Narayanan: Chapter 3

Process of Technological Change: Innovation

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Chapter objectives

Innovation and its components Variables that stimulate innovation Four major types of innovation Interrelationships between characteristics

of technological change Characteristics of innovative firms Managerial implications of the dynamics of

technical change.

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Dynamics of Tech. change

Firm level– problem recognition– technology choice– solution development(innovation&adoption)– commercialization and implementation

Technology level out of firm’s control– tech developers and facilitators,

customers, regulators, others ...

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Implications to MOT as a result of dynamics Identify two implications (relative to

dynamics of technological change) for management of technology (MOT) using examples from your experience:

“The key to effective management of technology lies in linking technological solutions to market realities”

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Implications continued:

“Breakthroughs are hard to come by, and the financial payoffs have a tendency to go to someone other than the originator” Narayanan, p.59

“Make things that do what people expect them to. Build them to make these things easier rather than more complicated. Make them look and feel familiar” Eric Tucker, Tech. Review, April 2002

– these three simple ideas rule out so much of what is envisioned for many tech products.

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Innovation

Definition - includes both output and the process of arriving at a technically feasible solution to a problem initiated by a technological opportunity or customer/societal need

Innovation

Imitation

Adoption

Competitors

Consumers

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Components of innovation

Components of Innovation– process refers to the means organizations

use in achieving technological solution– output refers to the product or service that

result from the innovation• hardware• software• evaluation information-a major activity during

diffusion stage

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Drivers of innovation at the firm level Market factors

– response to market demands or competitive climate

Input factors– high labor costs can lead to investments in

process technologies– expensive raw materials

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Question:Examples of Drivers of innovation Give examples of innovation created by

– market factors– input factors

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Process of innovation Market pull innovations - specific market

need necessitates tech advancement– tend to be incremental innovations

Technology-push innovations - advancement of technology directed towards increased technical performance of output– R&D efforts, and more frequent with new and

emerging technologies.

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Innovation outputs: component knowledge Vs. component configuration Incremental Modular Architectural Radical

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1. Evolution of technology- the changes

to performance characteristics of a specific technology over time.

More complex than the 2 extremes of “inventor genius” or “orderly and planned process”

S-curve of technology evolution: stages– Emergence– Rapid improvement– Declining improvement– Maturity

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Evolution of technology

What are some performance characteristics?

S-curve impact of technology performance– Learning processes (refer to stages of

product development)– Technology limits

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2. Technology progression - process by which existing technologies become obsolete

Radical breakthrough - mostly a chance occurrence

Accumulation of learning/knowledge about technology

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3. Levels of technology development Does innovation always follow/begin

with need identification? There is often a lag between an

invention and its application (innovation) Major technological advances result

from clusters of innovations

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Technology change agents

Federal and State research institutions (labs, NASA)

Private research entities – Batelle, universities, etc.

Entrepreneurs and others

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Characteristics of innovative firms

Entrepreneurial innovation Managed innovation Internal organizational characteristics –

formalization, centralization, Resources Openness to external information Informal internal communication

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Imparts of environmental trends on innovation

Globalization Time Compression Technology integration – advanced

systems engineering skills are still rare