the market. Only new and potentially disruptive technologies should be included in the list. e.g., information technology is an example of a technology which has already proven disruptive, whereas artificial intelligence is a subset information technology with the potential of becoming disruptive in its own right. Emerging Technologies potentially Most important applications

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technology Artificial intelligence Biotechnology Nanomaterials Nanorobotics Scramjet Wireless communication

made obsolete Human brain Evolution Steel, Aluminium Immune system Jet engines, Rockets Wired communication Creation of intelligent devices, which could replace humans for a number of tasks. Creation of species, modification of species to be more fit for a purpose. Stronger and lighter materials Help the body to heal quickly. Very fast air travel Ensures connectivity everywhere.

Table 1.1: Emerging technologies and their applications (Source "http://en.wikipedia.org/wiki/List of emerging_technologies") Technology is generally a combination of hardware and software with relative proportions varying from one extreme to the other. Hardware is any physical product, component or means, while software is the know-how, technique or procedure. Hardware technology again can be of two types, namely, the end-use product type such as automobiles, computers, televisions, and the production tool type such as instruments, equipment and machinery. Software technology can also be considered as being of two types, namely, the know-how type technology such as processes, techniques, methods, and the know-why type technology such as knowledge, skills and experience. Technology has been viewed differently by different people. Some view technology as a source of wealth, well-being, and above all, as an instrument of power to dominate nature and societies. Others view technology as something that has enslaved human beings and destroyed jobs, environment and social values. While there is a considerable concern that the use and abuse of technology is leading our societies towards disaster, there is also considerable agreement that further development of human society is possible only through the application of technology. If we can master its use, technology can be the key to a prosperous society for all human beings including the poorest of the poor. Most of the poor countries, in fact, are rich in natural resources. However, they have their basic problems: (i) They have a relatively large population base, which is increasing very rapidly; (ii) Their technological base is very small and ineffective; and (iii) their natural resources base is being depleted due to inefficient use and indiscriminate export. To acquire and master the use of technology for development, it is essential to understand the basic concepts of technology and the process of effective technology management. The fact that we now live in a technological world can be seen very easily by observing the ways and means of satisfying human needs in various societies. There are many ways of classifying human needs. Table 1.2 indicates the implications of technological applications (positive effects and negative effects) with respect to various human need factors. Various human need factors Positive effects Air Direct and indirect effects of Technology Negative effects Control of temperature, humidity, impurities and Pollution, destruction of quantity natural cycles, and equilibrium Increasing supply source (ground, sea); control Pollution, destruction of of supply, temperature and impurity marine life; sinking of cities; frequent flooding Improved agricultural productivity; control of Chemical contaminations food quality, variety and supply and diseases; destruction of wildlife, forests, and fishing

Water

Food

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Shelter

Warfare

Clothing

Health

Communi-cation

Transpor-tation Education Work

Institution

Information

Energy

Freedom

grounds Artificial surroundings and anti-social living, destruction of the beauty of Nature Accumulation of means of warfare and the menace of large-scale destruction of life; risk of bio-weapons and nuclear war Efficient production of high quality clothing and Exploitations of nonapparel renewable resources and consumer appeal Reduction in mortality, increase in life Population explosion; break expectancy; controlled birth, better medical care in family structure; drug abuses; side effects of medications Increased contact; reduced need for physical Culture shock; co-ordination movement; improved audio-video transmission of sabotage by disruptive forces; raising false aspirations Improved mobility of people and goods through Pollution, noise, congestion, water, air, and land accidents and deaths Better means for storing and dissemination of Brain-washing through mass knowledge media, destructive education Much specialization and automation possible; Tension between blue-collar increased women employment and white-collar workers, increased inequality, strikes Creation of systematized, efficient and highly Depersonalization of human productive large complex organizations; being in the quest for exploitation of natural resources; enhanced efficiency and productivity; human power depletion of energy and other natural resources; innumerable industrial wastes. Tremendous improvement in processing, Privacy and security storing and disseminating of voluminous concerns; crime and misuse information of information power Development of alternative sources of energy Threat of nuclear plant fossil, solar and nuclear accidents; depletion of energy resources Freedom from one set of constraints (Physical Creation of new set of stresses) constraints (Psychological stresses) Improved living quarters and materials of construction; better utility services and land uses Development of civilian technologies as byproducts of war technologies (space, nuclear, remote-controlled)

The development of Science and Technology (S&T) has been receiving continuing attention of the government at the highest level in India. However, this development has been based more on science than technology. On the industrial scene, the Indian industry accounting for almost one-third of total production, has been generally operating under controlled and regulated economy, in other words, assured markets. The industry did not generally realize the real need for international competitiveness in most of the sectors. It, therefore, did not give adequate attention and also did not make adequate investments in technology. The technology management at enterprise level in India has therefore been practically lacking except in a few cases. There have, however, been several instances where

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Indian companies have been able to develop and produce products for internationally competitive markets. Punjab Tractors, Tata Automobiles, Amul Food, certain drugs and chemicals produced by some firms, are some examples where Indian companies have excelled. Similarly, some of the R&D institutions have developed and commercialized technologies in areas such as drugs and Pharmaceuticals, chemicals, food technology, computer software etc. The Indian industrial production has been substantially based on imported technologies, accompanied by import substitution efforts through indigenous sources. It is recognized that a large number of industrial products today are based on obsolete technologies which are not cost-effective and consume lot of energy. Further, they are not friendly to the environment, and their quality is not of desired level. Since Indian industry has largely enjoyed monopolistic markets, their interactions with S&T based institutions, R&D laboratories, and academic institutions have been rather limited, and their R&D expenditures have also been much less than the desired levels (when compared to investments in R&D by industry in developed or industrially advanced countries). In fact, there appears to be a technology paradox in India as far as S&T is concerned. On the one hand, we have developed capabilities of high order in hi-tech areas such as space, atomic energy, defence and computer software; on the other hand, our manufacturing capabilities are limited to products ranging from needles or paper pins to electronic products, the quality levels are low and prices are not competitive. We have imported technologies for almost everything that we use. With the announcement of the New Industrial Policy and other fiscal measures by the Government in July 1991, the emphasis was more on international competitiveness, quality, efficiency and exports. Foreign investments and technologies are being encouraged. These policies have appreciably changed the operating environment for the Indian industry and would now call for well laid down technology policy at enterprise level. It is expected that companies will now pay more attention to technology management in order to remain competitive. Small scale sector contributes substantially to the total industrial production and exports of the country, but often does not have adequate appreciation for technology issues and investments in R&D. The rate of sickness is also higher in this sector. The new policy envisages a variety of measures to support this sector, including the technology related support. It must be stressed that technology management is also important for small enterprises.

2. Discuss various Technology Acquisition alternatives. List the important points to be kept in mind while managing an acquisition of technology. Technology Acquisition Alternatives: 1. Develop Technology in-house The company has to estimate the financial costs of the required R&D and its opportunity cost of that choice. Its impact on the direction of, and the commitment to, other research projects is also relevant. In addition to this, the company has to assess the suitability of its staff and equipment for the new project. Among the risks, it has to face are blocking patents. However, the developed technology can be customized to its precise requirements. 2. Buy the firm that has the Technology The investment here could be substantial and great care is needed in the evaluation of the prospective acquisition. Also, it is important that following the purchase, that the operations can be effectively integrated and that there is no undue loss of key staff. 3. Enter into joint ventures The costs are shared but so are the benefits of the new technology. Where the risks are high and the costs heavy, membership of a research consortium becomes a more attractive option. There is also the co-development of new products or processes, such as between a key supplier and a major customer.

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4. Enter into research contract R&D contracts can be placed with research associations, universities or consultants. The company has to consider the costs and the nature of control of the project. There is the risk of know-how loss. 5. Obtain license for use of Technology This is essentially the purchase of access to proprietary technology. It can be anything from the right to use a particular patent to a complete package, which includes know-how agreements, commissioning assistance for new plant and processes and the provision of updated designs and other technical information. 6. Education and training Soft technologies with a strong management dimension e.g. JIT, Quality circles, or Kaizen can be acquired through training programmes. However, the underlying experience, which makes these techniques more effective, is often achieved through personal contacts between companies. The following are important points to be kept in mind while managing an acquisition of technology: 1. The role and management of technology within the company needs to be assessed, especially its capability of managing the transfer activity. 2. The allocation of appropriate staff to the transfer and application of the technology. The project manager must be at senior level while his colleagues need to have engineering application and change management skills. 3. The corporate objectives, capability and the technology transfer track record of the prospective transferor need to be considered. Effective technology acquisition is often based on a longer-term relationship. 4. Clear technical and contract specifications are essential. Because of the nature of the technology and its integration in intellectual property, the transfer constituents vary in type and character. Where the transfer is from a different culture, special attention has to be given to detail and the meaning of language. 5. Contract negotiations can be onerous. They require diplomatic skills and careful record-keeping. 6. Because of the nature of its acquisition, transferred process technology needs to be handled with even more care than indigenous technological change. It is important that all affected company staff appreciate the nature and reasons for the acquisition. 2. What are the ten tenets? Discuss. With the help of examples, show how we have become /are becoming servants of technology. Ten Basic Tenets for the Management of Technology (MOT) A tenet is a principle based on observation, intuition, experience, and in some cases, empirical analysis. Ten tenets, proposed in available literature, are presented below as guiding principles for an enterprise to operate within a technology cycle (TC) framework. David Sumanth in his work (1988) proposed a total systems approach to technology management (TSTM) what he called the technology cycle. He contended that the management of technology in enterprises is not just a one-shot deal, but a continuous process, involving five distinctly different phases of technology, namely, awareness (of marketable inventions), acquisition (by self-generation or transfer), adaptation (by minor modifications of acquired technology for specific needs), advancement (innovation involving major modifications of acquired technology), and abandonment (of obsolete technology). The tenets recognize that shortterm treatments of any issue in general, and technology management in particular, are at best suboptimizations, and so, will not lead to more long- Lasting solutions in adapting and advancing technology. Let us take some time now to discuss these principles in detail. 1. Value diversification is a poor substitute for MOT

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Value diversification refers to the improvement of stockholders' investments in a company through quick-fix solutions on paper, such as mergers, acquisitions, and other stock-enhancing strategies. Unfortunately, this traditional approach to value enhancement results in mostly short-term gains and long-term pains. Every company ought to identify core technologies and core competencies, and then hone them to get the most out of those for innovating products and/or services. When IBM acquired ROLM Corporation many years ago, IBM was trying to complement its core technologies in mainframe computers and personal computers with the core technology of ROLM, communication systems. Unfortunately, this did not work out very well, and IBM eventually sold ROLM. In the early 1980s, McGraw-Hill, whose core technologies are in publishing, books, journals, and related products, went into the personal computer business with Odyssey with a totally different core technology that didn't work, either.

2. Manufacturability must keep pace with inventiveness and marketability. In industries, in general, and manufacturing companies in particular, people in manufacturing functions often find themselves coping with increasingly aggressive marketing strategies and design strategies. Manufacturing in the United States is being troubled by intense competition from the Pacific Rim and European trading partners, who are developing new and better technologies and techniques to increase their advantage in product design and manufacturing process (Gold, 1994). Yet, in today's globally competitive marketplace, it is not only a necessity for manufacturability to be in step with marketing and design strategies but also a luxury, serving as an important weapon to chip away the market share of the competition. 3. Quality and total productivity are inseparable concepts in managing technology. In the 1970s, here in the United States, productivity was of major concern, particularly after the 1973 Oil Embargo, and the ensuing Japanese "automobile attack." In the 1980s, after the famous NBC documentary, "If Japan Can, Why Can't We?" emphasis on quality reemerged with great ferocity and intensity. The Total Quality Management (TQM) movement made quality a common prerequisite for ensuring competitiveness, even in the domestic markets. With the onset of the information superhighways in the late 1980s, and the rapidly changing global communication technology panorama, time has become a third crucial strategic variable in a company's drive to be competitive. Quality and total productivity are like two sides of the same coin or two rails of the same track. Companies that have excellent quality and competitive prices still cannot do well unless they can bring products of highest value to the marketplace in the least time possible. Information technologies have made it possible today to order products 24 hours a day from the luxury of one's home through the Home Shopping Network (HSN) and others, where the customer expects a rapid response rate. In fact, Thurow (1992) predicts that in the twenty-first century there will be high-tech and low-tech final products, but almost every product in every industry-from fast food to textiles-will be produced with high-tech processes. 4. It is management's responsibility to bring about technological change and job security for long-term competitiveness. Often, technological improvements have been associated with such downsizing. Unfortunately, this is a poor business strategy because it under-estimates the employees' ability to manage not only existing technologies that their company has but also their creative capabilities to create and perfect new ones. Employees must feel that they have job security, particularly when they are responsible for suggesting and implementing new technologies. They feel betrayed after they spend hours of hard work designing a technologically advanced environment for greater competitiveness, only to find themselves victims of their own making. This need not be the case. Companies often spend millions of dollars trying to mitigate the negative effects of low morale, job dissatisfaction, and consequent low productivity, following a layoff or cost-cutting measure, right after a major technological change. 5. Technology must be the "servant," not the "master"; the "master" is still the human being.

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Until recently, we used to be the masters of technology, our servant. We used to drive technology, but today we have become technology's servant, and technology is driving us. We believe that we have crossed a "technology threshold," whereby our response to technology has become one of catching up. Many companies are unable to cope with the dramatic changes taking place in the very nature of technologies. This, in turn, puts a company in a reactive posture, rather than a proactive one. Companies which are learning the art of managing new technologies have a better chance at being a technology master instead of a technology servant. The chaos that companies face today in responding to "rapid technologies" can be harnessed as a positive strategy to create opportunities for new products and/or services. Cable companies will soon be in the computer business; and computer companies, in the telecommunication business. It is impossible to even conceive the extent of the technological integration revolution we will be facing even before we enter the twenty-first century. Our wristwatches might become microcomputer devices, working as remote-control units and information retrieval systems. We might see a series of technology thresholds bombarding us in the years to come, and every time we cross one of them, companies have an opportunity to convert technological chaos into economic opportunities. 6. The consequences of technology selection can be more serious than expected because of systemic effects. This principle has major impact on the economic viability of the twenty-first-century organization, because we will be selecting multiple technologies with a rapidity that is hard to comprehend at this time. Product technologies will become obsolete in such short periods of time that they will resemble the toy industry, where the average shelf life of a product may be only one season or sometimes only a month. We are already beginning to see personal computers fall into this category. In the early 1980s, when the personal computer was something new to all of us, the average shelf life was approximately 4 to 5 years for a model to become obsolete. Today, just 13 years later, the average shelf life has been whittled down to less than 1 year. By the time a company decides to update its PC technology to state of the art and acquire it, that technology would just become obsolete. In anticipation of even greater obsolescences, companies will usually wait for newer models in both hardware and software. The rapid turnover in both of these categories of technologies makes it even more difficult to implement newer ones. 7. Continuous education and training in a constantly changing workplace is a necessity, not a luxury. Companies have traditionally slashed the education and training budgets during times of economic downturn. Today, this would be a foolish strategy, because most employees know how to use process and information technologies to the fullest extent. Having spent millions, and sometimes billions of dollars in such technologies, it would be most uneconomical not to get the most out of these expensive technologies. Sometimes, a million-dollar piece of equipment has a 20 percent downtime, costing hundreds of thousands of dollars in lost revenues, simply because operators and engineers have not been trained in all aspects of its operation. The more the education and training for managing technologies, the greater the utilization rates would be, and hence, the greater the economic leverage. For example, in a multinational bank, such as Citibank, the technology group strives hard for customers to do worldwide banking in anyone of 14 languages. The company spends much time and energy educating and training the personal bankers, the customer service representatives, and others, in an effort to offer their clients the ever-increasing portfolio of products and services in a competitive manner. 8. Technology gradient is a dynamic component of the technology management process, to be monitored for strategic advantage. The term technology gradient refers to the technical advantage an enterprise enjoys with respect to its licensees and its competitors. Normally, most sensible multinationals maintain a sufficiently high technology gradient with respect to their licensees, particularly if the latter are even remotely associated with a product line that competes anywhere in the world. This is particularly true when the technologies are radically new, for example, biotechnology, global networking technology, etc. Technology gradient, which is the subject of another chapter in this handbook, is a powerful concept for managing the technological advantage that the company enjoys with respect to its competition

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worldwide. Briefly, a company monitoring its technology gradient can be in one of four postures: technology leader, technology follower, technology yielder, or technology loser. Depending on the technology advantage a company wishes to enjoy, it must consciously position itself as one of these. 9. The RTC factor must be carefully analyzed and meticulously monitored for gaining the most out of any technology, particularly a new one. The RTC factor refers to the magnitude and nature of resistance to change. Unfortunately, very little is known about the process of the RTC factor, and the rational means to minimize it. At the same time, however, we now know that a high RTC factor can lead to work slowdowns, poor employee morale, high maintenance costs, and even serious sabotages. Management has to recognize that a creative, lively workforce is better than stagnant, high-priced technology. Research shows that when new technologies are implemented, "total productivity" at first drops because of the natural response of employees-resistance to accept the new technologies as viable means-before it picks up again. The competitive threat of a new technology-based business paradigm (and its early implementation success) does often, unfortunately, prolong the last gasps of life in the old technology because it temporarily forces a really serious competitive pressure on the old technology. Under this real threat, it is amazing how much excess effort, costs, and inefficiencies can be wrung out of the last defense stand of the "old guard." It is usually a wasted effort, which delays the acceleration of the inevitable new "S" curve and prolongs the agony of the old. 10. Information linkage must keep pace with technology growth. As pointed out during previous discussion, information networks are evolving so rapidly that unless companies take advantage of linking up to such networks, they lose opportunities for new revenue streams. For example, companies that quickly capitalized on the accessibility to the Internet increased their market share through an exposure of their products and/or services to millions of people around the world. We barely understand the potential of the Internet through the World Wide Web (WWW). 1. Within a company, it has become an absolute necessity to keep all the employees informed of the latest technological developments within their own company so that unnecessary duplication of costly effort is avoided, and product changes and client updates are offered on an on-line basis so that customer responsiveness can be in real time. Time lags can cause serious miscommunications, particularly with multinationals. For example, if a component is eliminated in a product and this information is not communicated to the company's worldwide spare-parts inventory system, retail clerks somewhere in Indonesia or Taiwan may still be carrying the part on shelves unnecessarily, increasing their inventory carrying costs. Companies like Caterpillar and International Harvester maintain global inventory management systems so efficiently that within 24 hours they can have a part made available to any retailer around the world. In such situations, this tenet has even greater relevance and respect. 3) Discuss the role of Technology Transfer and its key factors as applicable to an organization? What do you understand by a technology package and what are its features? List the initiatives of India Government in improving technology absorption? echnology once developed can be used by its developer or owner, or can be transferred to another user immediately or after sometime at any stage till maturity, dictated by commercial expediency. Generally, newer technologies are transferred among the developed countries and matured or nearly matured technologies are transferred from developed to developing countries at the enterprise level. Basically there are two ways of acquiring new technology: develop it or purchase it. The second way of acquiring new technology is commonly called "technology transfer". The important reasons for purchasing technology are: (i) It involves little or no R&D investment; (ii) Technology can be used quickly; and (iii) Technical and financial risks are often quite low. There are also good reasons for selling technology such as (i) Increasing return on R&D investments; (ii) Technology may not have immediate use; and (iii) Technology has already been utilized up to its limit. Therefore, technology transfer occurs because of the existence of "buyers" and "sellers". The sellers are called "transferees" or "licensors" and the buyers are called "transferees" or "licensees" in the technology transfer process.

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Meaning of Technology Transfer: Transfer, as defined, means the acquiring through purchase and use of technology. Therefore, the definition of technology transfer is the acquisition and use of knowledge. There is no transfer of technology unless and until the technical knowledge is put to use. Technology transfer is not restricted here only to scientific or engineering items. The manufacturing, marketing, distribution and customer service are among the factors that are included in technology transfer. The key factors in technology transfer include: Transplantation of technology involves shift from one set of well-defined conditions to another set in which at least one key variable may differ. Secondly, the recipient may apply the technology to a different purpose from that of the supplier. A sense of opportunism prevails in technology transfer, whether justified or not. The transfer process embraces a rich variety of mechanisms and relationships between recipient and donor (supplier of technology) .The process can vary from a routine peopleless passive transfer to turnkey contract where the donor takes the full responsibility for all phases of the contract. The nature of the transferred technology and how it is transferred are critical to the success of the technology transfer process. Technology transfer may begin as a solution to someone elses problems. Adoption of such outside solution to solve an inside problem is technology transfer. The advantage lies in avoiding "reinventing the wheel". In this unit, we shall study the process of Technology Transfer and some of the related issues. Models of Technology Transfer Agencies that try to make technology transfers happen include government departments, financial institutions, industries, technology transfer agencies, consultants, venture capital companies, research companies, and R&D organisations, etc. These are the bridging agencies of Figure 7.1. The users of new technologies comprise private and public sector industries, giant technically oriented agencies such as Indian Space Research Organisation, government departments, Atomic Energy Commission etc. It can be seen that a wide spectrum of participants in the total economy are technology users.

Modes of Technology Transfer Technology transfer modes have been categorised basically as being passive or active, which refers to the transferors role in the application of technology to the solution of the users problem. If the transferring mechanism presents the technology to the potential user without assisting the user in its application, namely by a report or oral presentation, then the technology transfer mode is said to be passive. This is actually knowledge transfer. If the transferring activity assists the potential user in the application of technology, then the technology transfer mode is said to be active. In this process, the transferring activity goes beyond mere interpretation of the transmitted data and advises the potential user on how to apply the technology, or demonstrates the applicability of the technology to the perceived use. There could, however, be an intermediate also, which may be called semi-active mode in which transferring activity is in between the active and passive modes. TECHNOLOGY BASE TECHNOLOGY TRANSFER MODES USERS / NEEDS PUBLIC SECTOR ENGINEERING TRAFFIC SAFETY

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COMMUNICATIONS

EMERGENCY HEALTH CARE CRIME PREVENTION

MEDICINE ELECTRONICS (PASSIVE or ACTIVE) PUBLIC TRANSPORTATION DRINKING WATER QUALITY ENERGY CONSERVATION URBAN CONSTRUCTION etc. PRIVATE SECTOR INDUSTRY AGRICULTURE MINING CONSUMER PRODUCTS AUTOMOTIVE MEDICINE etc. nsfer agreements. Government Initiative and Technology Transfer Many Governments in advanced countries encourage the introduction/ import of new technologies to help or generate business development and economic growth. In countries, such as Sweden, Japan, South Korea etc., the Governments have instituted programmes of technology search whereby local companies and consultants are encouraged to set up networks of foreign contacts in other advanced countries to identify innovative products that could be made under licence in their country. These initiatives seek to use importation of technology to rejuvenate industries and initiate new product development. The innovation and economic growth is ultimately bound to follow the path of simulating R&D spending as a way to promote greater product innovation. These countries have excelled in technology innovation and in many cases improved upon the technology. Japan has become a major supplier of sophisticated technology to developing and developed countries. Government Regulations in Developing Countries Indiscriminate entry of inappropriate technologies will go against the declared national development objectives/priorities. It is in this context that most of the developing countries have established effective official mechanisms for determining the type of technology suitable to particular circumstances of their economies, and have developed systems and procedures for collection of information and data on technologies so as to strengthen their negotiating strength with the technology suppliers. The scope of these regulations covers a wide spectrum of issues. All of these include the establishment of a national registry in-charge of screening and authorizing a particular technological transaction. They define the transaction to be controlled by the registry. Special requirements or criteria like contribution to domestic technological capabilities, training local personnel and processing of domestic resources etc. are generally prescribed. Another important aspect relates to policies restricting the direct cost of technology transactions; i.e., a ceiling on remittance of royalties, control of payments for unused patents, direction of the agreement, control on excessive prices, etc. The regulatory system does not generally encourage indigenous development and the production is based on second or third generation technologies.

ENERGY

STRUCTURES CHEMICALS MATERIALS COMPUTERS etc.

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Structure for Licensing Service The use of licensing to help local development requires four key inputs: i) Information on licensing opportunities ii) A database on potential client companies iii) Technical personnel to interpret both the requirements of client firms and the offerings of potential licensors. (i) and (ii) could partly be provided by recourse to existing resources of a company. Ministry of Science and Technology and a few other ministries have established specialised departments for creation of database. The information is made available to the enterprise to supplement their own information systems. In India, most of the technologies are transferred from industrially advanced countries through various routes, the more popular being the route through licensing arrangements. There have been over 12,000 foreign collaborations in the past, 80% of which are from eight developed countries such as USA, Japan, West Germany, France, and Italy. Some of these foreign collaborations had equity participation also, the foreign investments being of the order of Rs. 500 crores per year. There are several instances of transfer of technology from R&D organisations to industry, mostly in areas of low technologies or technologies relevant to Indian conditions. The CSIR has played a major role in this respect, while technologies from defence R&D, Department of Space, Department Atomic Energy, etc. are also now being transferred to industry. There are very few instances of transfer of technology from one firm to another. In some areas such as chemicals & pharmaceuticals, construction, textiles, steel, hotels, cement and management, India has even exported technologies and services to other developing countries through licensing arrangements or contractual arrangements or joint ventures. Government is now paying greater attention to exports of technologies and services. Indian Experience The Industrial Policy Resolution of 1948 and the Industrial Policy of 1956 provided the basis for government policy for foreign investment and also in making available to the country the Scientific, technical and industrial knowledge" The transfer of technology was conceived to be a part of the flow of foreign capital and accompanying the technical collaboration. In 1961 selective foreign private investment and foreign collaboration were introduced. The Policy was to attract foreign capital in those fields in which the country needed development in pursuance of the plan targets economic development also for generation of employment. The policy towards foreign collaboration was further liberalised in 1970 for bridging technological gaps that existed in several sectors of industry. The Industrial Policy Statement of 1977 took note of continued inflow of technology in sophisticated areas. The policy statement gave preference to outright purchase of best available technology and then adopting it to meet the needs of the country. In the Industrial Statement of 1980, induction of advanced technology was favoured for encouraging exports and production of quality products at competitive prices. Technology Policy Statement of 1983 was directed toward technological self-reliance. In the acquisition of technology, consideration was given to the choice and sources of alternative means of acquiring it, its role in meeting a major need of the sector, selection and relevance of the product, etc. The Government of India in its Policy Statement of 1991 liberalised most of the restrictions in technology import. The policy is aimed at encouraging foreign investment up to 100 per cent in most of the sectors with a view to promote exports competition in Indian industry and production of better quality products. The regulatory procedures have been abolished with respect to many industrial sectors to allow free flow of technology.

Set II

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Q1. What is Technology Forecasting? Classify the Technology Forecasting Approaches in brief? Discuss in detail the Product Development Process Phase in Technology Management? Answer: Technology Forecasting is a prediction of the future characteristics of useful machines, products, processes, procedures or techniques. There are two important points implied in this statement, viz.: A technological forecast deals with certain characteristics such as levels of technical performance (e.g. technical specifications including energy efficiency, energy levels, speed, power, safety, temperature, rate of technological advances (introduction of paperless office, picture phone, new materials, costs etc.) Technological forecasting also deals with useful machines, procedures or techniques. In particular, this is intended to exclude from the domain of technological forecasting those items intended for pleasure or amusement since they depend more on personal fads, foibles or tastes rather than on technological capability.

The Technology Forecasting approaches are described in brief as under: There are two approaches to technology forecasting namely Exploratory and Normative. Exploratory techniques are primarily concerned with the analysis of historical data. Selected attributes such as functional performance, technical parameters, economic performance etc. are plotted against time. Since it is usually assumed that progress is evolutionary and that technological progress is not random, it is possible to generate characteristics or patterns from the data and from these patterns forecasts can be made with varying degrees of certainty. Examples of relevant exploratory techniques are: S-curves Cycles Trend Extrapolation Technology Substitution

Normative techniques start by proposing a desired or possible state, such as the satisfaction of a market need or the achievement of a technological development, and work backwards from this to determine the steps necessary to reach the required outcome. The number of foreseeable paths of development from the present position to the objective could range from none implying a completely new technology, to several. Each feasible path to the objective is analysed for its relevance and difficulty. Unlike exploratory forecasting, normative approach begins from the future and works out desired landmarks backwards to the present state. Examples of relevant normative techniques are: Relevance Trees Morphological Analysis Technology Watch and Technology Monitoring Delphi Analysis Trend impact analysis Technology substitution

Product Development Phase in Technology Management: In most manufacturing firms the critical product development steps are similar. These functional steps include: A product proposal Design of the product with relevant technologies

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Capabilities of the manufacturing or software processes to build and support the product The marketing of the product to potential customers

Product or Technology Proposal A product proposal is a common instrument used by management to review and consider new products or major enhancements in the product line. It can be describes as an opportunity analysis which analyses the characteristics of demand and competition. The socio-technical environment which assists in defining the opportunity. The feasibility and capability requirements of the firms engineering, manufacturing and marketing resources which relate to the potential product solution. A market structure and market segmentation evaluation of the competitive economics , and design and communication alternatives. The overall firms line of business policies and strategies as they relate to the new product opportunity.

Product Design and Technology In this step the design specifications, which include the technologies to be incorporated, are developed. Design and product engineering reviews modifies these specifications for manufacturing implementation. The acceptance of the design and technology is reached after the models of the product design and technology are developed and the product is stress-tested for design limitations and in compliance with customer requirements.

Manufacturing and Software Development On completion of the verification for design manufacturability must be assured through stress testing for capability of assuring function objectives, volumes, performance, and quality objectives. Software, as required, must be in place and fully tested. At this point, these actions must be capable of achieving the proper return on assets and intended minimal cost and capital expenditures compared to expected revenues.

Market Release, Marketing and Servicing Products The final step that leads the product to the marketplace is the market release process and the implementation of the marketing plan to market the product or technology. Final plans to market a new product through marketing programs and selected market channels are put into place. A marketing program for example can include advertising in the press, TV exposure or promotions using trade journals. Market channels can range from mail order to selling the product directly to companies. Q2. Describe in detail the Technology Life Cycle? What is the influence of IT revolution on technological changes? Explain what is meant by Generation & Development of Technologies? What is Technology Strategy and what is its importance at the corporate level? Answer: Technology Life Cycle The life 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. 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.

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Syndication Stage: This stage represents the demonstration and commercialization of a new technology (product, material or process) with potential for immediate utilization. Many innovations are shelved in R&D laboratories. Only a very small percentage of these are commercialized. Commercialization of research outcomes depends on technical as well as non-technical factors. Diffusion Stage: This represents the market penetration of a new technology through acceptance of innovation by potential users of the technology. But supply and demand side factors jointly influence the rate of diffusion. Substitution Stage: This last stage represents the decline in use and eventual extension of a technology due to replacement by another technology. Many technical and non-technical factors influence the rate of substitution. The time taken in the substitution stage depends on the market dynamics. Influence of IT revolution on Technological Changes: Information technology is all-pervasive and it affects all activities that contain some form of logical function. The source of the activity could be mechanical, electrical, pneumatic, hydraulic and even intellectual. Information Technology cuts horizontally across clerical, supervisory, managerial and communication activities which are common to all sectors of industry and also affect the design of products and services, processes and organizations producing the same. Some of the major changes brought about by developments in Information Technology are listed below: Changes in Products Changes in Services Substitutable Personal Services Progressive Services Explosive Services Changes in Processes Changes on Organization

Generation and Development of Technologies: Technology Generation and Development is often synonymous with the term Research and Development (R&D). However, technology generation involves R&D efforts while technology development involves further stages of translating R&D efforts into marketable products, processes and services. Stages in Technology Generation: Basic research and invention Applied research and functional prototype Engineering prototype and testing Production prototype and pilot production Product testing and modification Initial production and sales

Technology Development Approaches: In-House R&D Co-operative R&D Contract research R&D Collaboration Research Societies Research Companies

Technology Strategy and its importance at the Corporate Level:

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Technology strategy is a planning document that explains how technology should be utilised as part of an organizations overall business strategy. The document is usually created by an organizations technology manager and should be designed to support the organizations overall business plan. There are many factors in competition and technology is only one factor. Yet some firms effectively use technology as a competitive advantage, others do not. One important factor is the successful use of technology has been the role of general management in technology strategy. In particular it has been managements ability to foster core technical competencies. The central idea here is that a business can be developed around a long-term consistent focus on a core technological competency. What it means is to have a core corporate technical competency to lead in both innovating new technology products and improving manufacturing quality and lowering cost of these products. With this not only can products be improved in future generations of technology, manufacturing processes can also be improved accordingly. Q3. What is value chain & what are the activities? List & explain the factors that influence the successful management of innovation process. Explain the five stages of innovation process which is based on the pioneering work of Edward B. Roberts. Answer: Value Chain: In Michael E. Porters words the value chain is a systematic way of examining all the activities a firm performs and how they interact for analyzing the sources of competitive advantage. Porters Value Chain can be used to organize all the activities of a firm into categories of primary and support activities. Primary activities constitute the processes by which firms receive inputs, convert those inputs into outputs, get those outputs to customers, persuade customers to buy those products and support customers in using the products. Support activities are processes which provide support to the primary activities and to each other in terms of purchasing units, developing new and improved ways of doing activities, dealing with personnel and general management, accounting, finance and other activities which support the entire organization rather than individual activities. Value Chain Activities: Input/Output Analysis Alternative Technologies Ubiquitousness of Technology

Factors influencing the successful management of an innovation process:

Customer Focus: All R&D projects which have been taken up either on account of a felt customer need or with the involvement of a customer, have greater chances of commercial success. In fact, the most profitable ideas for innovations are derived from market needs. Climate of Change: Innovation thrives in companies where the desired climate and environment are encouraged and spearheaded by the top management. Committed Style: Organization culture in innovative companies is result oriented with full realisation of the fact that R&D is an activity which is input deterministic but output probabilistic. Combined Operations and Structures: The continuous cross-fertilisation of innovative ideas through different groups/functions in the company is necessary. Larger R&D projects are in fact, implemented by teams functioning as mini company organisations. Creativity and Communication Skills: Management of innovation process requires (i) creative skills in an organization, removal of mental blocks, rewards for taking risks and facing

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challenges and (ii) capability to effectively communicate across various functions and disciplines.

Control Systems: Control systems for management of R&D must be designed with the delicate balance between freedom to innovate and control to reach the market in time.

FIVE STAGES OF INNOVATION PROCESS (EDWARD B. ROBERTS): STAGE 1: RECOGNITION OF OPPORTUNITY: In most cases the innovative process is prompted by an opportunity to fill market need and/or exploit a technology. These opportunities could be for new or improved products, processes or services. The potential customer could be internal or external to the organization. STAGE 2: IDEA GENERATION, EVALUATION AND SELECTION: This stage is dominated by the search for ideas to capture the opportunity identified in stage 1. This might include formal RD&E processes or informal thinking. STAGE 3: PRODUCT DEVELOPMENT: This stage involves transfer of the new concept to the market. It is a problem-solving stage which takes the advanced concepts and ideas generated in stage 2 and develops them into a working prototype or pilot production run. STAGE 4. FULL SCALE DEVELOPMENT, VOLUME PRODUCTION AND COMMERCIALIZATION: This Stage Takes a Proven Concept From Stage 3 And transforms it into a Final Product according to Predefined Specifications, Reliability, Cost, Production Volume and Schedules. STAGE 5. TECHNOLOGY UTILIZATION AND DIFFUSION INTO THE MARKETPLACE: This stage involves the manufacturing, market promotion, distribution and technical support of the new product or service. This stage usually requires the largest investment of resources, often far exceeding the combined cost of stages 1 through 4.