Basic Concepts

UNIT 1 BASIC CONCEPTS

Objectives

After studying this unit, you will be able to :

• acquaint yourself with some definitions/nomenclatures concerning Technology

and Technology Management;
• appreciate the role and importance of Technology Management at corporate
level;
• understand various elements/ constituents of Technology Management;

Structure

1.1 Introduction
1.2 Definitions
1.3 Role and Importance of Technology Management
1.4 Technology Management in India
1.5 Summary
1.6 Key Words
1.7 Self-assessment Questions
1.8 Further Readings
1.9 References

1.1 INTRODUCTION

The word "Technology" comes from two Greek words : techne (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, commercialisation
and distribution of goods and services. Technology is embodied in various forms,
such as, machinery, equipment, documents, processes and skills (Figure 1.1) and as
such it conveys different meanings to different specialists under different contexts.
Figure 1.1

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Figure 1.1: Technology Concept
 Technology is man-made; it is a means to enhance the physical and mental capability
Technology : Issues and of human beings, it is also an instrument to transform natural resources into useful
Implications goods; a tool for conditioning the environment; it is a resource for creating more
wealth; a factor affecting development. Technology 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 in Table
1.1.

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
8 and experience.

Thus, technology is neither merely a product nor a process. It is now recognised as a

 Basic Concepts
means for the survival, order and progress of the human world. Technology does not
exist in isolation. It exists in human surroundings. Every technology when applied
causes some alterations in its human surroundings. Most of these alterations have
been beneficial to the mankind. However, there have been some harmful effects as
well. Technology is only a means for development and not an end in itself. It is,
therefore, essential that while determining strategies for technological advancements,
one must adopt an optimum approach of maximising the positive or beneficial effects
while at the same time minimising the negative effects of technology, especially
relating to atomic energy, deforestation and ecological balance, total automation,
artificial intelligence, etc.

According to Nawaz Sharif,' "Technology" is-

a "game" for the rich,
a "dream" for the poor, and
a "key" for the wise.

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 concerns 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 resource 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.

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 Table 1.2 : Some Implications of Technological World
Technology : Issues and
Implications

1.2 DEFINITIONS

Technology seems to be the most widely used word today in industrial world and
several words/ nomenclatures connected with technology are in vogue. These include
R&D, invention, innovation, technology development, technology strategies,
technology absorption and adaptation, technology transfer, technology forecast,.
technology assessment, technology planning, technology information, industrial
property systems, code of conduct, and technology management. It is difficult to find
a unique definition for technology for it has been defined in many ways. One
definition identifies technology as an application of knowledge that leads to
production and marketing of goods and services. According to Betz, Technology
develops business by providing technical knowledge for the goods and services that a
firm produces.2 Technological innovation implies new technology, creating new
products and services-hence new business opportunities. In this lies the basic
importance of innovation. which is fundamental to economic development i.e. the
10 creation of business opportunities. Managing technology means using new
technology to create competitive advantages which is quite a difficult job, partly due
to differing cultures in a company. Technology is often thought to be solely the
 Basic Concepts
domain of the scientific and engineering personnel of an organisation. Yet, successful
business use of technology requires strategic decisions about technology by
personnel in other functional areas, such as production, marketing, sales, finance, and
so on. Thus, the two cultures-technical and functional-need to be bridged, and
management should integrate technology strategy with business strategy. This is the
essence of technology management.

Innovation and Invention : Invention is an idea for a novel product or process.

Innovation is the introduction of new products, processes or services into the market
place. Technological innovation is a sub-set of innovation i.e. the introduction of new
products, processes or services based on new technologies. The technological
innovation begins with invention. The first step is the idea of the invention and the
research to reduce the idea to practice. This often results in a functional proto-type,
which can be} used for filing a patent. The next step is the research and development
of the proto-type into a commercially designed product. Finally, the product is
produced and sold.

The distinction between invention and innovation is an important one, for the
transformation from ideas into a successful product is actually difficult. This
transformation is the heart of the complex process of innovation. The hard fact is that
only a few inventions are successfully innovated, with fewer inventions developed
into new products, and still fewer new products succeed commercially. The problem
of managing technology thus can be divided into two parts : (i) encouraging
invention, and (ii) managing successful innovation. Encouraging invention falls in
the area of corporate research and managing successful innovation falls in the area of
managing technology.

Technology Management: Many factors make up the technology development

framework and there are several ways of condensing these into a manageable number
of groupings. Figure 1.2 shows these factors grouped around six broad dimensions:

i. Objectives
ii. Decision criteria
iii. Time
iv. Constraints
v. Activities
vi. Mechanisms

Obviously, these dimensions are interlinked and a proper management of technology

requires a systematic consideration of all of them.3 Figure 1.2 shows the dimensions
of Technology Management.

According to Solomon, Technology Management is the capacity of' a firm, a group or

society to master management of the factors that condition technical change so as to
improve its economic, social and cultural environment and wealth.4 That technology
management is important becomes obvious if one considers both what the economists
call the "input" and the "output" aspects of technical change, namely, sources of
modern technology on one side and its pervasive impact on society on the other.
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 Millett,5 the
following four general factors are considered important to successful R&D
management :
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i) a responsiveness to the needs of clients and customers;
ii) regular top-down and bottom-up communication;
 iii) an awareness that technologies alone are not products; and
Technology : Issues and iv) recognition that non-technological factors have profound impact on R&D.
Implications

Activity 1

Arrange a meeting with the head or senior functionary of the Engineering and
Technology' Division of your company or any other relevant organisation with which
you are familiar. Discuss with him the following and note down the main points that
emerge in the course of discussion :

a) What is meant by technology? In other words what is the scope or what are
the constituents of technology?
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b) Has the organisation done anything during its existence which can be called
innovation or innovative activity?
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 Basic Concepts
1.3 ROLE AND IMPORTANCE OF TECHNOLOGY
MANAGEMENT

Technology and management of technology are critical for an enterprise for its
successful operation on long-term basis. Technology management is, however, a part
of the total management system. There are three basic considerations for starting any
new firm based on technological innovation.

a) The idea for a technological innovation;

b) A potential market;
c) Team work in both technological and business expertise.

The above points underline the need for interweaving the technology framework with
other areas of business in an enterprise. The idea of a technological innovation should
be based or linked with the potential market and the technology team should closely
interact with the rest of the divisions of the enterprise leading to successful logical
conclusions in terms of products/ processes to be developed as per the objectives set
in the beginning. This strategy is best reflected in the form of a "Business Plan" of an
enterprise which needs to be prepared and approved before starting the new business.

The Business Plan : The business. plan is a strategic summary of a new venture. Its
purposes are:
i) to ensure, by clear focus in strategy, that important points necessary to the
success of any business venture, have been considered; and
ii) to persuade financial investors to invest in the new venture. A new venture
business plan could include the following:
a) Current business status
− Business objectives
− Management and organisation
b) Products or Services
− Product description
− Technological background
− Competition
c) Benefits to customers
− Market Competition
− Marketing strategy
d) Capitalisation
− Capital requirements
− Financial forecasts
− Benefits to investors
It is thus clear from the above that technology and technology management are only a
part of the total business activity or business plan of an enterprise.

Technology and Competition : Although technological competitiveness is

necessary for corporate survival, it alone is not sufficient. Of course, a corporation
with inferior technology cannot compete at the same price level with a corporation
superior in technology. The reason why superior technology alone is not sufficient is
that business is a system, and there are many other systems (or sub-systems) that
determine business success. Therefore, if technology is to give a competitive edge,
management must manage it as apart of the business system. Technological
innovation can be integrated with production, marketing, finance and personnel into a
balanced business system. Managing technology essentially involves four central
concepts:
a) New ventures
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b) Innovation
c) Research
 d) Research infrastructure
Technology : Issues and
Implications
New Ventures : Although new ventures centred around technology are an important
class of businesses, new hi-tech ventures are difficult because they involve two major
risks: developing new products and creating new markets. Ideas central to new
ventures are concerned with entrepreneural management, overall business plan, and
the dynamics of organisational growth.

Innovation : It denotes the whole span of activity from creating new technological
knowledge to implementing it in new businesses. Ideas central to innovation include
concepts such as types of innovation, processes of innovation, the-technology S-
curve, technology life cycle, economic life cycles, sources of innovation, business
opportunities in a technological system, marketing and new technology, corporate
diversification through new ventures, and technology in manufacturing strategies.

Research : Technological change is new knowledge about what things to produce

and how to produce them; and in the corporation, new knowledge often comes from
corporate research. The corporate laboratory is charged with the responsibility of
looking after the present and future productivity of the corporation. Managing and
integrating corporate research with other management functions and strategies is
essential to technology management. Research management includes organisation of
research, project management research personnel, and corporate research strategy.

Research infrastructure ! The technologies of a corporation do not exist in a

vacuum but are part of a larger technological context, first of the. industry, then of
the nation, and then of the world. This larger context is a research and development
infrastructure, and it has an important influence on the competitive conditions in a
country. With the expansion and increase of intensity of international competition,
the R&D infrastructure of a nation plays a critical role in economic competition.

Managing technology is taking risks in novel products and developing new markets.
In the world of rapid technological progress and changing competitive environments
and market needs, firms must pay increasing attention, to developing new innovative
products for domestic and world markets, and therefore an efficient technology
management system is important for them.

Let us first clarify the distinction between innovation, and invention since invention
is only the beginning of innovation. The steps required to transform invention into
innovation can be illustrated in the famous Xerox story.

In 1935, Chester Carlson was working in the patent office of Mallory Company. His
technical background included work as a carbon chemist, printer, and then as a patent
lawyer, He became concerned about the errors in copying patents for public
dissemination and the costs involved in copying. Using his chemistry and printing
background, lie began experimenting with new ways to create a copying process. His
basic idea was (a) to project the image of a typed paper onto a blank 'sheet of paper
coated with dry ink, (b) to hold the ink temporarily at spaces of typed letters by static
electrical charges induced by the light, and (c) finally, to melt the ink into the paper
by baking the paper. This would produce a quick, dry reproduction of a typed page;
and the process came to be called Xerography.

Carlson succeeded in obtaining a crude image, thereby reducing his idea to practice.
He filed for a patent. Yet like all new inventions, it was still not commercially
efficient, cost-effective, or easily usable. It required development. Development of a
new technology usually costs a great deal of money, takes time, and requires skilled
resources. All inventors face similar problems-first conceiving the invention,
14 reducing it to practice, obtaining a patent, then obtaining support for development
and commercialisation.
 Basic Concepts
Carlson went from company to company seeking support. He was turned down, again
and again. By 1942, he had obtained the valuable patent on the basic process. Then a
venturesome group at Battelle Memorial Institute agreed to work on the development
in return for a share in potential royalties. Battelle was a non-profit research' and
development organisation, with a range of advanced technical research capabilities.

Finally, the innovative pieces for Carlson began to fall in place---invention, patents,
development and commercialisation. In 1945, while Battelle began development of
the Xerography process, a small company named Haloid learned of Carlson' patents.
Joseph Wilson, the president, was a risk-taker and was looking for new products.
Wilson produced the first copiers, using Carlson's patents and Battelle's
developments.

The rest of the story became business history. That company became Xerox, creating
a new industry in office copying products. Xerox grew tremendously, keeping a
technological and marketing dominance over the industry for almost three decades.

The interesting questions to ask are : How many companies missed out on the
xerography patents? Why did it take an R&D outfit like Battelle to see the technical
potential in Carlson's invention? What leadership qualities do innovative, risk-taking
managers like Joseph Wilson possess?

Effective technology management in various countries have led to several

technological advancements in the past. In table 1.1 we had listed for you some
significant technological advancements during the past two centuries in selected
areas. Recent Gulf War (1991) is another burning example of technological

Table 1.3 : Speed of Introducing Technological Development into Social Use

Specific Technology Invention Innovation Speed of
Change
Aspirin 1853 1899 46
Incandescent Lamp 1854 1880 26
Telephone 1860 1887 27
Photography 1871 1888 17
Synthetic Rubber 1882 1932 50
Ballpoint Pen 1888 1938 50
Fluorescent Lamp 1896 1938 42
AM Radio 1900 1920 20
FM Radio 1902 1936 34
Aeroplane I903 1920 17
Vacuum Tube 1904 1915 II
Helicopter 1907 1938 31
Black & White Television 1907 1936 29
Colour Photography 1912 1935 23
Colour Television 1925 1953 28
Nylon 1927 1938 Ii
Penicillin 1929 1942 13
Jet Aircraft 1930 1942 12
Polaroid Photo 1937 1948 bI
Xerography 1937 1950 13
Electronic Computer 1945 1951 6
Transistor I947 1951 4
Source :.Sharif, Nawaz, 1983, Management of Technology Transfer and Development, APCTT,
Bangalore, p. 28.

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advancements in which defence systems using latest developments in materials,
electronics and computers, etc. were used by USA against Iraq. There is evidence to
show that there has been acceleration in technological change all over the world
 during the last one hundred years. Table 1.3 gives some evidence to indicate that
Technology : Issues and there is a decreasing trend in the speed of introducing technological developments
Implications into social use. The time of substitution has also decreased over the years. This has
stepped up the pace of invention, innovation and substitution/diffusion. This means
acceleration in the whole process of technological change. The new machines and
techniques are not merely products, but sources of fresh creative ideas.

Activity 2
Examine with reference to your organisation the importance given to the technology
component in the overall (corporate) plan. Take up the long term corporate plan and
look for the place accorded to and figures incorporated therein related to technology
component.
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1.4 TECHNOLOGY MANAGEMENT IN INDIA

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 realise 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 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 commercialised 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 recognised 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. The
technology management at enterprise level has therefore been mostly limited to
choice and acquisition of technologies from abroad and adapting the same to Indian
requirements. This generally involves only incremental developmental efforts rather
than innovations. Market forces play a decisive role in technology strategies at
enterprise 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
16 for almost everything that we use.

With the announcement of the New Industrial Policy and other fiscal measures by the
 Basic Concepts
Government in July 1991, the emphasis now is 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

Activity 3

Request your counselor to initiate a discussion on the state of technology

management in the companies to which the students belong. Let the students
assembled in the class exchange views with each other in which you actively
participate. List down the main points that emerge from the discussion.

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1.5 SUMMARY

Technology underpins business, providing technical knowledge for the goods -and
services that a firm produces. Managing technology means to use new technology to
create competitive advantages and integrate the technology strategy with the business
strategy at the corporate level, Technology management is a part of the total
management system and it is only one of the important elements in the total business
plan of an enterprise or a new venture. Managing technology essentially involves
new ventures, innovation, research and research infrastructure. Enormous efforts and
resources are required to translate invention into innovation, innovation into
technology, and technology into business.

The Indian industry on the whole has operated in a protective environment with
generally assured markets, and hence has not paid adequate attention to make the
necessary investments in. R&D and technology. The technology policies and
technology management structures have generally not been adequately evolved at
enterprise level. The industrial production is substantially based on imported
technologies, adapted to local requirements, with marginal developmental efforts.
There have however been instances of successful technologies developed
indigenously and commercialised for domestic as well as export markets. The New
Industrial Policy and other policies as well as fiscal measures of the Government of
India announced in July 1991 would call for not only a systematic approach but also
much larger resources and efforts for viable and responsive technology management
and support facilities at enterprise levels, to meet the requirements of international
competitiveness. Continued dependence on foreign technologies and technological
inputs, particularly the turnkey approach for setting up a project, would need to be
discouraged. An effective technology management policy and infrastructure is also
necessary for sustainable exports of products, projects and services.

1.6 KEY WORDS 17

Business Plan : A strategic summary of a new venture.

Technology : Issues and Innovation : Denotes the whole span of activity from creating new technological
Implications
knowledge to implementing it in new business.

Invention : An idea for a novel product or process.

R&D : A range of activities from invention and innovation to product/process

development, upgradation, modification, absorption of acquired technology, within
the framework of technology management.

Technology : Application of knowledge that leads to production and marketing of

goods and services.

Technology Management : Capacity of a firm, a group or society to master

management of the factors that condition technical change, so as to improve its
economic, social and cultural environment and wealth.

1.7 SELF-ASSESSMENT QUESTIONS

1) Define Technology and Technology Management.

2) Explain and discuss the role of technology in the overall business strategies
of a firm. How does technology affect the business plan of a company? Give
examples?
3) In your opinion what has been the role of technology at enterprise level in
India? What are the factors that may affect the management decisions
concerning technology?
4) How do you envisage the role of technology and technology management in
the new industrial environment in India'?
5) Differentiate between invention and innovation. Give one example for each.
What are the dimensions of technology management? Explain.
6) What are the basic considerations for starting a new firm based on
technological innovation? Explain. What is the role of technology in the
business plan of a new firm? Discuss.
7) Do you agree that technology developments in India have not been very
encouraging while achievements in science have been remarkable? If so, list
the reasons. Suggest some ways to improve the situation.

1.8 FURTHER READINGS

Annual Report, 1990-91, DSIR, New Delhi.

Dodgson, Mark, 1989, Technology Strategy and the Firm : Longman Publications,
U.K.

Sharif, Nawaz, 1986, Technology Policy Formulation & Planning : A Reference

Manual, APCTT : Bangalore.

Link, Albert N., 1990, `Perspective on Cooperative Research : Learning from US

Experiences', International Journal of Technology Management, Vol. 5, No. 8,
pp. 731-738.

Staley, Jeffrey L., 1990, `Getting More from Investments in Technology Through
Technology Asset Planning', International Journal of Technology Management,
18 Vol. 5, No. 6, pp. 627-638.

Habibie, B.J., 1990, `Sophisticated Technologies : Taking Roots in Developing

 Basic Concepts
Countries', International Journal of Technology Management, Vol. 5, No. 5, pp.
489-498.

Dwyer, Larry M., 1990, `Factors Affecting the Proficient Management of Product
Innovation', International Journal of Technology Management, Vol. 5, Vol. 6, pp.
721-730.

References

1) Sharif Nawaz, 1983, `Management of Technology Transfer and

Development, PCTT, Bangalore, 1983, p. 1.
2) Betz, Fredrick, 1987, Managing Technology, Prentice Hall, Englewood
Cliffs, New Jersey, P. XVII.
3) Sharif, Nawaz, op. cit, p. 47.
4) Solomon, J.J., 1990, `The Importance of Technology Management for
Economic Development in Africa, International Journal of Technology
Management, Vol. 5, No. 5, pp. 523-36.
5) Millett, Stephen, M., 1990, 'The Strategic Management of Technological
R&D An Ideal Process for the 1990s', International Journal of Technology
Management, Vol. 5, No. 2.

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