Introduction to Management of Technology

(MOT)

Chapter 1

What is TechnologyTo a scientist technology is the end product

of research –inventions and know-how that may be developed in to a commercial products.e.g. research papers, patent disclosures and demonstration units that were used to prove the inventive concept.

Contd..To an engineer, Technology is a tool or

process that can be employed to build beter products.

Better Product: Performance is superior that cost is less or that allow the manufacturer to sell in previously inaccessible markets.

Engineers often develop new technologies that have a significant effect on the company’s reveneus and profitability

Marketing Managers: advantage over competitors. using technology will reduce cost, Market value of the technology

IP: Intellectual Property creation and Rights. Coca-Cola brand name has been values at almost $40 billion.

Business executives: Most Important yet least understood (Case Stdy: Dhirubhai Ambani)

The successful professionals with vision and commitment understands the importance of technology and devotes the resources and attention necessary to ensure that technology is nurtured ,utilized, protected and leveraged for maximum advantage.

IntroductionTechnological change is one of the most

important sources of change in the economy.

The capacity for science and technology in some countries is not been adequately translated into innovative and dynamic business organization. The economy remains largely dependent on natural resources, traditional processing and manufacturing and, for the most part, on imported technologies.

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Introduction (count-) A sound scientific and technological base is

essential to economic growth in a competitive international environment.

With the increasing impact of globalization on business, the scope for competition is no longer limited by national boundaries or by the definition of a particular industrial sector.

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Introduction (count-)Management of technology, innovation and information have also emerged as key requirements for success in the 21st century enterprise.

Thus, proper management of technological change, particularly at the productive enterprise level, has become the most important consideration for development.

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Technology management and its subfields are relevant to the needs of the government policymakers, industry leaders, and business management students. The subfields covered in the technology management includes:Technology strategyDevelopment of technological development Capabilities, IPRInnovation managementTechnological forecastingTechnology management, manufacturing strategy, and business competitiveness interfaces.Barriers to the adoption of technologyTechnology and manufacturing flexibility.E-business, a rapidly developing field of new technologyK-Commerce

Technology management is the ultimate battleground that will determine which companies and owners will be the winners and losers in the wealth creation game.

Technology has always been the mechanism through which humankind has leveraged its efforts, both individually and collectively, to improve its quality of life. Early forms of ‘technology’ broadly defined , includes simple tools such as the Axe, the spear, bows and arrows, and other similar implements that helped people to survive many thousand of years ago. Later came

EVOLUTION BY AGE OF TECHNOLOGY

CENTRE FOR TECHNOLOGY MANAGEMENT

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What is MOT ?MOT is an interdisciplinary field that

integrates science, engineering, and management knowledge and practice. [MOT, Tarek M. Khalil p.7]

Management of technology refers to the design and use of the means needed within organizations achieve economic and social objectives through technological innovation.

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MOT at Firm Level“an interdisciplinary field concerned with

planning ,development and implementation of technological capacities to shape and accomplish the operational and strategic objectives of the organization”(U.S. National Research Council report(1987))

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MOT at National/Govt. LevelA field of knowledge concerned with setting

and implementation of policies to deal with technological development and utilization,and the impact of technology on society , organizations, individuals and nature .It aims to stimulate innovation , create economic growth, and to foster responsible use of technology for the benefit of humankind(khalil,1993)

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Management of Technology (MOT)An interdisciplinary field

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NATURAL SCIENCE

SOCIAL SCIENCE

ENGINEERING

BUSINESS THEORY

INDUSTRIAL PRACTICE

MOT

The roles of MOT MOT field helps nation and firms to answer the

following question: • How technologies is created?• How it can be exploited to create business

opportunity?• How to integrated technology with business

strategy?• How to use technology gain competitive advantage?• How can technology improve the flexibility of

manufacturing and service systems?• When to enter and abandon technology?

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Why MOT now?The pace of technological changeThe change in scopeChange in competitionTrade blocs

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THE CREATION OF WEALTHAttempts to define different sources of

economic growth and quantify their relative contributions have been pursued by many economists.

Boskin and Lau (1992) indicate that the 3 principal sources of nations’ economic growth are enhanced capital, labor and technical progress.

THE CREATION OF WEALTHThe Nobel Foundation (1997) notes:

Increased per capita production in a country may be the result of more machines and more factories (a greater stock of real capital).

But this increased production may also be due to improved machines and more efficient production methods (which may be termed technical development).

In addition, better education and training, and improved methods of organizing production may also give rise to increased productivity.

CONTI…..Robert Solow, a Massachusetts Institute of Technology

professor, won the 1987 Noble Prize in Economics for creating a theoretical framework that can be used in discussing the factors that lie behind economic growth. Solow argued that technical progress (the change in production techniques) is built into machines and other capital goods and that this must be taken into account when making empirical measurements of the role played by capital.

According to Solow: It is easy to list the things that might contribute to economic growth. The problem is, as we say, to make a model understand how these things interact, and to do it in such a way that may have a prayer of measuring it . . . The surprising conclusion was that techno- logical change looms much larger than capital investment . . . Silicon Valley is the sort of thing I am talking about. (quoted in The Boston Globe, 1997)

THE LONG-WAVE CYCLEThere is no doubt that improvement in productivity is vitally important to an economic system. It provides relief from inflationary pressures and permits real improvement in the standard of living.

Technology is the driver for such improvement. Technology also triggers another mechanism for economic growth that is yet to be fully appreciated, one whose effect has not been quantitatively measured.

Through this mechanism, emerging and new technology spurs economic expansion. In traditional economic literature it is known as the long-wave or long economic cycle.

Betz (1987) suggested that the process behind a long wave is an interaction between new technology, business opportunities the new technology creates, and an eventual overbuilding of capital after the technology ages

THE LONG-WAVE CYCLE PROCESS 1. Discoveries in science create a phenomenal base for

technological innovation. 2. Radical and basic technological innovation creates new

products. 3 .These products create new markets and new industries. 4. The new industries continue to innovate in products and

processes, expanding markets. 5. As the technology matures, many competitors enter

internationally, eventually creating excess production capacity. 6. Excess capacity decreases profitability and increases business

failures and unemployment.7. Subsequent economic turmoil in financial markets may lead to

depressions. 8. New science and new technology may provide the basis for

new economic expansion.

THE LONG-WAVE CYCLE – historical view (betz, 1996)Betz eloquently argued that the long-wave hypothesis

merely describes past connections among pervasive basic innovation, long-term economic expansion, and excess capital formation in technology-mature industries; “It does not determine anything in the future.”; He made the following pertinent observations:

1 .Cutting-edge technology is behind the long waves of economic activity.

2. High-technology products displace old technology when there is a justification for performance over cost.

3. Technology life cycles of industries affect long cycles in the national economy.

4. New technology comes from science, and science comes from new discoveries in nature.

5. A new technology, when created, will begin a new wave.

Important Technological Innovations

1793-1829

•Cotton gin•Practical stream boat•Steam powered locomotive

1830-1900

•Telegraph•Radio•telephone

1901-1939

•Air conditioner•Rockets•FM radio•Jet engine•Helicopter•Xerography

1940-1949

•Color TV•Jet airliner•Instant camera

1950-1969

•NASA•Apollo XI•Fiber optics•First man in space

1970-90•Laser printer•Space shuttle•MRI scanner

1990•Infotech•Stem cells•biotech

Evolution of Production Technology

TECHNOLOGY AND NATIONAL ECONOMYJAPAN AND GERMANY-The RiseTHE UNITED STATES OF AMERICA-The Fall

Modelling economic growth fuelled by science and technology

ConclusionTechnology is clearly one of the dominant features of

modern world. Whether one supports or condemns, there is total

consensus that managing technology effectively is critically important to the success and survival of individual companies and to national economic well-being and growth.

It is ironic that until recently the subject of management technology did not, in general, receive the kind of popular attention that is should have in business, government and management development programs.

The issue is how can we interpret “management of technology” in practical way.

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Technology Innovation :A frame work for reviewing the process

Expert served as a technology and licensing consultant to numerous technology-based companies (1987-1994) and during the period from 1994 to 2000, managed the worldwide licensing of Mobil Oil Corporation's exploration and producing technologies. As principal of Expert's Firm, he now offers licensing consulting services to technology-based businesses. Licensing proprietary technologies is an effective way to achieve added returns on a company's investment in the development of intellectual property (IP). The licensing process requires expertise in formulating a strategy for managing an enterprise's IP, the appraisal of relevant internal and external technologies, and in the negotiation process to finalize agreements that achieve the desired strategic and financial goals associated with a licensing program.

Technology Management:LicensingDeveloping and Implementing Effective

licensing Programs:Licencing is appropriate program?

How IP can be protectedMarket research: Market Position ,

Competitive Technologies, prospective licenses.

Developing Licencing strategiesHow to market technologyNegotiating and drafting licence agreements.

To license or Not to LicenseeInitiating a new venture to develop,

manufacture and sell productsBuying an existing company with the

required assetsEstablishing a Joint ventureLicensingForming a strategic alliancesSelling the IPR to a third party

Risk and RewardNew Venture: Both risk and potential return are highestAcquisition: Buying an existing company or product line is slightly less risky Joint Venture: Two or more company work togatherin a new companyLicensing: Lower risk still more because less investment and fewer

resources are needed to implement.Strategic Alliances: Two or more company form strategic alliances Vertical and Horizontal Sale: Least risky approach

Complementary asstsWeak Strong

Acquire Complementary assets

Manufacture and Sell

Sale or abandon Technology Assets

Acquire Technology

Technology Position

Strong

Technology Position

weak