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Chapter 1

Introduction to Management
of Technology
(MOT)

What is Technology
To 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
companys 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.

Introduction
Technological 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.

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 strategy
Development of technological development Capabilities, IPR
Innovation management
Technological forecasting
Technology management, manufacturing strategy, and business
competitiveness interfaces.
Barriers to the adoption of technology
Technology and manufacturing flexibility.
E-business, a rapidly developing field of new technology
K-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.
Level
A 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

NATURAL
SCIENCE
SOCIAL
SCIENCE

ENGINEERING
MOT

BUSINESS
THEORY

INDUSTRIAL
PRACTICE

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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 change
The change in scope
Change in competition
Trade blocs

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THE CREATION OF
WEALTH
Attempts 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
WEALTH
The 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 CYCLE


There 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

17931829
Cotton
gin
Practical
stream
boat
Steam
powered
locomoti

18301900
Telegrap
h
Radio
telephon
e

19011939
Air
condition
er
Rockets
FM radio
Jet
engine
Helicopte
r
Xerograp
hy

19401949
Color TV
Jet
airliner
Instant
camera

19501969
NASA
Apollo
XI
Fiber
optics
First
man in
space

1990
1970-90 Infotec
Laser h
printer Stem
Space cells
shuttle biotec
h
MRI
scanner

Evolution of Production
Technology

TECHNOLOGY AND
NATIONAL
ECONOMY

JAPAN AND GERMANY-The Rise


THE UNITED STATES OF AMERICA-The Fall

Modelling economic
growth fuelled by
science and technology

Conclusion
Technology 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

Technology
Management:Licensing
Developing and Implementing Effective
licensing Programs:
Licencing is appropriate program?

How IP can be protected


Market research: Market Position , Competitive

Technologies, prospective licenses.


Developing Licencing strategies
How to market technology
Negotiating and drafting licence agreements.

To license or Not to
Licensee
Initiating a new venture to develop,
manufacture and sell products
Buying an existing company with the required
assets
Establishing a Joint venture
Licensing
Forming a strategic alliances
Selling the IPR to a third party

Risk and Reward


New Venture: Both risk and potential return are highest
Acquisition: Buying an existing company or product line is slightly less risky
Joint Venture: Two or more company work togatherin a new company
Licensing: 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
assts
Weak
Strong
Technolog
y Position
Strong

Technol
ogy
Position
weak

Acquire
Complementary
assets

Manufacture and
Sell

Sale or abandon
Technology Assets

Acquire Technology