Technology and Innovation Management B222 B Chapter 1 – Strategic management of technology and innovation
Importance of technology and innovation to business The impact of technology on business is seldom one-dimensional, but rather, new technology causes a cascading effect within firms New technology has made more information available to consumers. As more information becomes available, potential buyers become more aware of opportunities to obtain and use products. This leads to greater demand, but more precise information also leads to pricing being more systematic. Thus, technology leads to better prices.
Importance of technology and innovation to business For a firm to make a profit in this environment, it must be more efficient through technology. Thus, the use of technology in one domain typically leads to greater need for changes in technology in other areas. RFID used at Wallmart example p. 8
Radio-frequency identification (RFID) RFID tags are used in many industries, for example, an RFID tag attached to an automobile during production can be used to track its progress through the assembly line; RFID-tagged pharmaceuticals can be tracked through warehouses; and implanting RFID microchips in livestock and pets allows positive identification of animals
Importance of Technology and Innovation to Society Technology helps push firms to lower costs. However, this has led to increased levels of outsourcing by a number of firms to lower cost settings; technology advances in communication and computers help ensure that such outsourcing can be successful. For example, the cost of a computer programmer in the United States can be $90,000 a year. This same job in India will cost less than half for the same quality work.
Importance of Technology and Innovation to Society In the past, manufacturing jobs were the only jobs principally outsourced. However, today, the jobs outsourced include not only computer programmers but also other technical jobs such as reading MRI images from medical tests and preparing tax returns In fact, economists predict that over the next 20 years over 40 million such jobs will be lost in the USA.
outsourcing is not all negative While individually an outsourced job may be very painful, studies indicate that there is a net 14 percent benefit to the outsourcing nation through new job creation and increased efficiencies.
In addition, the development of the economies of India, China, Russia, and other similar nations provides new markets for other businesses from developed economies. The interaction between society and technology can be viewed in terms of pushing and pulling (p. 9)
Technology and innovation do not stand still Technology and innovation influence both the firm and society as a whole, and this impact is ongoing. Entire industries can be created or can disappear, very quickly because of new technologies. To iIIustrate, consider what has happened to the music industry. In the last 40 years, the dominant technology has changed from records , to cassette tapes, to compact discs. Now with the emergence of MP-3 and other types of new technologies (4G phones), CDs may soon become obsolete. Example of real case p. 11
The technology and Innovation Imperative Is Organization-wide Technology and innovation influence not only the technical aspects of business but also the behaviors and attitudes of individual, and group within the organization To illustrate, the portable cell phone has become part of our everyday lives. This technological innovation means that employees who are "out of the office" are not out of contact”. This has made it easier to work from locations other than the office This means that managers must learn how to manage these individuals differently from employees who are physically present each day in developing innovative ways to accomplish work
Value Creation Is the Key Technology and innovation must add "value" to the firm or to society to flourish The new competitive environment requires more in the management of technology. Now the value addition of the technology must be clear and based on sound analysis and forecasts to justify the investment. This makes the processes of the management of technology and innovation more difficult and complex
Definition of Technology We define technology as: the practical implementation of learning and knowledge by individuals and organizations to aid human endeavor. Technology is the knowledge, products, processes, tools, and systems used in the creation of goods or in the provision of services.
Definition of Management of Technology We define the management of technology as follows: The management of technology is the linking of different disciplines to plan, develop, implement, monitor, and control technological capabilities to shape and accomplish the strategic objectives of an organization
5 REASONS FOR THE IMPORTANCE OF MANAGING TECHNOLOGY The rapid pace of technological change: to take advantage of technological opportunities The rapid pace of technological development :have shortened product life cycles, organizations should be more proactive in the management of technology There is a need to cut product development times: the lead-time from idea to market is being reduced by the emergence of new or altered technologies Increasing international competition: demands that organizations must maximize competitiveness by effectively using new technologies As technology changes, the tools of management must change
Definition of Innovation The process whereby new and improved products, processes, materials, and services are developed and transferred to a plant (factory) and/or market where they are appropriate. Types of innovation p. 20 figure 1.4 Just-in-time JIT inventory management p. 20
Definition of Management of innovation It is a comprehensive approach to managerial problem solving and action based on an integrative problem-solving framework, and an understanding of the linkages among innovation streams, organizational teams, and organization evolution. It is about implementation-managing politics, control, and individual resistance to change. The manager is an architect/ engineer, politician/network builder, and artist/scientist To cover p. 27 Case 1.1
Technology and Innovation Management B222 B Chapter 1 – Strategic Foundation