Technology And Innovation-2006 Ind

IMMG 12072

Industry and Technology Technology and Innovations

Dr. Chamli Pushpakumara Dept. of Industrial Management University of Kelaniya

Technology The knowledge of the manipulation of nature for human purposes  Not simply machines  Technology can be defined as all knowledge, products, processes, tools, methods, and systems employed in the creation of goods or in providing services. 

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Technological development and national competitiveness Scientific discoveries and technological breakthroughs have potential for changing the way people live and do business.  These can spur major economic growth and change the socioeconomic conditions of countries 

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The competitiveness pyramid High standard of living

Trade

Productivity

Investment in productive facilities (Factories, R & D, technology)

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Evolution of the production technology          

Agricultural society Industrial revolution Frederic Taylor – Scientific management Henry Ford – Assembly line, economies of scale Frank & Lillian Gilbreth – Motion study WW I – planning, inventory control, queuing, modelling Deming & Juran – Quality concepts, SQC WW II- material handling systems, productivity improvements, OR Digital computer, robotics ICT, genetic engineering etc

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Evolution of the product technology 18 C – steamboat, steam-powered locomotive  19 C – radio signal, power generation and transmission  20 C – automobile, air conditioner, airplane,  ICs, computers, laser products, satellites, ICT … 

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Technology and its impact on the activities of the firm A firm is an open system that transforms input into outputs, adding ‘economic value’ in that transformation (Porter).  A number of technologies are embodied in this value chain directly impacting the performance and competitiveness of a firm. 

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resentative technologies in a firm’s value c Transportation technology Material handling technology Storage and preservation technology Comm. system technology Testing technology Info. system technology

Basic product technology Materials technology Machine tool technology Material handling technology Packaging technology Maintenance methods Testing technology Building technology Info. system technology

Inbound logistics

Transportation technology Material handling technology Packaging technology Comm. system technology Info. system technology

Operations

Media technology Audio and video recording technology Comm. system technology Info. system technology

Outbound logistics

Diagnostic and testing technology Communication system technology Info. system technology

Marketing/Sales

Service

Source: Competitive Advantage: Creating and Sustaining Superior Performance, M E Porter, 1985] 8

Technology performance parameter

The S-Curve of technological progress Physical limit New Invention Period

Technology Improvement Period

Embryonic Growth

Mature Technology Period Maturity

Aging

Time 9

The S-Curve of technological progress  



Technology performance parameter Vs time Technology performance can be expressed in terms of an attribute  Ex. Aircraft speed (Jet engine) Technology progresses through a three-stage Technology Life Cycle:   

New Invention Period (Embryonic Stage) Technology Improvement Period (Growth Stage) Mature-Technology Period (Maturity/Aging Stage)

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The S-Curve of technological progress New

Invention Period   

Slow initial growth Experimentation Fixing bugs

Technology 

Improvement Period

Rapid and sustained growth

Mature-technology   

Period

Progress in performance slows down Technology reaches natural limits (physical limits) Ex. Vacuum tube technology was limited by the tube’s size and the power consumption of the heated-filament (for electron conduction) : Arrival of transistor (solid-state technology)

When a technology reaches its natural limits it becomes a mature technology vulnerable to substitution or obsolescence.

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Technology life cycle and product/process life cycle Rate of innovation

Technology life cycle Product innovation Process innovation

Technological discontinuity (turbulence)

Dominant design

Aging technology (substitution and discontinuity)

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Strategies at different stages

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Relationship Between Technology Strategy and Product Life Cycle

Source: Prof Nawaz Shariff., AIT

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Technology and marketplace 

Science/Technology Push 





Science provides the base for technological Technology development, which in turn creates new markets Most of the recent Nuclear energy technological breakthroughs are based on earlier scientific discoveries Radical innovations create Transistors markets

Scientific discovery Einstein (1905) A H Wilson (1931)

Electronics

Maxwell (1880)

Genetic engineering

Watson and Crick (1952) 15

Technology and marketplace 

Market pull 



  

Technological development is also stimulated by market pull Technology developed to cater to a market need Market pull is often stimulated by consumers Ex. A cure for SARS, AIDS Mostly incremental developments

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Science Push and Market Pull Opportunities for science push • • • •

Innovation

Scientific discoveries Applied knowledge Recognised needs Intellectual capital

Opportunities for market pull • Market demand • Proliferation of application areas • Recognised needs • Opportunities for increased: profitability, quality, productivity

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Invention and Innovation 

Who invented the vacuum cleaner?  



Murray Spangle invented an ‘electric suction sweeper’ W H Hoower marketed and sold the product

Who invented the sewing machine?  

Elias Howe produced the world’s first sewing machine Isaac Singer built a successful business from it. (He was later forced to pay a royalty to the inventor)

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Invention and Innovation 

Invention 



Creation of a new idea for a product, process or service

Innovation A business process which brings inventions to commercial use  Requires the integration of inventions and existing technologies to bring innovations to the marketplace 

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Invention and Innovation 

Idea generation + problem solving

Invention



Invention + implementation



Innovation + diffusion

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Management of Innovation: Creation of new ideas and development of new ideas into commercial products



Management of Technology: Innovation and acquisition and application of existing innovations (diffusion)

Innovation

Economic value

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Components of an innovation cycle May never be developed into marketable products

Invention

Has no instantaneous commercial value

Scientific Discovery

Innovation

Adopting invention

Market Buying or ignoring the innovation Source: Tarek Khalil

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The innovation gap Concept

Invention Innovation

Ball-point pen 1888 Zip fastener 1891 Fluorescent lighting1901 Helicopter 1904 Television 1923

1946 1923 1938 1936 1936

Gap (Years) 58 32 37 32 13

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Stages of technological innovation 

Basic research 



Applied research   



Research directed toward solving one or more of society's problems. Ex. Research conducted to find a cure for AIDS. Systematically builds knowledge on previous knowledge: advance science Results in technology development and implementation

Technology development  



Research for the sake of increasing the general knowledge of science. May or may not result in specific application.

Human activity that converts knowledge and ideas into physical hardware, software, or service May involve demonstrating the feasibility of an idea, verifying a design concept, or building and testing a prototype

Technology implementation  

Set of activities associated with introducing a product into the marketplace Involves the first operational use of an idea or product by society 23

Stages of technological innovation 

Production  



Marketing  

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Set of activities that ensures that consumers embrace the technology. Involves: market assessment, distribution strategy, promotion and measuring consumer’s behaviour

Proliferation   

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Set of activities associated with the widespread conversion of design concepts or ideas into products and services Involves: manufacturing, production control, logistics and distribution

The strategy and associated activities that ensure the widespread use of technology and its dominance in the marketplace Proliferation depends on methods of exploiting the technology and on the practice used for marketing the technology Ex. Microsoft bundling Internet Explorer with Windows

Technology enhancement  



Set of activities involved with the maintenance of a competitive edge for the technology Involves: improving the technology, developing new generations or new applications for the technology, improving quality, and meeting customers’ special needs Increases the life cycle of technology 24

The Innovation Chain Scientific Invention

Recognised + Engineering + Entrepre + Manage + Social + Supportive Development neurship ment

Need

Environment

Commercially Successful Innovation Source: Martin, 1994

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Nature of R & D activities • • •

• • •

•

The characteristics of R&D activities are somewhat different from the management of the conventional functional areas. R&D pursues unknown results, relatively unstructured, uncertain and risky. R&D activities are on a project by project basis. Upon completion the team may work on something completely new and different. R&D requires moderate to large investments , long pay-back periods. High failure rate of projects. R&D investment has to be recovered from only the successful projects. In large and interdisciplinary projects the outcomes of different projects are interrelated. Thus project selection and management becomes very difficult. Other aspects are: difficulty of evaluation, constant need to foster and enhance creativity, and need for long-term perspective. 26

A plausible R&D path for developing country firms  

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In the initiation stage mostly mature technologies are acquired by developing country firms. R&D efforts take place in progressive firms to assimilate the acquired technologies (adaptation of product or process technology, improvement of raw materials, etc.) Growth oriented firms which are successful in assimilating and perhaps even improving technology may aim to acquire higher level technologies. These firms now have capabilities to do reverse engineering which enable them to imitate foreign products (mastery of manufacturing equipment, plant engineering design, etc.). R&D efforts focus on development of new products and on radical improvement of existing products.

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A plausible R&D path for developing country firms 



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Once accumulating substantial capabilities, firms carry out R&D to develop products which are new to the world and they also start developing critical core technologies. A firm that reaches this stage could be considered to have reached the state-of-the-art in its own area of specialized technology. In countries such as Japan, South Korea, Taiwan, there are firms which have successfully followed this approach.

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Technology development -The Japanese example     

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After world war 2, Japan was considered to be 20 years behind western powers in terms of technological capabilities Before world war 2, Japan imported only 231 technologies By 1960s Japan has imported 7,500 technologies Japan thus relied heavily on technology imports for economic development But:  While Japan spent on an average Y42 m per imported technology it spent Y58m to assimilate and adapt these – i.e. on R&D  Today Japanese firms are able to generate their own technologies because of R&D capabilities acquired over the years. Korean example? China? India? Sri Lanka?

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EP NC CO

DE SI G N

M

LE

OB

EXTENSION

PR

PR OD UC T

Innovation Triangle

KNOWLEDGE

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The innovation triangle 

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the academic institutions engaged in science and technology education and research (academia), a wide range of science and technology related research and development organizations (R&D units), and the productive enterprises (industries).

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Key Elements of the Innovation Triangle & Complex Linkages 

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Innovation triangle comprises of crucial linkages among 3 types of institutions 

Academic institutions engaged in S&T education and research;

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Wide range of S&T related R&D organizations;

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Engineering and industrial productive enterprises

Generic type of 2 way linkages are: 

Knowledge-Extension;

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Design-Production; and

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Problem-Concept

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Case of Japan 

Factors that led to the success of Japan:     

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After WW II Japan competed in mature industries: steel, automobiles and consumer products   

  

Thoughtful strategic planning Planned transfer of technology Targeting of niche products and markets Teamwork and excellent execution Commitment and desire to win

Easier to acquire the technology Compete in process technologies with new techniques Once the process was stable, they introduced innovation into the products

Were able to consolidate improvement ingredients: strategic planning, know-how and collaboration between organisations Coordinated by: Ministry of International Trade and Industry (MITI) Funding provided by strong conglemerates (kereitsus)

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