AT 6001 Fundamentals of Management of

Technology
Lecture 3
The Process of Technological Innovation
Drawbacks and Problems of Technology

Dr. Manzila Islam Tuheen

Assistant Professor
Institute of Appropriate Technology (IAT)
Bangladesh University of Engineering and Technology (BUET)
 6 Process of Technological Innovation

Learning objectives
❑ Invention versus innovation
❑ Process of technological innovation – definition
❑ Stages of technological innovation
❑ Innovation and wealth creation process
❑ Critical trajectories impacting the innovation process
❑ Entrepreneurship
❑ Entrepreneurial and stewardship management
❑ Characteristics of Managers
 6.1 Invention and Innovation
Technological growth is the result of new inventions and innovations. An invention becomes and innovation when
applied for the first time.

Various types of innovations based on behavioral pattern:

Continuous Innovation: An innovation which has little disruptive

impact on behavior pattern is called continuous innovation.
Example: Fluoride toothpaste

Dynamically Continuous Innovation: It does not involve new

consumption pattern but involve the creation of a new product or
alteration of an existing product.
Example: Electronic toothbrush

Discontinuous Innovation: It volves the establishment of new

behavioral pattern and creation of previously unknown products such
as automobiles, television, computer etc.
 6.2 Transformation Process of Technology

The process of technological change is closely linked to innovation. A lot of things are invented, but it is only
through innovation that technology effects societal change. Technological change occurs through:

Substitution: The simplest form of technological substitution

occurs when a new technology captures a substantial share of
the market from an existing technology. The new technology is
better and economically more viable. Thus, after gaining a small
market share, it is likely to become more competitive as time
progress. So, once a substitution has begun, is it highly
probable that it will eventually take over the available market.

Diffusion: Diffusion refers to the acceptance over time of some

specific technology by individuals, group of organizations.
 6.2 Rate of Improvement of a Technology

The rate of improvement of a technology can be measured by the following two:

1. Rate of diffusion of a technology: The rate of diffusion of a technology can be represented by the
cumulative number of the adopters of a new product, material or a process. The rate of diffusion also
follows the S-curve.
2. Rate of substitution of a technology: The rate of substitution of a technology can be determined based
on relative changes in the market share of the two technologies or two sets of technologies.

Diffusion results in substitution

Substitution may be considered as a phenomenon that follows or results from the diffusion of an
innovation. It can also be said that diffusion and substitution have a cause-and-effect relationship.
 6.3 Process of Technological Innovation
The process of technological innovation is a complex set of activities that transforms ideas and scientific knowledge into
physical reality and real-world applications. It is a process that converts knowledge into useful products and services that
have socioeconomic impact. It requires the integration of inventions and existing technologies to bring innovations to the
marketplace.
Eight stages of technological innovation

1. Basic research: This is research for the sake of increasing our general understanding of the laws of nature. It is a
process of generating knowledge over a long period of time. It may or may not result in specific application.
2. Applied research: This is research directed toward solving one or more of society’s problems. An example is
research conducted to develop a drug for treating a known disease. Basic and applied research advance science
by systematically building knowledge on previous knowledge. Successful applied research results in technology
development and implementation.
3. Technology development: This is a human activity that converts knowledge and ideas into physical hardware,
software, or service. It may involve demonstrating the feasibility of an idea, verifying a design concept, or building
and testing a prototype.
 6.3 Process of Technological Innovation (Cont.)

Eight stages of technological innovation (cont.)

4. Technology implementation: This is the set of activities associated with introducing a product into the
marketplace. It involves the activities associated with ensuring the successful commercial introduction of the
product or service, such as cost, safety, and environmental considerations.
5. Production: This is the set of activities associated with the widespread conversion of design concepts or
ideas into products and services. Production involves manufacturing, production control, logistics, and
distribution.
6. Marketing: This is the set of activities that ensures that consumers embrace the technology. It entails market
assessment, distribution strategy, promotion, and the gauging of consumers' behavior.
7. Proliferation: This is the strategy and associated activities that ensure the widespread use of the technology
and its dominance in the marketplace. Proliferation depends on methods of exploiting the technology and on the
practice used for marketing the technology.
 6.3 Process of Technological Innovation (Cont.)

Eight stages of technological innovation (cont.)

8. Technology enhancement: This is the set of

activities associated with maintaining a competitive
edge for the technology. It entails improving the
technology, developing new generations or new
applications for the technology, improving quality,
reducing cost, and meeting customers' special
needs. Technology enhancement increases the life
cycle of the technology.
 6.3 Process of Technological Innovation (Cont.)

❑ Martin (1994) illustrates the technological innovation process as a chain equation. A commercially successful
innovation is the product of a sustained chain reaction.
❑ The innovation chain equation reveals the important role of entrepreneurship in connecting ideas to the
marketplace. When a technological turbulence takes place because of a scientific discovery or an
engineering development, it creates a loosely defined product structure. It takes entrepreneurial and
technical competencies, experimentation, and creative work processes to solidly define the product.
❑ The management role in the innovation chain emphasizes the need for stability and control at a certain phase
of the innovation process. It permits running operations efficiently to achieve commercial success. A
formalized managerial structure tends to produce incremental and process innovations more than radical
innovations.
 6.3 Process of Technological Innovation (Cont.)

❑ Bordogna (1997) presents a contemporary model of

technological innovation that challenges the traditional
linear-path process characterized by new scientific
knowledge created at the front of the path and new
products and services garnered at the path's end.
❑ He defines innovation as “a concurrent, interactive, and
nonlinear activity. It includes not only science,
engineering, and technology, but social, political, and
economic interactions as well... and the public policy
that either enables or mutes the whole wealth creation
process.”

❑ This view elevates the innovation process to a new level of total system integration, taking into consideration
social, political, and economic issues
 6.4 Innovation and Wealth Creation Process

❑ Recent economic history has made it clear that research leadership does not translate automatically into
economic success: physical capital (including information and databases), enriched human capital, and
technological capital are needed as well.
❑ A critical element in the innovation process is scientific inquiry, an analytic, reductionist process which involves
delving into the secrets of the universe to discover new knowledge.
❑ The essence of engineering, on the other hand, is the process of integrating all knowledge to some purpose.

Three critical trajectories that impact the innovation process

 6.5 Three Critical Trajectories Impacting the Innovation Process
1. Border Crossings (National and Sectorial)
❑ The first trajectory comes under the heading of "border crossings." It refers to the growth of cooperative
approaches to scientific and technological research.
❑ There is a marked increase in recent years in research collaborations that span international boundaries. The
number of internationally coauthored articles increased by 150 percent from 1981 to 1993. The share of all
published articles with co-authors from two or more different nations has more than doubled over the past
decade.
❑ Cooperative activities that cross sectorial boundaries-notably industry-university partnerships-are a relatively
new addition to the strategic intent of research investment in contemporary universities, but they too show signs
of proceeding at an accelerating pace.
 6.5 Three Critical Trajectories Impacting the Innovation Process (Cont.)
2. Emergence of Complex Technologies

❑ Donald Kash and Robert Rycroft - The most successful commercial technologies have changed in one basic
way over the past quarter century: they have become more complex.
❑ Kash and Rycroft analyzed the 30 most valuable exports in the global market in the years 1970 and 1994.
They divided them into the categories shown in Figure 6.
❑ They concluded that "economic well-being in the future will likely go to those who are successful in
innovating complex technologies."
❑ The future belongs to those who can make sense of the complex, to those who can integrate diverse
knowledge located in many different organizations to produce previously non-existent capabilities.
 6.5 Three Critical Trajectories Impacting the Innovation Process (Cont.)

3. Knowledge and Distributed Intelligence

❑ What we are seeing today is only the beginning for forging connections to learning and creativity. We are
moving from the Internet Decade to the Information Everywhere Decade.
❑ Will we develop new ways to express and unleash our creative talents? What tools will enable us to control
and master this ultra-rapid flow of information? Will having the proverbial Library of Congress in your pocket
be a blessing or a burden?
❑ The answers to these questions are being pursued on many different fronts from many different directions.
❑ Our efforts and our leadership can transform this immense, unprecedented, and somewhat intimidating
potential into true progress, economic opportunity, social gain, and rising living standards for human
civilization.
 6.6 Creative Transformation
❑ Joseph Schumpeter introduced the concepts of creative destruction and creative transformations over half a
century ago. He concluded that unless an entity continually transforms itself, it will ultimately be destroyed by
market competition.
❑ The principles underlying creative transformations by bringing together research in two areas-the
Management of Technological Innovation (MOTI) and research on Transformations to Quality Organizations
(TQO).
❑ The first program is administered by Engineering Directorate, while the TQO program resides in Directorate for
Social, Behavioral, and Economic Sciences.
❑ These questions and many others like them cannot be addressed by relying exclusively on either the so-called
"hard" or "soft" sciences. Addressing them requires that we develop new approaches to research that are
highly integrative across all fields of science and engineering.
 6.7 Entrepreneurship

❑ Technological progress is frequently sparked by entrepreneurs and entrepreneurial spirit. Steve Jobs of
Apple, and Bill Gates of Microsoft are but a few examples of successful entrepreneurs.
❑ They possess a particular set of qualities, including vision, courage, initiative, commitment, persistence,
independent thinking, drive to succeed, and ambition. Most entrepreneurs have an appreciation for a
particular technology branch, good motivational skills, and a commanding personality. They tend to deviate
from mainstream thinking, enjoy being the center of attention, and savor recognition. They could be
compulsive in seeking their goals or perfection.
❑ Entrepreneurs are not necessarily inventors. Their skill usually lies in bringing innovation to the
marketplace.
❑ Entrepreneurship, however, is not limited to individuals or small companies. It exists and must indeed be
encouraged in large corporations if the corporation is to maintain its vitality and ensure its long-term
survival.
 6.7 Entrepreneurial and Stewardship Management

❑ Organizations are created to transfer knowledge or technology to the marketplace. The structure of the
organization provides a system to integrate the resources required to exploit the knowledge. The objective
of management is to guide the organization toward achieving its mission while optimizing the use of
resources. Organizations can be managed in a highly structured, rigidly standardized way or in a loosely
defined, less formal, entrepreneurial way. The former is associated with professional management, the
latter with the entrepreneurial management style.

❑ In MOT the style of management adopted by organizations requires adjustment according to the different
phases of the technology life cycle. In the early phase of technology development, an entrepreneurial style
of management is needed. An entrepreneurial spirit creates disturbance in the system and helps
organizations create new technology cycles or discontinue existing ones. However, once the technology life
cycle is in the full growth phase or in the maturity phase, stewardship or professional management may be
needed to exercise control over operations.

❑ A stewardship managing style avoids risk taking. It often leads to a bureaucratic environment. It frequently
has a short vision and, in many cases, fails to recognize the importance of innovation. This may kill new
initiatives.
6.8 Personal Characteristics of Managers
 6.8 Management Renewal Cycle
❑ Entrepreneurs have difficulty keeping order and conforming
to rigid procedures. They also have a strong attachment to
their ideas and products. It is difficult for them to let go of
something they championed, gave birth to, nurtured to
health, and watched grow.
❑ There is a time when the entrepreneurial management style
must give way to a stewardship one. When the latter arrives,
it often conflicts with entrepreneurs, forcing them out or
stifling their creativity.
❑ The bureaucracy created by stewardship resists change and
gives way to an organized but static system. Entrepreneurial
spirit fades.
❑ A stable or declining period ensues. To revitalize the
organization, entrepreneurial spirit must be brought back
and the cycle continued.

❑ Successful organizations must be able to embrace elements of these two managerial styles. The organization
must be structured to innovate, respond to and sustain growth and continue to be in the forefront of
technological change.
 7 Drawbacks and Problems of Technology

Learning objectives
❑ Problems and constraints in developing countries
❑ Problems with different components of technology
❑ Problems with national technological climate
❑ Problems with external assistance
 7 Drawbacks and Problems of Technology
If technology is directed towards harmful activities, then it will bring us harmful effect on the society.

1. Disparity in the Social System: It has been observed that in a developing country, a new technology which
has promise of high profit is usually appropriated by the privileged few. This does not only perpetuate their
dominance over the socio-economic scene, but also increases disparity within the social system.
2. Shift in the Employment Pattern: Due to unlimited importation and hasty introduction of modern
technology, developing country is now acing the tendency of technological devices to displace manual
labor.

Technology is an instrument to improve the quality of life. But it does, also deteriorate living conditions. A
controlled technological development and its systematic application for the transformation of natural
resources into produced resources would be the logical path to progress. It is imperative that the policy
planners and decision makers understand the inherent characteristics of technology and its potential
impacts in the socio-economic development.
 7.1 Problems and Constraints of Developing Countries

A sustained expansion of scientific and technological activities is not a serious problem for the developed
countries where the technological competence, infrastructure as well as the climate conducive to the growth and
expansion of technology exist. However, for the developing countries, effort to develop indigenous technological
capacity are often quite challenging due to the problems arising from:

❑ The existing condition of the different components of technology

❑ The national climate in which technology is to grow and operate
❑ The dependence on external assistance

The policy planners and decision makers must have a clear understanding of all these constraints and problems
so that intervention can be made judiciously at the right spot in the efforts to build the national science and
technology capability.
 7.1 Problems and Constraints of Developing Countries
7.1.1 Problems with Different Components of Technology

❑ Technoware
[ See Dr. M. Kamal Uddin’s Book, Chapter 7, Section 7.4]
❑ Humanoware
❑ Infoware
❑ Organoware

7.1.2 Problems with National Technology Climate

[ See Dr. M. Kamal Uddin’s Book, Chapter 7, Section 7.5]

7.1.3 Problems with External Assistance

[ See Dr. M. Kamal Uddin’s Book, Chapter 7, Section 7.6]

Appendix
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Class Test 1
❑ 16/11/2024
❑ Syllabus – Lecture 1-3
❑ Open book, open lecture examination
❑ Total marks - 20
❑ Total time – 30 minutes