Technology Strategy & Development

By

Dr. Vijay Kr. Khurana

What is technology strategy ? • --- According to Oxford English Dictionary the

‘ ’ :word Strategy means– - A plan designed to achieve a long term aim– The planning and directing of military activity

.in a war or battle• , According to Mintzberg and Quinn a strategy is

’ the pattern or plan that integrates a nation s or’ , organization s major goals policies and action

.sequences into a chosen whole

What is technology strategy ? • ’ A strategy serves to allocate a nation s or

’ organization s resources into a unique and viable posture which is based on its strengths

, and weaknesses and anticipated changes in the.environment

• Technology Strategy is the way or plan of attaining technological goals and technological

. changes• Technology strategies are formulated at the

national level and at the enterprise level.

Technology Strategy at National level

• , At national level two types of strategy options are . usually explored i e internalisation oriented strategy &

. externalisation oriented startegy A nation may adopt any of the two technology strategy or suitable

.combination of bothInternalization Oriented Strategy• This str ategy aims at seeking technological

development with an objective to become internally . self reliant

• This strategy aims at seeking technology transfer by / ( ). TNCs MNCs via Foreign Direct Investment FDI

• / The strategy seeks proactive role in attracting TNCs -MNCs and focusses on ensuring a stable macro

economic environment & good supportive.infrastructure

Technology Strategy at National level

Externalization Oriented Strategy• This strat egy aims at seeking technological

development with an objective to tap external. market

• , . Under this strategy there is restricted role for FDI / This strategy seeks to foster encourage indigenous

. technology development i e developing domestic technology capabilities in general or in selected

. strategic industries• : Some examples of this type of strategy are Minority

( joint ventures with minor share to foreign), collaborator Technolgical assitance to domestic

, firms Encouraging import of capital Goods

Technology Strategy at Enterprise level

• , According to Bentz Martino & Mintzberg Technological Strategy at enterprise level

--- “ means A formal set of enterprise intentions that allocates available resources and sets

priorties based on clearly stated technological and enterprise objectives and a perceived

environment in which the process is to be.embedded

Technology Strategy at Enterprise level

- According to Porter following three factors ’ :influence enterprise s Technology Strategy

• : Sustainability of technological lead Technological leadership can be sustained only

.if competitors cannot copy it• : First mover advantages Enterprise gets many

, -advantages like increased reputation pre , , empting competition early profits new sales

, etc

Technology Strategy at Enterprise level

• – First mover disadvantages Certain disadvantages and risks can adversly affect the

, first mover like cost of regulatory approvals , , cost of educating buyers demand uncertainity

, low cost imitation by competitors risk of technological discontinuities of existing

/ / technology products processes

Technology Strategy at Enterprise level

Based on factor analysis, an enterprise may adopt any of following technology strategies.

• – Technology Leadership Strategy Under this, strategy a firm seeks to be the first to introduce

/ .technological changes innovations• – Technology Followership Strategy A

, conscious & active strategy by which a firm chooses not to be first on .innovations

What is Technology Development / Generation ?

• Generation of technology is the process by / which technology is generated developed by

. various entities• , In communist or socialist countries the

technology is mainly generated by government , owned research institutions universities and

other bodies with a very lesser contribution . coming from private sector

• , In capitalist countries the technology is mainly developed by private sector and there is some

. contribution from government agencies as well• , In countries with mixed economic system both

government and private setor play a significant .role in technology generation

Technology Development / Generation

Technology Development / Generation

• The government technology policy framework directly influences technology generation in a

. nation• , Thereafter technology genaration depends

upon the technology strategy of the / . . organization enterprise i e whether it wants to

become technology leader or technology? follower

Technology Generation • The technology strategy of the organization sets

the direction for technology development in the organization and to some extent also influences . technological strataegies of competitors as well

• / , At organizational enterprise level generation of technology is both an individual & group

, activity but its management is solely an organizational responsibilty and activity

• Technology develops through a process of, .Creativity Invention and Innovation

What is S Curve of Technology Evolution

• Although the initial development of new technology often appears to be a random process, once a technology comes into existence, its evolution over time displays a reasonable stable pattern.

• Technology Evolution refers to changes in the performance characteristics of specific technology over time

• It is generally perceived that technology evolution follows an S shape curve.

• S-curve of technological evolution” is widely cited to determine at what point managers should shift investments from a mature technology to a new one.

• [ Exceptions: A study done by Sood and Tellis suggests that many technological evolutions do not follow S shape curve.]

What is S Curve of Technology Evolution

S curve of technological evolution summarizes four major stages in the evolution of performance characteristics:

• 1. Emergence : when the new technology comes into existence, but shows little improvement in its performance characteristics

• 2. Rapid Improvement : When performance characteristics improve at an accelerating pace

• 3. Declining Improvement: When the pace of improvement declines

• 4. Maturity: When further improvements become very difficult to achieve

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What is S Curve of Technology Evolution?

Stage 1

Stage 2

Stage 3

Stage 4

What is S Curve of Technology Evolution

S curve shape of technological evolution occurs due to following reasons / effects:

• Learning processes – which, in the first stage, generates more or less stable design & process and in the second stage generates rapid improvements

• Technology Limits – Once a technology reaches full potential, technology limits come into play during later stages. These technology limits are also known a technology frontiers –as called by Dosi. In later stages, radical breakthrough occurs, as a result new technology emerges which replaces existing technology, This is known as Technology Progression

• The performance of the newer technology initially is lower than that of the older technology, but because of their relative positions on their respective S-curves, the performance of the newer technology soon surpasses that of the older.

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Physical limits of technology

What is S Curve of Technology Evolution?

<TechnologyRegime 2

Technology Progression

TechnologyRegime 1 >

Technology Strategy & Development

By

Dr. Vijay Kr. Khurana