MERU UNIVERSITY OF SCIENCE AND TECHNOLO

BFB 3459: TECHNOLOGY AND INNOVATION

Morris K. Muketha
 BFB 3459: TECHNOLOGY AND INNOVATION
UNIT ONE: INTRODUCTION
Before we delve deeper into this unit let us look at scientific and technological developments that have
fundamentally distinguished the 21st century from the 19th century.
The 21st century has produced innovations such as;
 Smartphones and tablets
 Drone technology
 Electric cars
 Self-driving cars
 Social media
 Fiber optics
 3D Printing
Technology and innovation are new areas in management. However, they affect businesses and must
therefore be understood from the management perspective. In the past, the value of a company was
assessed largely on the basis of its capital and physical assets such as land, buildings, equipment, and
inventory. Today, the real value of a company is much more than the value of its physical assets or its
revenue. Technology adds value to the assets of a company.
The role of technology in fostering economic growth of nations and enhancing their industrial
competitiveness has been widely recognized, through its domineering influence over industrial
productivity. Further, technology has emerged as the most important resource that contributes directly to
socio-economic development. Hence, technology is viewed from various perspectives: as an ‘engine for
economic development’, as a ‘strategic resource’, and as a ‘competitive weapon’.
Technological development is becoming very important to all firms competing in global highly
competitive environment. The increasing of customer needs, demand, and expectations and with the
accelerated rates of technological change and development, business owners are becoming more
conscious of the strategic importance of technology in delivering value to their companies and networks
in which they operate. However, adopting new technologies should be aligned with organization’s
vision and strategic goals, and it should support the company’s sustainable development and enhance its
performance.
TECHNOLOGY: DEFINITION AND CHARACTERISTICS
Terms such as ‘technology’, “invention”, “design”, “innovation” and “entrepreneurship” are most times
used interchangeably. In this section we attempt to define these concepts.
Technology
Technology has been defined in a variety of ways. It is important to recognize these various approaches
to the definition before we build one to focus on in this text. This range of definitions demonstrates that
a variety of different perspectives on technology exist. A few of the major definitions of technology
include:
  The processes used to change inputs into outputs
 The application of knowledge to perform work
 The theoretical and practical knowledge, skills, and artifacts that can be used to develop products
as well as their production and delivery system
 The technical means people use to improve their surroundings
 The application of science, especially to industrial or commercial objectives; the entire body of
methods and materials used to achieve such objectives.

Technology therefore relates to the design, production and distribution of goods and services in response
to market needs. It is the knowledge, production, processes, tools, and systems used in the creation of
goods or in the provision of services.

Types and Forms of Technology

The technologies used in manufacturing firms may be classified as follows, while following their
features into account:
• Generic technologies: Highly consolidated production systems, characterized by relatively simple
operations and slow renovation.
• Advanced technologies: Production systems developed mainly after the Second World War,
characterized by complex, refined operations and a high speed of renovation.
• Hybrid technologies: Production systems in which the characteristics typical of advanced technologies
are prevalent, but not total, and which also include some characteristics of traditional technologies.
• Intermediate technologies: Production systems in which the characteristics of traditional technologies
are prevalent, but which also include some characteristics of advanced technologies.

Characteristics of technology
Inter-disciplinary
Exists in a historical context-influenced by and influencing culture and society
Uses and produces knowledge
Designed to enhance peoples capabilities and expand human possibilities
Purposeful intervention by design
Invention
An object, process, or technique which displays an element of novelty. Invention is the act of creating
something new and unique. Inventions are irrelevant unless they are put into practice. Once an idea
becomes a reality and economically relevant, it ceases to be an invention and becomes an innovation.
Innovation, invention and creativity
Rubenstein defined innovation as “the process whereby new and improved products, processes,
materials, and services are developed and transferred to a plant and/or market where they are
appropriate. It is therefore broadly thought of as new ideas, new ways of looking at things, new methods
or products that have value.
The ability to generate new and useful ideas is termed creativity. Creativity is defined as the ability to
produce work that is useful and novel. Novel work must be different from work that has been previously
produced and surprising in that it is not simply the next logical step in a series of known solutions.
Innovation contains the idea of output, of actually producing or doing something differently, making
something happen or implementing something new. Innovation almost always involves hard work;
persistence and perseverance are necessary as many good ideas never get followed through and
developed.
Innovation is the entire process by which an organization generates creative new technological ideas
(invention) and converts them into novel, useful and viable commercial products, services, and business
practices for (potential) economic gain.

Schumpeter’s distinction between “Invention” and “innovation”

• An ‘invention’ is an idea, a sketch or model for a new or improved device, product, process or system.
It has not yet entered to economic system, and most inventions never do so.
• An ’innovation’ is accomplished only with the first commercial transaction involving the new product,
process, system or device. It is part of the economic system
Entrepreneurship
Entrepreneurship is the capacity and willingness to develop, organize and manage a business venture
along with any of its risks in order to make a profit.

The initiator of the technology and innovation is an entrepreneur. Entrepreneurs are responsible for
creating new products, services, markets and the means through which these products are made, services
produced and markets reached. Entrepreneurs are often responsible for creating new forms of
organization and new ways of managing people. The entrepreneur operates by introducing such changes
directly by having the ability to organize physical information and human resources to bring out
innovation.
The relationship between an entrepreneur and an innovator is that entrepreneurs identify business
opportunities, seize these business opportunities, seek the resources to transform opportunities into
profitable business and the innovator identifies the ideas that are profitable and commercializes the ideas
into practical things, processes, goods and services that can be commercialized and sold to earn profits.
There is therefore a very thin line between an innovator and an entrepreneur.

UNIT TWO: TECHNOLOGICAL ENVIRONMENT

The technological environment portrays an organization’s potential in terms of the availability of raw
materials and machinery which is required for the manufacture of goods. No company can possibly
control the global environment and hence adaption of technologies may seem to be quite essential for
the businesses to ensure a competitive advantage. This section will essentially focus on making one
understand why technological environment is important for a business to flourish both nationally and
internationally, what are the advancements in technology that can help a business expand and finally
what are its impacts in the global market.
Technology is crucial for the entire global business world. Even though lowering of trade barriers have
theoretically helped expand markets and production potential worldwide, the advent of technological
innovations has added a practical reality to it. In today’s world, almost every business operation and
transaction involve a significant use of technology. Let us look at some of the important aspects of
technological integration to business.
1. Business Necessity- In the earlier days, everything in business was performed manually. Introduction
of technology has helped revolutionize the business concepts and models, thereby bringing tremendous
growth in trade and commerce. It has provided a faster, more convenient and more efficient way of
performing business transactions. Some of the technological uses in an international business
environment include accounting systems, management information systems, logistics tracking systems,
customer relationship services, point of sales systems, etc. These have enabled businesses to expand
globally as well.
2. Communication with Customers- In today’s world, technology has a great importance in building
relationships with customers. In a global business environment, quick and clear interaction with the
clients (globally) is a necessity as websites take hours to respond to customer queries. Alongside,
technological innovations in the transportation services have enabled fast shipment disbursal in a shorter
span of time across national borders. Language translation systems have enabled employees of a
business/organization to interact with customers worldwide, understand their concerns and resolve their
issues. This is how a global business environment benefits from a stronger communication system
globally.
3. Efficient Business Operations- Technological advancements in a global business environment have
helped them understand their cash flow needs, needs for free flow of shipment, needs for proper
inventory management, need for proper tracking and monitoring of shipment and need for proper
communication with clients in a much more efficient and faster processes, thereby saving time and
physical space. Low-cost internet services and World Wide Web have also enabled businesses to grow
internationally and cater to global needs easily.
4. Impact on Business Culture and Relations- With the advent of technology, stronger communications
are being facilitated among employees of a business, customers, shipment coordinators and all those
who are associated with a global business environment, directly or indirectly. This has helped to keep
aside all social tensions, distrust and formation of cliques which might have a negative impact on the
business to a large extent. Instead, it has helped develop a strong bond between the employees and
customers of a business.
5. Business Security- Businesses are often subject to threats. In order to expand globally, businesses
have started expanding online through internet services. This gets them exposed to cyber-crime threats.
With the technological innovations in line, especially in the form of Artificial Intelligence (AI) and
Machine Learning (ML), businesses can now monitor and secure financial, transaction, client related
data, various confidential reports and other proprietary information. With the help of cloud computing,
employees can now access to all business and client related data along with communicating with their
clients and other employees, while travelling or working remotely, even without direct active
management of data.
6. Research Capacity- All businesses need to expand – both the line of production capacity and client
base. Technology helps meet the business with newer opportunities by facilitating enough Research and
Development (R&D). This enables a business realize new dimensions to expand both domestically and
internationally, along with facing competition in the world market. Internet has enabled businesses to
access data on global markets without facing the costs of travelling or risks of creating separate
production plant abroad.
Trends In Technological Environment
A global business environment cannot function without a technological environment. The more the
technology evolves, the greater the benefits obtained by a business from it. Following are some of the
important ways in which technology has helped a business environment globally:
Biotechnology -Biotechnology can be defined as an amalgamation of technology and science, more
specifically, the creation of agricultural or medical products with the help of industrial usage and
manipulation of living organisms. With the rise of digital innovations such as cellular phones, computers
and wireless technologies, advancements have not only evolved in efficient communication and
productivity, but has also extended its effect towards medical and agricultural use. Following
biotechnological advancements have been witnessed worldwide:
i) The fusion of science and technology have bred a common bionic man immune to diseases
through advanced technologies in prosthetics, cell regeneration through stem cell research and
laboratory-engineered drugs which helps in preventing or curing of diseases like HIV or cancer.
ii) Pharmaceutical advancements are widespread through the raw material reserves of China, arrival
of biotech companies such as Genentech and New Merck (which is acquired by Swiss biotech
company Serono) and India’s emergence as a major supplier of effective and affordable drugs of
the largest and most generic pharmaceutical company Ranbaxy.
iii) Biotech companies have made attempts to discover genetic abnormalities, and therefore medical
solutions through exploration of organisms at the molecular level or formulation of compounds
from inorganic materials that reflect organic substances. Manipulation of DNA in the
laboratories also extended beyond common human research.
iv) The demand for corn-derived Ethanol as a fuel alternative saw a rise in US due to uncertain
future oil supplies. However, usage of corn as a bio fuel not only increased the price of fuel but
also created an imbalance between the corn that is used as a bio fuel and the corn consumed.
Hence, many global companies are working in collaboration, towards creation of genetically
modified seeds like drought-tolerant corn and herbicide tolerant soybeans. These technological
advancements have not only led to nutritionally advanced crops but also helped fight hunger
worldwide.
v) Biotechnological advancements have also benefitted the meat industry worldwide. The
collaborative work of researchers in US and Japan, in eliminating the gene which might be
 responsible for certain ailments in animals, has engineered a solution to the outbreak of certain
diseases arising from meat consumption. Furthermore, animal cloning has rose to high demand,
where a copy of pre-existing animal DNA, can speed up the food production with the increase in
production of meat or dairy- producing animals. US, South Korea, Japan, Australia, Italy, New
Zealand and China are among the most active animal-cloning countries.
vi) Technological advancements have also been witnessed in laser surgeries in correcting eyesight,
creation of vaccine to fight against emerging viruses or production of more nutrient-content food
products. In all, biotechnological advancements are actively emerging up to cope with the
worldwide issues of hunger and poor healthcare.
E-Commerce -Availability of internet and the growing demand of the worldwide web has brought a
drastic change in the marketing of goods and services. It has enabled firms ranging from small
enterprises to large industrial houses realize the potential of online global marketing along with
facilitating online buying and selling of goods and services globally. The low entry costs of internet
have, by far, permitted the small and medium enterprises (SMEs) having low capital investments to
emerge as significant global online marketers at a rapid pace. On the other hand, internet has also
enabled the customers to get an explosive range of information about varied products and services
online, alongside providing the potential to obtain products from the low-priced suppliers in the world.
This has helped in increasing the standardization of prices across national borders, thereby narrowing
the differences in prices, as consumers are now more aware of prices globally and purchase products
online accordingly.
Telecommunications -An important dimension of the technological environment in the international
businesses is telecommunications. From hardwiring a city/locality to provide its residents with a
telephone service, to wireless telecommunication services through usage of cellular phones, pagers and
other such services, technological leapfrogging is quick across the globe. Additionally, technology has
also merged the cellular phone and the computer, due to which growing number of people is now getting
access to web services, through their cellular phones. This growth is warmly acceptable as businesses,
domestic or global, will not be able to prosper without an efficient telecommunication system. Telecom
advancements in the form of 4G and 5G services have fostered closely knit global businesses.
Transportation Technology- apart from bringing innovations in the telecommunications and
computers, has also brought in some major developments in the transportation sector, ever since the
period of World War II. The most important developments came in the form of introduction of
commercial jet aircrafts, super freighters and containerization (system of intermodal freight transport
using intermodal (or shipping/ISO) containers of standardized dimensions), which has simplified the
trans-shipment from one mode of transport to another. While the containerization led to reduction in the
cost of shipments to longer distances, commercial jet aircrafts helped in the reduction of the travel time
for businessmen.
Globalization of Production Processes -A network of strong worldwide communications has become
essential to facilitate globalization of production for any multinational firm. Texas Instruments (TI), an
US based electronics firm, for example, have approximately 50 plants across 19 countries. A system on
satellite-based communicational lows the firm to coordinate and monitor its production systems in all
those 50 plants located globally, that include the planning of production processes, accounting and
financial planning, marketing of products, facilitation of customer services and human resource
management. Globalization of Markets The globalization of production and innovations in the
transportation sector has facilitated the globalization of markets too. The advent of containerization has
led to faster and reliable trans-shipment of goods within and across national boundaries, thereby leading
to creation of global markets. Commercial jet aircrafts have facilitated low-cost movement of people
around the world. Low-cost global communication networks, such as the World Wide Web have led to
global exposure of goods and services from around the world, through online marketing. Global
communications and global media together help in reducing cultural distances among countries and
encouraging a convergence of tastes and preferences of consumers worldwide, thereby creating a world
market for consumer goods. For instance, one can find a McDonald’s restaurant in India, as it is in New
York, buy a Sony Walkman in Delhi, as it is in Berlin or grab a Levi’s jeans in Paris as it is in US.
Technology Transfer It is a process that permits the flow of technology from a source to a receiver. Both
the source and the recipient of such technological transfers can be an individual, company or a country.
The source, in this case, is the owner or holder of the technological knowledge, while the receiver is the
beneficiary of such knowledge. With the advancements in the technological environment, the transfer of
such technological innovations is spreading rapidly across world markets, especially benefitting the less
developed and the emerging economies. The source of such technological knowledge usually happens to
be the advanced economies.
Block Chain -Block Chain is a system of recording information that completely prohibits to change,
hack or cheat the system. It is essentially a digital ledger of transactions that is duplicated and distributed
across the entire network of computer systems in the Block Chain. Block Chain and Block Chain-based
distributed ledger technologies are creating a tremendous impact both in the global trade supply chain as
well as in the global trade financially. It not only makes the shipment of goods more convenient, but also
simplifies the long and tedious process of obtaining a Letter of Credit (LoC), a payment mechanism that
is used in global trade. Several trade organizations such as the Dubai Chamber of Commerce and
Industry have launched an initiative to implement Block Chain technology for addressing world trade
issues like high costs and lack of transparency and security. Deloitte, have assisted an Indian private
sector bank in redesigning its LoC issuance service, using a Block Chain based solution that reduced the
issuance time from 20-30 days to hours. Companies such as Skuchain are by-passing the LoC altogether
and is providing real-time tracking of goods and inventory financing that reduces the risks associated
with transactions, and allows the trade financers to provide working capital relief to all the supply chain
partners at the lowest cost of capital in that supply chain.
Artificial Intelligence (AI) and Machine Learning (ML) Artificial Intelligence (AI) refers to the
simulation of human intelligence in machines or computer systems that are programmed to think and act
like humans. This term is also applied to any machine that functions like a human – mind such as
learning and problem – solving. Machine Learning (ML), on the other hand, is a part of Artificial
Intelligence (AI). It is a study of computer algorithms that can be improved automatically through
everyday experience and with the use of data. Both AI and ML can be used to optimize trade shipping
routes, manage vessel and truck traffic at ports and translate e-commerce search queries from one
language to another and respond with the translated inventory. It also works more towards making
global trade sustainable, rather than focusing only on efficiency gains and better customer services. An
example of this is the launching of Global Fishing Watch by Google in 2016, a real-time tool based on
Machine Learning which is used to curb the illegal means of fishing through provision of a global view
of commercial fishing activities based on satellite data and ship movements. Governments and other
organizations can also use this to track suspicious behaviours and work on developing sustainable
policies accordingly.
Trading Services -through Digital Platforms Trading services have now become much more convenient
online. With the help of several online digital platforms such as ‘Upwork’, users can now look for
service providers worldwide for a vast range of services, and can be able to find anything from an
accountant in US, to a web developer in Japan, or a virtual assistant in India. Certain start-ups have
come up with an online learning digital platform, that enables pairing up educators with children across
the globe to provide online education on a wide range of courses. An example of such an online digital
learning platform is VIPKID which connects American educational instructors with Chinese children for
teaching English online. Many online digital platforms have also come up to connect customers with
various professional service providers in just few clicks.
3D-Printing Services 3D-Printing (also known as Additive manufacturing) is a process of creating a
three-dimensional solid object from a digital file. This is done using an additive process in which an
object is created with successive layers of material until the object is created. 3D-Printing has the
potential to make the production of goods, from food to medical supplies and to great coral reefs,
accessible to everyone. In future, it may also lead its way into the businesses, disaster sites, outer space
etc. The significance of 3D- printing on a global business environment is still a debatable topic. Some
studies predict that with the mass-adoption of high-speed 3D-printing and lower associated costs, global
trade might see a decline by approx. 25 per cent, as 3D- printing involves lesser manpower and reduces
the need for importing goods. Others argue on the account of complexities and reality associated with
mass-manufacturing using 3D-printing. Regardless of being positive or negative, the impact of 3D-
printing seems to have a real impact on global trade, with the efficient and low-priced availability of 3D-
printing methods.
Mobile Payment Services. With the advent of M-Pesa, Mobikwik, Google Pay, Phone Pe and other
UPI (Unified Payments Interface) methods, mobile payments seem to transform the lives of people and
help in linking more people to global market opportunities. As per the World Bank Global Inclusion
Database, mobile money payments were a major drive for financial inclusion during 2011-14, especially
in the emerging economies, as the number of people who gained access to bank accounts increased by
20 per cent during the same period. This has made people to participate in global trade in a much easier
and faster method, either as consumers or businessmen.
Customer Relationship Management (CRM) Software Services - With the expansion of a business
across national borders, one needs to essentially look into the customer services and therefore
maintaining healthy customer relationships. However, global expansion of business can really make it
difficult to keep a proper track on all client records. This is where the CRM software services come into
play. The CRM software helps in creation of a database for all your customer contacts that can easily be
accessed by any member of one’s team, related to business. This software is very much essential while
running businesses on a global scale. It helps to create a database for maintaining the product order
histories, concerns raised by consumers, and personal as well as business related information of each
individual consumer along with their contact details (phone calls, emails and chats). This information
enables a company or a business to track their customer’s location, along with the languages that they
speak and the local customs that the company may require to be aware of, alongside any applicable trade
rules or restrictions.
Cloud Computing Services. Cloud computing refers to an on-demand availability of all computer
system resources, especially data storage and computing power, even without direct active management
by the user. It is generally used to describe the data centres over the internet. This technology is
especially beneficial for companies working on a global front and where employees need to travel quite
frequently or work remotely. With the help of Cloud computing, an employee can get access to files and
essential information regarding their organization from anywhere and can remain connected to its
customers as well as office, on filing of reports, sharing of data or communicating uninterruptedly
around the globe.
Logistics Tracking Technology -Logistics is an essential part of doing business, especially during
buying and selling goods internationally. Execution, receipt and tracking of shipment require a lot of
planning, consideration and careful handling as a wrong shipment can have an adverse impact on time,
money and customers. In order to help the companies deal with this task efficiently, an innovative
technology in the form of Logistics Management Systems have come up. This system helps in planning
of trade routes, monitoring of any trade restrictions or problem areas, if any, and track movements of
goods and services. It also helps in modifying disrupted trade routes to get the deliveries back on track.
Electronic Shipment Tracking is nowadays evolving to help in meeting business needs. Cost effective
Radio Frequency Identification (RFID) devices have evolved to be more affordable and attainable for
companies, followed by Bluetooth Beacons which emerged as another alternative option for
electronically tracking shipments. The emergence of RFID and Bluetooth Beacons has therefore, helped
the businesses in taking advantage of Automatic Identification and Data Capture (AIDC) in their supply
chains, making it more reliable to manage and track their shipments.
Translation and Language Learning Software and Services -Language barriers can appear to be a
real challenge for a global company, especially when it comes to communicating effectively with its
customers or business clients. Web-based translation companies have evolved themselves and are still in
the process of upgrading their functions every day. Though they sophistically translate and check the
communications, it is still suggested to have a professional translator or a fluent speaker to check the
communications and avoid inaccuracies, if any. In order to continue a business with its partner or
customer in the long-run, learning of the foreign languages can help reducing expenses or translation
costs and can help provide better customer services. In such a case, a plenty of online reputable
programmes and software courses can help one learn and improve their foreign language skills.

Impact of Technological Environment on International Business

Every businessman or marketer around the globe is now well aware of how important technology is for
the businesses and what are its effects on a business environment? There are both negative and positive
effects of technology for a business. Initially, the businesses were dependent on a labour force. But with
the rise in technology, businesses do not want to lag behind. They have already started implementing
newer technologies to flourish worldwide. Here are some of the ways in which the technology affects
the global business environment.
1. Technology helps in diminishing business security risks by hiring best of security specialists for
preventing sudden cyber-attacks and with the use of AI and ML, such threats are being minimized.
2. Technology ensures business growth by enabling almost all business actions to be automated,
thereby reducing involvement of human labour. This has helped in increasing the sales, revenue and
profit for the businesses and the usage of internet have enabled them to grow online and expand
worldwide.
3. Online presence through social media channels is one of the business-oriented targets that the
enterprises are trying to fulfil to grow along with the broadening of its client base. Technological
tools that help businesses identify their preferred content, optimum time of posting their service
contents, automated posting and location- specific targeting to expand their business, are actually
helping to establish the business better in the online world. Tools like Google analytics are playing a
major role in this.
4. Technology helps in increasing employee productivity for a business through various computer
programming and software such as AI, ML, and cloud computing that helps businesses to process
more information, sitting anywhere in the world, than manual methods, thereby reducing much of
human involvement in such tasks. Organizations are also using fundamental business technologies
for employee performance appraisal information in the online framework to supervise the
performance of its employees and create measurable goals for their employees to achieve and
thereby sustain the business objectives.
5. Business technologies are now allowing companies to outsource certain business functions to other
businesses in the national and global business framework. Technical support and customer service
are the two most common outsourced functions. Outsourcing therefore helps companies lower their
business costs and focus on completing their business functions, which they are best at. With the
help of several technological innovations, businesses can also outsource their functions to the least
expensive areas possible, including those in foreign countries as well.
Trends In Technological Advancements
Several new technological creations have been developed for the Indian businesses to improve their
business performances using more advanced technologies such as Robotic Process Automation (RPA),
Artificial Intelligence (AI) and Analytics. The top five trends in technological innovation with respect to
firm business environment, during the period 2019-20 are as follows:
1. Emergence of Hyper-automation – An infusion of the RPA, AI and Analytics creates a new
technology called Hyper-automation which enables optimisation and modernisation of processes.
Hyper-automation uses a mix of rising technologies such as Machine Learning, RPA, Intelligent
business management software and AI, to take the automation of organizational processes to a higher
level. A mix of devices supports this process to function exactly as human workforce, post which the
solution can even carry out the decision-making process independently. This process results in
increasing rates of productivity, broader access to data and helping decision makers to carry out better
decisions for their customer leveraging analytics.
2. Increase in Artificial Intelligence (AI) Usage – AI is now blending into the daily routine of human
workforce with more reliable and advanced AI engines. High-speed optical fibre internet is now
available at every home in India, enabling the data to develop devices that are more human friendly and
easily handled. AI will also help in streamlining the non-value-added tasks to be performed, therefore
freeing up humans to invest their time in more meaningful and other important business-related
activities. More and more, Indian companies have now started investing in data analytics, AI and ML to
train and enrich their workforce with various analytical skills, thereby enabling them to take advantage
of advanced technologies. Some of the uses of data analysis include algorithms for analysing fingerprint
data systems fingerprint data, finding of errors and giving insights, and also suggesting new data that
should be analysed along with.
3. Conversational AI and Natural Language Processing (NLP) – NLP has earned a great popularity
through the use of voice search and voice assistants, thereby creating a paradigm shift in AI, in many
Indian companies. The NLP helps in increasing visualised dashboards and reports within their Business
Intelligence systems. A number of Q&A or chat mediums are being used to gain real-time answers and
useful visualizations from data-specific queries. Computational linguistics is still a major area of
ongoing research using NLP, considering its ability to improve efficiency and insights, according to
which NLP will turn out to be beneficial in the process of optimizing data exploration and improving
communications in the upcoming future.
4. Autonomous Things (AT) – One of the most revolutionary innovations in is the Autonomous Things
(AT). AT allows multiple devices to work in collaboration using limited or no human dependency input.
It has the ability to surpass process automation to integrate advanced AI for delivering communications
and behaviours with more natural interactions with humans and the business environment.
5. Data Storage Technology Innovations – With the increased amount of data, the concept of Software
Defined Storage (SDS) system has evolved, which combines the software and hardware from different
manufacturers for operating together resulting in an enormous efficient data handling performance,
making it more secure and easier to perform.
Alongside, another popular trend in technology has been witnessed through hyper scale data centre
construction, which is prevalent in the data centre industry since 2019, allowing Indian business sectors
to adopt Data Centre Infrastructure Management (DCIM) solutions, in order to cater the demands of
modern business environment. The year 2020 saw an increase in the enterprises who have been
designing and implementing smart data centres for operators to integrate proactive sustainability and
efficiency measures.

Intellectual Property Rights

The technological environment is key to the development of an organization. In this section we look at
the intellectual property rights.
While patents, copyrights, and trademarks are all ways of protecting intellectual property, they are each
designed to protect different things. A patent protects an invention, and a trademark protects words or
symbols intended to distinguish the source of a good. A copyright protects an original artistic or literary
work.
I Patents
A patent is property right protecting a process, machine, manufactured item (or design for manufactured
item), or variety of plant. In many countries, inventors can apply for patent protection for their
inventions.
Patenting an invention is a serious undertaking. To apply for a patent, the inventor must explain how to
make and use the invention, and make claims about what it does that makes it a new invention.
Drawings of the new invention are also often required.
Almost every country has its own laws governing patent protection. A patent granted in one country
does not provide protection in other countries. People or firms seeking patent protection in multiple
countries must apply in each of the countries in accordance with those countries’ requirements.
The Paris Convention for the Protection of Industrial Property (also known as the Paris Convention
Priority) is an international intellectual property treaty adhered to by 174 countries as of December
2011. Under the Paris Convention, a citizen of any member country may patent an invention in any of
the member countries and enjoy the same benefits of patent protection as if the inventor were a citizen of
those countries. That is, the Paris Convention eliminates (for its member countries) any differential
patent rights afforded to citizens of the country versus foreign nationals. Furthermore, the treaty also
provides the right of “priority” for patents and trademarks. Once an inventor has applied for patent
protection in one of the member countries, the inventor may (within a certain time period) apply for
protection in all the other member countries.
Another very significant international patent treaty is the Patent Cooperation Treaty, or PCT. This treaty
facilitates the application for a patent in multiple countries. An inventor can apply for a patent to a single
PCT governmental receiving office, and that application reserves the inventor’s right to file for patent
protection in more than 100 countries for up to 2½ years. Once the inventor has filed the application, a
PCT governmental searching office will perform the patent search for the application (this search
verifies that the invention is not already subject to a prior claim). Once the search is completed, the
inventor can choose to enter Chapter II of the process wherein the PCT governmental office assesses the
patentability of the invention subject to the standards of the Patent Cooperation Treaty. Eventually, the
inventor must have the PCT application filed in each of the national patent offices in which the inventor
is seeking protection
ii Copyrights
In Kenya, the copyright act Chapter 30 of 2001 regulates the use of copyrights. A Copyright is a form
property right of protection granted to works of authorship. The authors of original literary, dramatic,
musical, artistic, (paintings, drawings, etchings, lithographs, woodcuts, engravings and prints, maps,
plans and diagrams, works of sculpture, photographs not comprised in audio-visual works, works of
architecture in the form of buildings or models; and works of artistic craftsmanship, pictorial woven
tissues and articles of applied handicraft and industrial art) and certain other intellectual works can
obtain copyright protection. Like trademarks, the rights of copyright protection are established by
legitimate use of the work. This protection is available whether or not the work is published and
prevents others from producing or distributing that work. The owner of the copyright has the exclusive
right to do (or authorize others to do) the following:
• Reproduce the work in copies or phonorecords.
• Prepare derivative works based upon the work.
• Distribute copies or phonorecords of the work to the public by sale or other transfer of ownership, or
by rental, lease, or lending.
• Perform the work publicly, in the case of literary, musical, dramatic, and choreographic works,
pantomimes, and motion pictures and other audiovisual works.
• Display the copyrighted work publicly, in the case of literary, musical, dramatic, and choreographic
works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a
motion picture or other audiovisual work.
• Perform the work publicly by means of a digital audio transmission (in the case of sound recordings).
There are, however, limitations to these rights. In particular, the doctrine of fair use stipulates that in
most circumstances it is not a violation of copyright for others to use copyrighted material for purposes
such as criticism, comment, news reporting, teaching, scholarship, or research. Furthermore, some types
of work cannot be protected by copyright. For example, work that has not been fixed in a tangible form
of expression (for example, a choreographed dance or improvisational speech that was not notated or
recorded) is not eligible for copyright protection. Titles, names, short phrases, slogans, familiar symbols,
and lists of ingredients also cannot be copyrighted.
Unlike patent protection, copyright protection is secured automatically when an eligible work is created
and fixed in a copy or phonorecord for the first time.
iii Trade marks
An indicator used to distinguish the source of a good. A trademark is a word, phrase, symbol, design, or
other indicator that is used to distinguish the source of goods from one party from the goods of others.
The “Intel Inside” logo on many computers is one example of a trademark, as is the familiar Nike
“swoosh” symbol. A service mark is basically the same as a trademark, but distinguishes the provider of
a service rather than a product. Often the term trademark is used to refer to both trademarks and service
marks.
Trademarks and service marks can be embodied in any indicator that can be perceived through one of
the five senses. Most marks are embodied in visual indicators, such as words, pictures, and slogans.
However, marks are also registered that use other senses such as sound (e.g., tones that are associated
with a particular company or brand) or smells (as in fragrance). Trademark rights may be used to
prevent others from using a mark that is similar enough to be confusing, but they may not be used to
prevent others from producing or selling the same goods or services under a clearly different mark.
The rights to a trademark or service mark are established in the legitimate use of the mark and do not
require registration; however, registration provides several advantages.
 First, registering the mark provides public notice of the registrant’s claim of ownership over the
mark.
 Second, marks must be registered before a suit can be brought in court against an infringement of
the mark.
 Third, registration can be used to establish international rights over the trademark, and to protect
the mark against infringement from imported products.
Trademarks that contain information on all trademark registrations and renewals. To eliminate the need
to register separately in each country (or region), the World Intellectual Property Organization
administers a System of International Registration of Marks governed by two treaties: the Madrid
Agreement Concerning the International Registration of Marks and the Madrid Protocol. Countries that
adhere to either (or both) the Madrid Agreement or Madrid Protocol are part of the Madrid Union. Any
individual that lives in, is a citizen of, or maintains an establishment in a Madrid Union country can
register with the trademark office of that country and obtain an international registration that provides
protection in as many other Madrid Union countries as the applicant chooses
iv Trade secrets
Rather than disclose detailed information about a proprietary product or process in exchange for the
grant of a patent, inventors or firms often will choose to protect their intellectual property by holding it
as a trade secret. A trade secret is information that belongs to a business that is generally unknown to
others. Trade secrets need not meet many of the stringent requirements of patent law, enabling a broader
class of assets and activities to be protectable.
Information is typically considered to be a trade secret only if it (a) offers a distinctive advantage to the
company in the form of economic rents, and (b) remains valuable only as long as the information
remains private. Examples of trade secrets might include information about a firm’s customers, its
marketing strategies, or its manufacturing processes.
For information to qualify as a trade secret, the information must meet the following three criteria:
• The information must not be generally known or readily ascertainable through legitimate means.
• The information must have economic importance that is contingent upon its secrecy.
• The trade secret holder must exercise reasonable measures to protect the secrecy of the information.
No individual or group can copy, use, or otherwise benefit from a trade secret without the owner’s
authorization if they meet any of the following conditions:
1. They are bound by a duty of confidentiality (e.g., employees, lawyers).
2. They have signed a nondisclosure agreement.
3. They acquire the secret through improper means such as theft or bribery.
4. They acquire the information from someone who did not have the right to disclose it.
5. They learn about the secret by mistake but have reason to know that the information was a protected
trade secret.
UNIT THREE: PROCESS AND TECHNOLOGY CHANGE
Phases of Technological Progress: Invention, Innovation and Diffusion.
1. Invention
Invention is the act of creating new technology. It involves a new scientific or technical idea, and the
means of its embodiment or accomplishment. To be patentable, an invention must be novel and have
utility.
2. Innovation
Innovation may be used synonymously with “invention” or may refer to discovering a new way in which
to use or apply existing technology. Everett Rogers thought of innovation as an idea, behavior, or
product that appears new to its potential adopter. There are five main attributes of innovative
technology: Relative Advantage, Compatibility, Complexity, Trialability, and Observability.
Relative advantage means the product or behavior is perceived as being better than the alternatives by
the person adopting the innovation. Better can mean a lot of different things. It can be a device that can
peel a potato faster so it saves time or a seat belt that offers the advantage of greater safety.
Compatibility refers to how the innovation aligns with the adopter’s lifestyle.
Complexity is how easy or difficult innovation is to understand. The easier an innovation is to
understand and use, the more likely it is to be adopted. Complex innovations face an additional
challenge to mainstream adoption.
Trialability refers to the process of testing the innovation to see if, or how well, it works. Extensive
testing usually occurs before an innovation is adopted or taken to market.
Observability involves seeing the product or behavior in action. It can demonstrate how it can be used. It
is easier to get potential adopters to simply observe an expensive product like a car than it is to get all of
them in one for a test drive. Also, the more people around you that you see using a product, the more
likely you feel like buying that product too.
3. Diffusion
Diffusion pertains to the spread of technology throughout a society or industry. It is the process by
which a new idea, product, or behavior is accepted by the market. Technology diffusion means the
spread of usage/application of new technology from its current user to others.
The diffusion of innovation theory, introduced by Everett Rogers, explains how different groups of
people adopt innovation in different ways, in order to best suit their own needs or desires.
There are five categories of adopter classes and keeping in mind that most of the overall public tends to
fall in the center classifications, it is as yet important to comprehend the qualities of the objective
populace. While advancing a development, there are diverse procedures used to speak to the distinctive
adopter classes.
Innovators
At the point when an item is put available the main people to purchase the item are the ‘innovators’.
This little gathering of individuals needs to be the first to attempt the item and they will go for
icebreaking. These elite clients in this gathering are in this way innovators. In this manner, the item will
turn out to be progressively well known and deals will increment.
Early adaptors
Much the same as the innovators, the early adaptors get a kick out of the chance to experiment with new
things and they are not reluctant to put resources into new items. This gathering is fundamentally bigger
than the ‘innovators’ gathering and regularly they definitely know much about the new item. In light of
this information they assume a vital part in verbal promoting concerning the new item because of which
deals will increment emphatically.
Early majority
The early majority aggregate adores patterns, however wants to keep a watch out before making a buy.
The item will be purchased in large numbers by this gathering of individuals. The item will turn out to
be to a great degree prevalent and this will cause an avalanche sought after.
Late majority
The late majority amass really lingers behind and will just purchase the item after numerous other
individuals have gotten it and its prevalence is as of now diminishing. The motivation behind why this
gathering does not purchase the item from the begin needs to do with trust in the item. This gathering
must be sure beyond a shadow of a doubt that they are not making a terrible purchase. The item is
likewise sold much of the time in this ‘late majority’ organize.
Laggards
The laggards bunch lingers behind (intentionally or unknowingly) in the pattern and dislikes
development or change. It isn’t until the point when the item isn’t much popular anymore and is going to
leave the market that this gathering chooses to purchase the item all things considered. The most evident
reason is that this gathering holds up until the point that the business cost is brought down.
There are five principal factors that impact adoption of an innovation and every one of these factors is
influencing everything to an alternate degree in the five adopter categories.
Relative Advantage: How much an advancement is seen as superior to anything the thought, program, or
item it replaces.
Compatibility: How consistent the development is with the values, experiences, and needs of the
potential adopters.
Complexity: How troublesome the development is to understand and additionally use.
Trainability: The degree to which the development can be tested or explored different avenues regarding
before a pledge to embrace is made.
Observability: The degree to which the development provides substantial results.

Technology Transfer
Technology transfer refers to the flow of “hardware” and “software” elements of technology, that is,
equipment, methods, procedures, information, knowledge, skills and know-how, from one individual or
organization to another for economic purposes.
Types of Technology Transfer.
There are many types of technology transfer: horizontal and vertical, internal and external, commercial
and noncommercial, and passive and active.
Horizontal transfer is when established technology is processed from one environment to another, and
its aim is not commercialization but the dissemination of technology and extending its application. It
includes licenses, sale of patents and designs, know-how, industrial cooperation, technical services, joint
ventures, and turnkey contracts. An example of horizontal transfer can be a company that tries to
maximize the return from its technology but is unable to do this by directly selling end products. It
occurs in relations between industrial (the global north) and developing countries (the global South).
There is no improvement of technology unless it is necessary to adapt it to local conditions.
The vertical transfer means moving technology from research to development and production. This
includes progressive stages of invention, innovation, and diffusion, usually by commercialization. The
vertical transfer takes place within one organization or in the transaction between different actors, such
as a research institute and company. Examples include contract research and development, scientific and
technical advice, technical staff movement, and spin-offs.
The internal transfer is based on knowledge existing in the enterprise, which is not documented, and on
results of internal research, as well as on knowledge of company employees and customer relations
management. In contrast, the external transfer includes individuals and inventors, technology
companies, research and development units, joint or cooperative research and development agreements,
research consortiums, higher education institutions, science and technology parks, fairs and economic
missions, Internet databases, and brokerage events.
The commercial transfer is related to the flow of tangible assets in commercial transactions between
different entities. It is also the conversion of scientific and technological knowledge into commercial
products or services. For example, trade in goods, foreign direct investment, licensing agreements, joint
ventures, international subcontracting, turnkey contracts, patents, licensing, spinoffs, cross-licensing,
and strategic supplier agreements. The noncommercial transfer is a movement of knowledge and
capacities from one place or organization to a recipient country, firm, or community. Examples are
capacity building and training, exchange of personnel, technical assistance programs, trade fairs, the
flow of books and journals, movement of persons through immigration, academic exchange, project and
study visits, and collaborative research.
The passive transfer takes place when technology movement is based on the application of a potential
user. It includes only the knowledge, without transferring the skills connected to it (e.g., reports and
manuals). The active transfer is when the provider of the technology assists with its application (e.g.,
demonstration of the technology and training in developing countries), and in semi-active form when a
third-party agency or broker provides the transfer process to the final user.
Technology Transfer Models
The more complex configuration of stages in the interaction between transferor and transferee are
technology transfer models. Usually, such models include the following: (1) proposal and planning,
including a techno-economic analysis to establish the project, including location and preparing a
business case and resources; (2) identification of technologies needed to be transferred; (3) basic
engineering studies, specifying details of the plant to be designed; (4) detailed civil engineering plans,
plant construction, and production startup; (5) selection of local suppliers for equipment and
subcontracting services, adapting the process and product if needed; (6) training and improving local
skills for transferred technology; and (7) providing external support to strengthen the relationship
between sender and recipient. Transfer models show that transferees from developing countries should
be involved at all stages of the process from the beginning; the transfer does not end with the start of
technology usage, and it should be supported with the training of engineering and worker skills.
Factors influencing technology movement can be grouped into four categories: firm specific, industry-
specific, region-specific, and nation-specific. At the company level, barriers and factors of success
include stakeholder awareness of foreign technologies, internationalization and connections with
research institutions, relationships between transferor and recipient, and level of education and
technological capabilities of the workforce. Industry specific factors include the level of market
development and profitability and political and regulatory conditions for the sector. On regional and
national levels, factors include political support for industry, the openness of trade, investment regime,
quality of institutions, business risk, availability of human capital, cultural values and norms, local
needs, and relations between academic, political, and business organizations. Those factors can also be
analyzed as micro and macro-barriers. Micro-barriers can be resolved by transferor and transferee,
whereas macro-barriers need external influence on economic, financial, political, institutional, cultural,
and social contexts. Technology Gap A technology gap between developed and developing countries
influencing world poverty can be reduced by technology transfer. The effective transfer can be
established by engagement, financial and training support of industrialized countries, corporate
responsibility, international organizations, and determination of global south countries' governments. In
the past, programs often failed because of problems such as the selection of technologies from
uncompetitive areas, lack of human capital, lack of engineering studies (e.g., resulting in a large
displacement of people and destruction of agricultural lands), lack of intellectual rights protection, and
investment by companies that are owned and controlled by overseas investors, and thus do not support
the citizens of developing countries.
Technology Life Cycle and Innovation S-Curve
A standout amongst the most famous concepts in Innovation is the Innovation S-Curve, the technology
life cycle. This system, which operates alongside the Bass Model, is used to decide execution in regards
to time and exertion. It assists in deciding the level of development of the industry/item.
As a result, while assessing an item or an industry, it is significant to understand where it is on the S-
curve because of the numerous implications that result out of that such as the possible risks and pitfalls
that are associated for specific phases on it.
Major Phases of Technology Life Cycle
Taking a glance of technology life cycle, we can decipher 4 different stages: Ferment, Takeoff,
Maturity, Discontinuity. Positioning a new industry/ product assists professionals to determine what is
the potential of it and also decide on a certain innovation strategy that will fit best for it.
Era of Ferment: This phase is in the start of the S-Curve example of innovation. It is the point at which
the item/industry is totally new. As a result, a predominant design in the market hasn’t been established
yet. In this manner, the opposition between the various players in the industry is wild. As a result,
usually at this stage most of the resources are spent on research and development.
Takeoff: In this phase, because of the capacity to conquer a noteworthy specialized obstacle or the
capacity to satisfy a request of the market, the item/industry have been embraced by the early greater
part and figured out how to cross the chasm and a predominant design has been established as of now.
Subsequently, the market will be portrayed with a fast development underway, and the item will move
rapidly towards a full market acknowledgment.
Maturity: Here, the item is received almost totally by society and is usually moving toward a physical
point of confinement. Because of the strong rivalry among the real players in the market which is plainly
characterized at this stage, most of the resources now are spent on enhancing the generation processes
and making them less expensive. Thusly, oftentimes the products at this stage turn out to be totally
standardized and the innovations at this stage are considered incremental.
Discontinuity: At this phase the advancement occurs, as another S-Curve example can rise. Since the
previous item/industry reaches an era of maturity, there is an open door for another item to speak to the
innovators segment in the populace and they will start another item life cycle which is usually
considered as the Disruption.

UNIT FOUR: TECHNOLOGY AND COMPETITION

In many industries technological innovation is now the most important driver of competitive success.
The increasing importance of innovation is due in part to the globalization of markets. Foreign
competition has put pressure on firms to continuously innovate in order to produce differentiated
products and services. The importance of technology includes;

 Technology helps increase demand and lower prices

 Technology-based industries create jobs
 Technology-based businesses contribute more to the country’s international exports than other
types of businesses.
 Introducing new products helps firms protect their margins, while investing in process
innovation helps firms lower their costs.
 Technology helps firms develop and produce more product variants that closely meet the needs
of narrowly defined customer groups, thus achieving differentiation from competitors
 Improves productivity, processes and offering improvements.
 Boosts organizational effectiveness and efficiency.
 It enhances communication by encouraging dialogue and circulating the information people need
to know leading to a more cooperative, and more productive, environment.
 The future of many businesses depends upon their ability to innovate.

INNOVATION
Goals of Innovation
1) Improved quality
2) Improves productivity
3) 2. Creation of new markets
4) 3. Extension of the product range
5) 4. Reduced labor costs
6) Improved production processes
7) Reduced materials
8) Reduced environmental damage
9) Replacement of products or services
10) Reduced energy consumption
11) Conformance to regulations
12) Improve process and organizational efficiency
13) Increases revenue
14) Increases market share
15) Faster speed to market for products and services
16) Enhances employee engagement and retention
17) Increases customer loyalty
18) Reduce the risk of disruption by competitors
The first goal suggests that the most common reason for organizations to invest in changes to products,
processes, and services is to improve quality. Most of these goals range across 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 organization.

Innovation process
The process of innovation can be described in terms of the interactions between four key subprocesses.
•Idea generation
•Opportunity recognition
•Development
•Realization
•Learning

Idea Generation
The first stage in our perspective of the innovation process relates to the creative activity of generating
an opportunistic idea. This stage involves the continuous scanning of the internal and external
environment for threats and opportunities that might be developed into an innovation by the
organization. This stage involves mining the sources of innovation for new ideas and evaluating
solutions to identified problems. An organizational culture that encourages creativity and empowerment
can significantly support this phase of the process. The input typically stems from a technical insight
into a product or process or thoughts about a service. In some cases ideas arise from observed problems
that have occurred in the past or may occur in the future. Ideas can also be stimulated by the goals of the
organization or an unanticipated opportunity. Various stimuli can lead to the creation of an idea and
range from reading magazines and observing problems to visiting other organizations and having
informal discussions with colleagues and customers.

Opportunity Recognition
The second stage of the process is opportunity recognition, in which the opportunity of developing the
idea into a new product, process, or service is assessed and evaluated relative to other opportunities.
This phase of the process involves deciding which innovative ideas will be pursued by the organization
and which are deemed outside its interest. The undertaking of innovative actions is both expensive and
resource intensive for any organization, and even large organizations such as 3M and Intel need to
choose which ideas to pursue. How this decision is made can be complex and involves tradeoffs,
including correlation with the strategic goals and resources available to the organization, the
organization’s current capability, the mix of innovations already being developed, the actions of
competitors, and the emerging signals from the external environment. Similarly, this evaluation of
prospective innovations is not a onetime event but occurs periodically during the innovation process to
ensure that the organization is investing in positive innovations. Cooper (1986) refers to these decision
points as “stage-gates,” where unsuitable initiatives are eliminated to allow extra resources to be
directed toward more suitable innovations. Two types of error can occur at this phase of the process: An
idea that would have been successful for the organization may not be pursued, or an idea that will be
unsuccessful for the organization may be allowed to continue. The more damaging of these errors is the
latter because the development of this idea will consume scarce resources and prevent another beneficial
idea from being developed. In scenarios where a good idea is wrongly abandoned, it is likely that in a
supportive culture, this idea will recur at the idea generation phase. The difficulty in this phase of the
process is that the organization does not have a crystal ball to see into the future and therefore cannot
know for certain which ideas will be winners or losers. Members of the organization can only make the
most enlightened decision they can, based on available knowledge, and continue to periodically screen
their portfolio of developing innovations for appropriateness. As a consequence of this phase, ideas are
often improved, merged with other ideas, or in many cases shelved or abandoned. An important test for
an idea is that it match the goals of the organization and available resources, such as people and money.

Development
If an opportunity is recognized as appropriate for the organization, then the idea moves to a new stage
where it can be developed further. This phase involves the development of the idea or solution into a
potential innovation that is ready for launch to its internal or external market. The development of an
innovation can be highly resource intensive for any organization. The selection of innovations by an
organization is con - strained by the budget and the existing portfolio of innovative actions. Similarly,
certain innovations may require competencies and skills that are scarce or even absent from the
organization, and this scarcity can hinder the implementation of certain innovations. Organizations must
carefully manage the innovative actions, ensuring that they are adequately resourced to ensure success.
Part of managing the implementation of these actions is constant scanning of the external environment
for emerging trends that may alter the trajectory of the innovation. The development phase of the
innovation is usually undertaken as a team approach (because of the diverse competencies needed) and
involves making the initial idea tangible in a form that best meets market demands. Key activities of this
phase can include experimentation, design and development, testing, market analysis, and prototyping.
At the end of the development phase, the initial idea has been developed into a tangible product, process,
or service that the organization views as capable of meeting user needs. Many potential innovations wait
at the end of the development phase for market conditions to be right before they move to the realization
phase.

Realization
This phase of the innovation process relates to the launch to the market, which is where the customer
makes the final evaluation of the innovation. Understanding customer needs is essential to ensure that
the eventual offering to the market meets these needs. A strong alignment between the objectives of the
particular innovation and the needs of the customer increases the likelihood that the innovation’s initial
market adoption will be a success. This fact becomes most pronounced with respect to technology
innovations, where the organization must manage fulfillment of each of the customer segments across
the product life cycle (Moore, 1999). Although Figure 3.1 represents the realization phase as following
the development phase, in reality these phases overlap. Market information about customer needs is an
essential input to the development phase, and information about the innovation’s attributes is necessary
to begin educating and preparing the marketplace. The objective of the realization phase of the process
is to develop an innovation for the market that meets customers’ needs and is readily adopted. When the
organization is developing a process innovation, the market can be said to be internal. Consequently, the
realization phase encompasses activities such as commissioning, validation, and training to facilitate its
successful adoption.

Learning
Learning is the final subprocess in the innovation process. It requires the organization to analyze the
previous phases of the innovation process and identify areas where the process can be improved. In this
way, even innovative actions that are abandoned or end in failure can be beneficial because the
organization can learn from its mistakes and avoid repeating them in the future. Similarly, the new
knowledge acquired from undertaking the prospective innovations can also be used as input to the idea
generation phase that may lead to future innovations. Over time the organization’s effectiveness at
managing its innovation process improves, which will also increase the success of its future innovative
actions.

PRODUCT INNOVATION
 It involves new product and new characteristics of old products.
 A product innovation is the act of bringing a new to the market place that improves the range and
quality of products on offer
 The process that makes them may be much the same but the product has changed incrementally or
radically
 Product innovation may be tangible manufactures goods, intangible services, or a combination of the
two.
 Tangible product innovation that has had a very significant impact on the way people live and work
are personal computers, mobile phones, and microwave ovens.
 Product innovation is a type of innovation that is more noticeable for the consumer and it is related
either to the enhancement of a company’s older products, either to the development of new products
which are based on new technologies or which solve new needs of a consumer
 Product innovation occurs as a reaction to multiple factors – for example, a consumer needs are
determined by social, cultural or economic factors, while at a business and organizational level, product
innovation is performed when its purpose is the expansion to new market segments or the attainment of
competitive advantage.

New Product Development Process

Gap Identification Phase
Gap analysis is an important evaluation tool for those undertaking an innovation strategy. The gap
identification process compares where the organization is to where it wants to be, as well as where the
firm’s competitors are. The gap can be process oriented or product oriented; however, once a gap is
identified, the firm needs to address it or face the risk of being at a competitive disadvantage. The
environmental and internal systems analysis should help the organization identify a number of potential
gaps.
Concept Phase
The second phase in the innovation project framework is the definition of relevant concepts. The Project
Management Institute’s Body of Knowledge defines conceptualization as the process of
choosing/documenting the best approach to achieving the project objectives. To prepare the
conceptualization of the innovation project, managers need to:
1. State clearly the gap the project is going to address. This statement should include what the problem
consists of, the need to find a solution, and what the intention of the firm is.
2. Gather information about the nature of the innovation to be undertaken and its place in the gap
analysis results. This would include type of innovation, life cycle stage, complexity, and criticality of the
project to be undertaken.
3. Identify constraints. There are constraints in the environment and in the firm. The gap analysis should
help identify some of the resource and time constraints. However, customer input as well as the input of
other stakeholders should be sought.
4. Develop alternatives to address the issues identified by the gap analysis. By developing alternatives,
managers can develop a clearer understanding of how to solve the gap. In addition, the process of
developing alternatives may give the management other insights into ways to solve the gap.
5. Record the project objectives that emerge. If the previous four steps have been done correctly, the
objectives for the project should be clear. The objectives follow logically from the analysis and lay the
groundwork for defining the project parameters.
The concept phase should also define the complexity of the project. The more complex the project, the
more work needs to be done during this stage.

Definition Phase
The what, when, and who of the definition phase set forth the task, timing, and team makeup for the
innovation project. For a process innovation, the task would be to plan the conversion, the timing would
be a time objective with an endpoint with multiple checkpoints, and the team would include a project
manager and team members to coordinate the changeover to the new process. The targets of the
innovation project should emerge from the conceptualization of the project. When setting the objectives
of the project, the project team should make sure the goals are:
1. Specific and well-defined
2. Realistic and doable
3. Timed for achievability
4. Measurable in a realistic manner
5. Agreed on by the team and the management of the firm
6. The person responsible (the project manager) is identified and known to others.
It is also during this stage that the organization is moving beyond looking at what needs to be done, and
identifying what will be done. Therefore, the relevant gap analysis, the results that have spurred the
development of a project team to undertake an innovative activity, and the list of potential alternatives
should be brought together to begin the project records. These records will be instrumental in doing the
post-project evaluation. Recall that part of evaluation is are you where you thought you would be. The
definition stage is also a key place for the organization to ask if this is where it wants to go. After all, it
is after this stage that the escalation of commitment of resources really begins.

Design Phase
During the design phase, the firm begins to decide what it needs to meet the strategic goals, who will be
responsible for the project, and how the process of innovation will take place. The definition phase has
established the targets and standards for the project. The first question in the design phase concerns
feasibility: Can the project be done? If so, the design phase can begin. There are two key types of
individuals who must be on the team if design is to be viable concept generators and concept
implementers. Concept generators throw out ideas about how to solve the problems, and concept
implementers focus on how to accomplish the ideas. In design, it is important to begin with a concept of
the whole and then design components to fit into the whole. The definition phase should give the
innovation team the concept of the whole, and the design phase should fill in the parts.
The individual or individuals in the design phase need to possess three talents:
1. The ability to recognize future trends while contributing to the designs for their firm
2. The ability to recognize the potential commercial significance of their own R&D settings as well as in
other interactions in their life
3. The ability to integrate the commercial and technical worlds. This requires knowledge of what is
possible and what is wanted

Development Phase
The development phase begins the actual effort to implement the innovation. Until now, laying the
groundwork has been the focus. The abstract phase is completed, and now the innovation team needs to
enact the first trial run of the product or process. The more planning and thought that go into design, the
fewer problems should arise during this phase. However, that does not mean everything will go
smoothly. This phase and the next are led by engineering design and manufacturing. The steps in
development are:
1. Define a method for building the product or implementing the process. A prototype should be built
and tested against the design requirements.
2. Evaluate the firm s resources for best practice capabilities. This requires continuous evaluation and
iteration of the design. The goal is to maximize the firm s ability to produce a desirable deliverable
(product or process).
3. Develop a list of materials needed and a design for routing those materials to determine the actual
cost. Until a prototype is built, tested, redesigned, and rebuilt that meets acceptable criteria, the costs are
estimated. Only when there is a clear set of inputs should the vendor-supply chain be determined and
final costs calculated.
4. Determine the ability of the firm to introduce the innovation along with all of the other products and
processes in the firm. Are there synergies with other products and processes? Will the innovation take
away resources needed in other parts of the firm? If the capacity to implement the innovation is
insufficient, then capital resources need to be committed or the product mix needs to be changed.
Newness in one area of the firm can affect a number of other areas. Ideally, managers addressed this
issue earlier, but during the development phase, it will become clearer what is needed for the innovation.
5. Make sure common sense is still the driving force in decision-making. As the prototype is being
developed and tested, the tendency is to become too enthusiastic. This often results in escalation of
commitment without solid reasons and analysis for the decisions.
6. Market for when the capacity to produce the product or process is available. Many times, firms will
announce an innovation, and then the delays in producing it lead people to wonder if it will ever happen.
In the software development industry such delays in meeting the announced release date occurs often,
although it is not a desirable outcome.
7. Determine the required profit margin, market size, and profitability. These need to be part of the
decision before full-scale launch. Too often, firms make a great new product, sell a bunch, and then
wonder why the bottom line does not grow. This is especially true in small entrepreneurial firms. If the
product or process meets the criteria of the definition and design and the costs and returns look good for
launch, then the firm should move to the application phase.
Application Phase
The application phase concerns the installing/releasing the new process or products for the whole
organization. This is the do of the innovation project process. If it is a process innovation, then the
installation of the process should be ready for all parts of the organization that will be making the
change. If the innovation is a new product then the product (and the associated activities) is ready for
full production. As the project team turns over the innovation to the appropriate functions of the firm,
some debugging may need to take place. However, as handover begins, it is important to begin project
closeout. In preparing for the innovation project closeout, several issues are likely to emerge:
1. Burnout or the loss of interest after working the project is common at the end of a project. Because of
burnout, the post-project evaluation is often overlooked. Burnout can also lead team members not to
follow through on debugging. The developers of the innovation have the most knowledge of capabilities
and potential ways to fix problems, and they should remain involved until the processes are running
smoothly.
2. For project team members, concern about what they will be doing next may be distracting. If the team
member knows what the next project will be, then excitement over the newness may cause some neglect
of the application and post-project review phases. If the team member does not know if there is another
assignment or what it will be, anxiety may lead to a failure to focus on finishing the current project.
Because project teams are often cross-functional, there is a loss of social network and work group that
needs to be addressed as the launch takes place.
3. In most projects, bugs (problems) will still exist. This causes frustrations as the developers and
customers try to find solutions. In addition, following the innovation launch there is commonly a
reallocation of resources from the team. If unanticipated bugs arise, then there may be insufficient
budget
and resources to fix them.
4. Documentation for the product needs to be compiled. This compilation of documents will aid in the
evaluation phase. Often, toward the end of the project, the documentation is not as clear because
everyone knows what is happening. However, without the documentation, institutional memory can be
lost.
5. Comparison of goals, definition, and schedules to actual outcomes as the project ends. How closely
does the final product or process match the definition of the project and the design?
6. Contractual commitments finalized with vendors, suppliers, and customers (both internal and
external).
7. The last part of application is to transfer responsibilities to those in the organization who will take
over the innovation project team s outcome. For a new product, for example, the responsibility will
probably move to operations for the manufacturing process. The development of the ongoing
manufacturing process becomes a new innovation project. The documentation of the project team should
be helpful in making this transfer.

Post-Project Review Phase

The last phase of the innovation project process is the post-project review. This involves reviewing the
objectives of the project and the outcomes in more detail, developing a set of lessons learned, the actual
staffing of the project, final assessment, and the delivery of final reports. A mature post-project review
process requires a culture that is always looking for ways to improve. The reviews include successes,
failures, and surprises. The when, what, why, and how of the project needs to be understood.
The final phase of the innovation project is often overlooked because:
1. The documentation for the project has not been well maintained, and memory of the team members is
faulty.
2. The project is over, and everyone is ready to move on to the next project.
3. There are barriers to sharing knowledge. Some cannot see how the problems and solutions in one
project can be generalized. In addition, because each project is unique, the managers see the lessons
learned as unique.
4. Often, those involved in innovation are forward moving and act individually rather than completing
the project-team closure activities. Reflection and consideration of what was and what might have been
are not part of what the individual is now doing. However, such reflection allows the development of
lessons learned to apply to future projects.
5. Management does not allow the time for post-project review. If the project team recognizes these
potential problems and works to overcome them, the post-project review will be more successful and
more useful to the firm. The entire project team should develop the final report.
PROCESS INNOVATION
It refers to new way of doing something. The products may be the same but the way of producing is
new, better, more efficient or more reliable. Process innovation is probably the least attractive form of
innovation. It is the combination of facilities, skills, and technologies used to produce, deliver, and
support a product or provide a service. There are many ways business processes can be designed or
improved. Process innovation can include changes in the equipment and technology used in
manufacturing (including the software used in product design and development), improvement in the
tools, equipment used, techniques, and software solutions used to help in the supply chain and delivery
system, changes in the tools used to sell and maintain goods, as well as methods used for developing the
product or even within the methods used by the employee.
Good business processes enable companies to satisfy both customers and employees. Good business
processes can drive reliable and consistent results and support company growth. A business process is a
sequence of steps progressing toward a business goal. This sequence of steps can be clearly depicted
using a flowchart and may also be referred to as a business method. Developing and implementing
business processes can help a company improve efficiency, consistency, and quality. It can also reduce
costs and risks. Business processes occur at all organizational levels and some are visible to customers,
while others are not.
Types of Business Processes
Management Processes: The processes that plan, organize, coordinate and control all the functions of the
business.
Operational Processes: The processes that constitute the core business of the organization and create the
primary value stream.
Supporting Processes: The processes that support the core processes. They help the business create an
environment where the core processes can work better. Examples include accounting and technical
support.
Often processes are documented and taught to employees. Employees are expected to follow the
business processes as the processes support the company brand, function, mission/vision/values/goals,
and service objectives. A great example of a company using processes to streamline operations and
maintain consistency and quality is McDonald’s fast-food restaurant. McDonald’s operating processes
would include taking orders, making food, and serving it to the customers. The processes for making
fries, burgers, and pies are each documented and employees are trained on these processes. Machines
are used to cook and warm food and timers are used to enable employees to cook each hamburger or
Egg McMuffin exactly the same way each time for every customer.
A simple business process might include the steps an employee follows to take a pizza order over the
phone or the steps a college registrar’s office takes to enroll a student in a course. More complex
processes might include the steps required to purchase new medical equipment for a hospital, the steps a
furniture company follows to manufacture their most popular desk or the steps an executive chef takes to
prepare a dinner for six customers.
New employees have a good chance of job success once they learn the business processes. Processes in
the kitchen at a restaurant might utilize ingredients, utensils, cooking equipment, recipes, etc. Processes
in an office might utilize computers, software, office space, people, documents, etc. Processes in a paper
factory might utilize people, machines, safety equipment and procedures, raw materials such as
pulp/paper, etc. Most big companies have hundreds of interconnected business processes. Knowing how
to design, manage, and improve business processes gives companies the power to manage and grow the
business.
Good business processes can improve customer satisfaction while missing or badly designed processes
can have a negative effect on customer satisfaction. Assume you are a student at a college and you wish
to add another course to your schedule, which includes paying additional fees. If there is a good process
in place, all employees and computer systems you interact with consistently guide you in the same
direction in order for you to complete the process of adding and paying for an additional course. If the
process is not clearly designed or it is missing, then employees will be confused and may have their own
personal way of doing tasks and systems may not be designed for self-service tasks that enable you to
add a course to your timetable.
Business Process Requirements
A good business process meets the following requirements.

 Provides clear instruction

 Answers frequently asked questions
 Teaches new things
 Measures success
 Provides corrective actions

Why do bad business processes exist?

 Assumptions. Often companies assume they know what customers want. It is important to challenge
these assumptions through research and analysis.
 Ambiguity. Employees are uncertain of the process. Maybe the process needs more clarification.
 Miscommunication. The process may not be communicated to employees and employees develop
their own processes.
 Misalignment. Advertising and actions are not aligned with the goals of the process.

Since processes are interrelated, each process should consider its relationships with other processes.
Good business processes always need to be looking forward and require periodic review and revision to
keep up with changes in the internal and external business environments. If a company experiences
massive growth, will the processes still be effective and efficient? If a process is good at supporting 20
customers, does it still work when supporting 200 customers? Some processes cannot be changed
significantly due to a lack of availability of technology and tools. Maybe the steps in the process are not
the problem, perhaps the company tools and technology need to be improved. Companies need to ensure
their processes are built for both present demand and future growth; that processes are scalable.
Lack of a good process can lead to inconsistency, time loss, employee frustration, customer frustration
and dissatisfaction, lost revenue, etc. It is important to have good processes in place and ensure your
staff understand these processes and apply them consistently. Without a good business process
company growth and success are difficult to achieve.
Not only is it important to have processes but it is also equally important that these processes be
effective and efficient in reaching the goal. If the goal is to add a course to your college timetable, then
the process and procedures you follow to do that should help you obtain that goal (effective) and should
do it in a timely and user-friendly way (efficient). When processes are created with these things in
mind, they increase employee effectiveness and efficiency, maintain consistency and quality, and
improve customer satisfaction. Customers continue to shop with a business because of reliability in
product or service quality, price, design, etc. Employees become good at their jobs because they follow
the business process they were given. Once good processes are established at one business location, the
organization can adopt the same processes at multiple locations (just like McDonald’s does).
Cow Path Theory
Cow Path Theory shows a cow zigging and zagging around a tree, fence, and rock to get to the water
supply. Employees follow the Cow Path when they should be creating a new, more efficient path. The
Cow Path Theory is a theory that many organizations have processes they have been following for years
and may not notice that these existing processes may no longer be efficient or effective. Employees may
continue to follow the old, outdated processes because they are used to them and don’t wish to put in the
effort to learn something new, or they don’t feel it is their job to question the processes that have been in
place for many years.
Implement a Process Improvement Plan
Given how process improvements deliver a range of organizational benefits from better communication
to increased profitability, it’s essential to know how to implement a process improvement plan. Listed
below are the steps to do so.
Identify the improvement opportunity. Map the current process. Identify what is not working well.
Obtain stakeholder buy-in. Clarify stakeholders’ roles and degree of involvement with the process
change. Explain the rationale for change.
Design the process improvement plan. Determine the changes required to improve the process and
decide how you will measure the effectiveness of the changes, evaluate any risks, and identify how the
changes will affect the customer experience; for example, introducing a technical solution to streamline
the workflow helps, particularly if the solution automates many of the process steps. Transforming
processes affects an organization to varying degrees depending on the extent of the changes. If the
process improvement is larger than small adjustments affecting a single team, project planning may be
needed with a full project plan incorporating the five project management process groups. This includes
identifying budgets to cover costs like training and any additional resource requirements needed to
execute the changes.
Test the changes. Often when designing new processes, a company might test in a single department at a
single location before implementing the changes in all departments at multiple locations, or before
integrating a new technology system with an old technology system. Take time to test thoroughly and
compile measurable results for analysis. Make adjustments as needed, then when you are sure the new
process works according to plan then you can roll it out across the organization.
Monitor and optimize. Even after thorough testing, process improvements require daily monitoring in
the early weeks of a rollout to catch any issues that may have been missed during the test phase. The
monitoring should compare the results of the improved process against the goals identified at the start of
the project. Collect more feedback from stakeholders and continue to optimize until you have met or
exceeded all benchmarks for the process.
Once a company improves a process, the reality is that it must review the process again in the future.
Business goals, market forces, and new technologies evolve, making established processes and
procedures inefficient or obsolete. Rather than execute a big project whenever a change is required, most
organizations adopt an approach of small, iterative, improvements that happen routinely over time.
Tools and Techniques for Improving Processes
The tools and techniques most commonly used in process improvement are:

 Problem-solving methodology, such as DRIVE

 Process mapping
 Process flowcharting
 Force field analysis
 Cause & effect diagrams
 CEDAC- Cause and Effect Diagram with the Addition of Cards
 Brainstorming
 Pareto analysis
 Statistical process control (SPC)
 Control charts
 Check sheets
 Block Diagrams
 Flowcharts
 Bar charts
 Scatter diagrams
 Matrix analysis
  Dot plot or tally chart
 Histograms
The most commonly used business process diagramming tools are Business Process Modeling Notation
(BPMN), Data Flow Diagram (DFD), and the Unified Modeling Language (UML). BPMN (Business
Process Modeling Notation) is a graphical method of representing business processes within a business
process diagram. BPMN diagrams help the whole team see the flow of the process. For example, the
process improvement team may be a cross-functional team consisting of various stakeholders, such as
technical personnel who manage Information technology, managers responsible for the process as well
as managers of other departments who may be affected by the process change, employees who apply the
process, and possibly users (customers, clients, students).
Organizational innovation:
 It finds new ways of structuring and managing people.
 The product and process may be same but the way of organizing the people
has changed
 In traditionally organized companies, ideation, idea generation and
business innovation often fail due to structural problems.
 These challenges can be mastered through organizational innovation
 Although companies invest time and money to establish an idea management and innovation
management system, define innovation processes and measure innovation, structural barriers prevent
success.
 Structural problems are:
 Political problems and conflicts within the company
 Destructive criticism, destructive competition and destructive pressure
 Strict control by management
 An excess of formal structure and procedures
 Precisely defined processes that prescribe what is to be improved by whom and with what methods.
 Organization innovation provide the solution for structural problems.
 With the help organizational innovation procedures, HR department, Maintenance department and
other departments working together for a common output.

UNIT FIVE: VALUE CHAINS AND ORGANIZATIONS.

A value chain is a concept describing the full chain of a business's activities in creating a product or
service from initial receipt of materials through its delivery to market. The value chain framework
encompasses five primary activities -- inbound operations, operations, outbound logistics, marketing and
sales, and service -- and four secondary activities -- procurement and purchasing, human resource
management (HRM), technological development and company infrastructure. The value chain concept
emerged in 1985 when Harvard Business School professor Michael Porter described it in his book,
Competitive Advantage: Creating and Sustaining Superior Performance.
A diagram of a value chain's five primary activities and four secondary activities

Primary value chain activities

Primary activities contribute to a product's or service's physical creation, sale, maintenance and support.
These include the following:
Inbound operations. This is the internal handling and management of resources coming from outside
sources, such as external vendors and other supply chain sources. These outside resources flowing in are
called inputs and may include raw materials.
Operations. These are activities and processes that transform inputs into outputs -- the product or service
being sold to customers for a higher price than the cost of materials and production, generating a profit.
Outbound logistics. This is the delivery of outputs to customers. Processes involve systems for storage,
collection and distribution to customers. This includes managing a company's internal systems and
external systems from customer organizations.
Marketing and sales. Activities such as advertising and brand building, which seek to increase visibility,
reach a targeted audience and communicate why a consumer should purchase a product or service.
Service. Customer service and product support activities reinforce a long-term relationship with those
who have purchased a product or service.
As management issues and inefficiencies are relatively easy to identify here, well-managed primary
activities are often the source of a business's cost advantage. This means the business can produce a
product or service at a lower cost than its competitors.
Secondary activities
Secondary activities support the primary activities discussed in the previous section and include the
following:
Procurement and purchasing. This involves finding new external vendors, maintaining vendor
relationships, and negotiating prices and other activities needed to obtain materials and resources used to
build a product or service.
HRM. The management of human capital includes functions such as hiring, training, building and
maintaining an organizational culture, as well as maintaining positive employee relationships.
Technology development. Activities like research and development, IT management and cybersecurity,
as well as anything that builds and maintains an organization's use of technology fall in this category.
Company infrastructure. This includes legal, general management, administration, accounting, finance,
public relations and quality assurance activities.
Benefits of value chains
The value chain framework helps organizations identify sources of their positive or negative cost
efficiency. Conducting a value chain analysis can help businesses with the following:

 Support decisions for various business activities.

 Diagnose points of ineffectiveness for corrective action.
 Understand linkages and dependencies between different activities and areas. For example -- issues
in HRM and technology are broadly impactful.
 Optimize activities to maximize output and lower costs.
 Establish a cost advantage over competitors.
 Understand core competencies and areas of potential improvement.

UNIT SIX: TECHNOLOGY STRATEGY AND MANAGEMENT.

A strategy is a vision and plan for the future.

The first step in formulating a company’s technological innovation strategy is to assess its current
position and define its strategic direction for the future. Here we review some of the basic tools used in
strategic analysis to assess the firm’s current position and help chart its direction for the future. These
tools help the manager answer such questions as:

• What threats and opportunities are most pressing in the firm’s environment?
• What are the firm’s key strengths and weaknesses?
• Does the firm have any sources of sustainable competitive advantage?
• What are the firm’s core competencies, and what kind of value propositions do those core
competencies offer to customers? How do managers want those value propositions to evolve?
• What key resources and capabilities does the firm need to develop or acquire to meet its long-term
objectives?
A coherent technological innovation strategy both leverages and enhances the firm’s existing
competitive position, and it provides direction for the future development of the firm. Formulating a
technological innovation strategy first requires an accurate appraisal of where the firm is currently. It
then requires articulating an ambitious strategic intent—one that creates a gap between a company’s
existing resources and capabilities and those required to achieve its intent. The ability of the firm to
cohesively leverage all its resources around a unified vision can enable it to create a competitive
advantage that is very difficult for competitors to imitate.

ASSESSING THE FIRM’S CURRENT POSITION

To assess the firm’s current position in the marketplace, it is useful to begin with some standard tools of
strategic analysis for analyzing the external and internal environment of the firm.

External Analysis
The two most commonly used tools for analyzing the external environment of the firm include Porter’s
five-force model and stakeholder analysis.

Porter’s five-force model entails assessing the degree of existing rivalry, threat of potential entrants,
bargaining power of suppliers, bargaining power of customers, and threat posed by substitutes. Recently
Porter added a sixth force, the role of complements.

Stakeholder analysis involves identifying any entity with an interest in the firm, what it wants from the
company, and what claims it can make on the company.

Internal Environment
To analyze the internal environment, firms often begin by identifying strengths and weaknesses in each
activity of the value chain. The firm can then identify which strengths have the potential to be a source
of sustainable competitive advantage. The SWOT analysis is used to analyze the internal environment.

IDENTIFYING CORE COMPETENCIES AND CAPABILITIES

A company’s core competencies are typically considered to be those that differentiate it strategically. A
core competency is more than just a core technology. A core competency arises from a firm’s ability to
combine and harmonize multiple primary abilities in which the firm excels into a few key building
blocks of specialized expertise.

Competencies often combine different kinds of abilities, such as abilities in managing the market
interface (e.g., advertising, distribution), building and managing an effective infrastructure (e.g.,
information systems, logistics management), and technological abilities (e.g., applied science, process
design).

CORE AND DISTINCTIVE TECHNOLOGICAL COMPETENCIES

Core Competence of the corporation

Andrews (1971) introduced the concept of core competence and defined it as “what the company can do
particularly well”. A capability that is central to a firm’s value-generating activities.
Prahalad and Hamel (1990), explained that core competencies are the primary competencies that a firm
leverage to compete, although the competencies may often be difficult to identify or overshadowed by
the importance of the firm’s products. Using the analogy of a tree, Prahalad and Hamel explained that
core competencies are like the root system that “provides nourishment, sustenance, and stability”
Distinctive Competence

A capability that is visible to the customer, superior to other firms’ competencies to which it is
compared, and difficult to imitate.
Distinctive competencies help a firm to stand out in its markets when its competencies are superior to its
competitors’ competencies. Firms can accomplish this goal by involving factors such as brand loyalty,
successful technology, causal ambiguity (i.e., difficulty disentangling what the resource is or how it is
created), and economic deterrence.
Technological competence is ability to create and use a particular field of technology effectively, which
is gained through extensive experimentation and learning in its research, development and employment
in production.

Evaluate Core Competencies, Innovations

Several academics and practitioners to introduce conceptual models to evaluate the competences of their
businesses. some of the models are briefly discussed.

Production/Manufacturing Competence Model

Cleveland et al. (1989) developed a conceptual model to identify competence by linking production
process with business strategy. In this model, production competence is defined as the capability to
perform a particular business strategy against nine key areas of production performance such as quality,
delivery, lead time, etc.
The strengths of these performance areas are evaluated against the degree of production process
sophistication, and simultaneously the importance of the process capabilities is assessed against
alternative business strategy.

The Technical Subsystem Model

Tampoe (1994) defines an organisation's core competence as "a technical or management subsystem
which integrates diverse technologies, processes, resources and know-how to deliver products and
services which confer sustainable and unique competitive advantage and added value to an
organisation". He advocates that core competence can be reflected on the organisation technical system
which comprises both the creative and the implementation capability. The core competence of an
organization should be:

• essential to business survival in the short and long term,

• invisible to competitors,
• difficult to imitate,
• unique to the organization,
• comprises skills, resources, and processes,
• has a degree of durability,
• greater than an individual's competencies,
• essential to developing both core products and end products,
• essential to implementing the organization’s strategic vision,
• essential to the organization’s strategic decisions,
• has market and commercial value,
• few in number.

Based on his view, he proposed a hierarchical framework that aims to identify and exploit core
competence in a structured manner. The sequence of steps in the Tampoe model is explained as follows.

The identification process starts by establishing the organisation revenue stream and the products and
services it offers. Only those products which make a significant contribution to the organization’s
revenue, profit and strategic targets are determined and selected for analysis. Those candidate products
are then analyzed to identify core products and services which are then further separated into essential
components to determine the basic technologies, people skills, processes and strategic assets that play an
important role to create them. At the end of this stage, the core competences of the organisation become
apparent, as shown in Fig. 2.1. The findings are consequently tested against secondary products and
services to ascertain whether they are generated from the identified core competences and whether there
are new markets in which these skills can be deployed. If, for instance, the test results do not appear
associated with the determined core competences, then they would be potentially subject to divestment
or disposal.

Strategic Intent
A firm’s purpose is to create value. This entails more than just improving operations or cutting costs; it
means leveraging corporate resources to create more performance for customers, more well-being for
employees, and more returns for shareholders. This is accomplished through developing new businesses
and markets, and leveraging corporate resources, all guided by the firm’s strategic intent. A company’s
strategic intent is a long-term goal that is ambitious, builds upon and stretches the firm’s existing core
competencies, and draws from all levels of the organization.

Once the firm articulates its strategic intent, managers should identify the resources and capabilities that
the firm must develop or acquire to achieve its strategic intent.

How to Put Technology into Corporate Planning

Andrews (1980) a respected author, and Harvard Business School professor presents his
definition of corporate strategy as:
Corporate strategy is the pattern of decisions in a company that determines and reveals its objectives,
purposes, or goals, produces the principal policies and plans for achieving those goals, and defines the
range of business the company is to pursue, the kind of economic and
human organization it is or intends to be, and the nature of the economic and non-economic contribution
it intends to make to its shareholders, employees, customers, and communities.
Khalil while discussing business and technology strategy defines the business strategic management
process as consisting of three interrelated components or functions:
• Strategic planning which is the process of strategy formulation.
• Strategic implementations which is the implementation of operational action plans and strategically
spawned projects.
• Strategic evaluation which refers to the management feedback mechanisms, the broad organizational
learning process and refinement and improvement initiatives.
Strategy also manifests itself at, and is distinguished by the various levels of the organization: corporate
level, business unit level and functional level.
Ford (1988) defines technology strategy as “that aspect of strategy which is concerned with exploiting,
developing and maintaining the sum total of the company’s knowledge and abilities”. Burgelman et al
state that technology strategy is a foundation where questions relating to technological competencies,
investment levels, technology sourcing and specific technology selection can be answered from.
Vernet and Arasti (1999) refer to technology strategy as the firm’s priority in technology development
orienting the firm’s future actions in technology issues.
Technology strategy thus occupies itself with the strategic handling of technologically related issues
with the sole purpose of enabling the attainment of the firm’s established vision.
Factors Involved in Technology Strategy
The technology strategic process of a firm like any other strategy can be broken down into three
principal activities.
The three components are:
1. Planning
2. Implementation
3. Evaluation and control
Planning
Planning is defined as the systematic gathering of information that leads to the generation of feasible
alternatives for the firm, selection of the most appropriate action among the alternatives, and ultimately
to the setting of direction for the firm. Activities in the planning process include;
1. Data gathering
2. Mission generation
3. Objective setting
4. Strategy establishment
Implementation
After the strategic planning (information gathering, mission generation, objective setting, and strategy
selection), the firm must implement the plans. once the firm has gathered information; identified a gap in
the market; and developed a mission, goals, and strategy to be successful in that market, it will
ultimately need to implement its strategy. Activities in a firm are not isolated from each other. The
actions in one area have implications for employees in other sections of the business. The result is that
the implementation of the strategy requires the firm to conduct activities that are consistent with the
given strategy.
The firm s common implementation concerns include:
  Structure
 Employee hiring and relations
 Decision making
 Communication
 Culture
 Employee incentives
Evaluation and Control
Once the strategy is implemented, the firm must make sure that its strategy is working. The firm,
through planning, establishes goals and objectives. After the strategy is implemented, the firm must
ensure that the goals and objectives are met. If they are not met, then adjustments are required. This
process is referred to as evaluation (comparison of actual outcomes with expected outcomes) and control
(adjustments, as needed). The firm must determine why it is not meeting its goals and objectives and
either change what it is doing or change what it wants to accomplish. Determining if the goals are not
met is a straightforward evaluation process. The control process is more difficult and frequently requires
revisiting the planning process. The feedback then must be given to the appropriate areas in the firm and
changes pursued.

UNIT SEVEN: MANAGEMENT OF TECHNOLOGY AND INNOVATION

Technology management is becoming an accepted management practice, and in some cases even the
equal of current financial management methodologies. With the increase in importance of technology, it
is becoming prudent for senior management to be more aware of new technologies. New technologies
have the ability to completely disrupt established industries, and make most, if not every, of their
competencies obsolete. Conversely, a specific technology identified early enough and developed into a
market leader may be extremely profitable. The management of technology has been developing as a
formal disciple over the past decade or two. Compared to other management disciplines it is in its
infancy.
The importance of managing technology

The US National Task Force on Technology has listed five specific reasons individuals and
organizations should be concerned about the management of technology.
1. The rapid pace of technological change demands a cross discipline approach if economic
development is to occur in an effective and efficient manner to take advantage of technological
opportunities.
2. The rapid pace of technological development and the increasing sophistication of consumers have
shortened product life cycles. The result of these factors is a need for organizations to be more proactive
in the management of technology.
3. There is a need to cut product development times as well as to develop more flexibility in
organizations. The lead-time from idea to market is being reduced by the emergence of new or
altered technologies.
4. Increasing international competition demands that organizations must maximize competitiveness by
effectively using new technologies.
5. As technology changes, the tools of management must change, but the process of determining what
those new tools should be is in its infancy.

In Kenya, technology and innovation is controlled by the science, technology and innovation act, 2013,
which establishes the National Commission for Science, Technology and Innovation (NCSTI).
The functions of the Commission are to—
(a) develop, in consultation with stakeholders, the priorities in scientific, technological and innovation
activities in Kenya in relation to the economic and social policies of the Government, and the country’s
international commitments;
(b) lead inter-agency efforts to implement sound policies and budgets, working in collaboration with the
county governments, and organizations involved in science and technology and innovation within Kenya
and outside Kenya;
(c) advise the national and county governments on the science, technology and innovation policy,
including general planning and assessment of the necessary financial resources;
(d) liaise with the National Innovation Agency and the National Research Fund to ensure funding and
implementation of prioritized research programmes;
(e) ensure co-ordination and co-operation between the various agencies involved in science, technology
and innovation;
(f) accredit research institutes and approve all Scientific research in Kenya;
(g) assure relevance and quality of science, technology and innovation programmes in research
institutes;
(h) advise on science education and innovation at both basic and advanced levels;
(i) in consultation with the National Research Fund Trustees, sponsor national scientific and academic
conferences it considers appropriate;
(j) advise the Government on policies and any issue relating to scientific research systems;
(k) promote increased awareness, knowledge and information of research system;
(l) co-ordinate, monitor and evaluate, as appropriate, activities relating to scientific research and
technology development;
(m) promote and encourage private sector involvement in scientific research and innovation and
development;
(n) annually, review the progress in scientific research systems and submit a report of its findings and
recommendations to the Cabinet Secretary;
(o) promote the adoption and application of scientific and technological knowledge and information
necessary in attaining national development goals;
(p) develop and enforce codes, guidelines and regulations in accordance with the policy determined
under this Act for the governance, management and maintenance of standards and quality in research
systems; and
(q) undertake, or cause to be undertaken, regular inspections, monitoring and evaluation of research
institutions to ensure compliance with set standards and guidelines.
The Art of High Technology Management
Outstanding high-technology firms tend to score high in most of the six categories below, while less
successful ones usually score low in several. The categories include;
1) Business focus;
Many leaders in high-technology fields, such as computers, aerospace, semiconductors, biotechnology,
chemicals, Pharmaceuticals, electronic instruments, and duplicating machines, realize the great bulk of
their sales either from a single product line or from a closely related set of product lines.
When the company grows and establishes a secondary product line, it is usually closely related to the
first.
Another policy that strengthens the focus of leading high-technology firms is concentrating R&D on one
or two areas. Such a strategy enables these businesses to dominate the research, particularly the more
risky, leading-edge explorations.
Another other way that a company demonstrates a strong business focus is through consistency in the set
of priorities and a pattern of behavior that is continually reinforced by top management.
(2) Adaptability
Successful firms balance a well-defined business focus with the willingness, and the will, to undertake
ajor and rapid change when necessary. Concentration, in short, does not mean stagnation. Immobility is
the most dangerous behavioral pattern a high-technology firm can develop: technology can change
rapidly, and with it the markets and customers served. Therefore, a high-technology firm must be able to
track and exploit the rapid shifts and twists in market boundaries as they are redefined by new
technological, market, and competitive developments.
To undertake such wrenching shifts in direction requires both agility and daring. Organizational agility
seems to be associated with organizational flexibility — frequent realignments of people and
responsibilities as the firm attempts to maintain its balance on shifting competitive sands.
(3) organizational cohesion
The key to success for a high-tech firm is not simply periodic renewal. There must also be cooperation
in the translation of new ideas into new products and processes. As Ken Fisher, the architect of Prime
Computer’s extraordinary growth, puts it, “If you have the driving function, the most important success
factor is the ability to integrate. It’s also the most difficult part of the task.”
To succeed, the energy and creativity of the whole organization must be tapped. Anything that restricts
the flow of ideas, or undermines the trust, respect, and sense of a commonality of purpose among
individuals is a potential danger. This is why high-tech firms fight so vigorously against the usual
organizational accoutrements of seniority, rank, and functional specialization. Little attention is given to
organizational charts: often they don’t exist.
Younger people in a rapidly evolving technological field are often as good — and sometimes even better
— a source of new ideas as are older ones. In some high-tech firms, in fact, the notion of a “halflife of
knowledge” is used; that is, the amount of time that has to elapse before half of what one knows is
obsolete.
Communication is key in improving cohesion In high-tech organizations. One way to combat the
development of such distance is by making top executives more visible and accessible.
A policy of conscious job rotation also facilitates this sense of communal-ity. In the small firm,
everyone is involved in everyone else’s job: specialization tends to creep in as size increases and
boundary lines between functions appear. If left unchecked, these boundaries can become rigid and
impermeable. Rotating managers in temporary assignments across these boundaries helps keep the lines
fluid and informal, however.
(4) Entrepreneurial culture
While continuously striving to pull the organization together, successful high-tech firms also display
fierce activism in promoting internal agents of change. Indeed, it has long been recognized that one of
the most important characteristics of a successful high-technology firm is an entrepreneurial culture.
(5) Sense of integrity
Successful high-tech firms tend to exhibit a commitment to long-term relationships. The firms view
themselves as part of an enduring community that includes employees, stockholders, customers,
suppliers, and local communities: their objective is to maintain stable associations with all of these
interest groups.
Although these firms have clear-cut business objectives, such as growth, profits, and market share, they
consider them subordinate to higher order ethical values. Honesty, fairness, and openness — that is,
integrity — are not to be sacrificed for short-term gain. Such companies don’t knowingly promise what
they can’t deliver to customers, stockholders, or employees. They don’t misrepresent company plans and
performance. They tend to be tough but forthright competitors. This commitment to ethical values must
start at the top, otherwise it is ineffective.
(6) “Hands-on” top management.
CEOs of successful high-technology firms are usually actively involved in the innovation process to
such an extent that they are sometimes accused of meddling. Good high-tech managers not only
understand how organizations, and in particular engineers, work, they understand the fundamentals of
their technology and can interact directly with their people about it. This does not imply that it is
necessary for the senior managers of such firms to be technologists (although they usually are in the
early stages of growth). What appears to be more important is the ability to ask lots of questions, even
“dumb” questions, and dogged patience in order to understand in-depth such core questions as: (a) how
the technology works; (b) its limits, as well as its potential (together with the limits and potential of
competitors’ technologies); (c) what these various technologies require in terms of technical and
economic resources; (d) the direction and speed of change; and (e) the available technological options,
their cost, probability of failure, and potential benefits if they prove successful.