TECHNOLOGY MANAGEMENT



Technology Management 203
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Technology is a Greek word derived from the synthesis of two words: techne (meaning art) and logos (meaning logic or science). So loosely interpreted, technology means the art of logic or the art of scientific discipline. Formally, it has been defined by Everett M. Rogers as "a design for instrumental action that reduces the uncertainty in the cause-effect relationships involved in achieving a desired outcome". That is, technology encompasses both tangible products, such as the computer, and knowledge about processes and methods, such as the technology of mass production introduced by Henry Ford and others.

Another definition was put forth by J. Paap, as quoted by Michael Bigwood in Research-Technology Management. Paap defined technology as "the use of science-based knowledge to meet a need." Bigwood suggests this definition "perfectly describes the concept of technology as a bridge between science and new products." Technology draws heavily on scientific advances and the understanding gained through research and development. It then leverages this information to improve both the performance and overall usefulness of products, systems, and services.

In the context of a business, technology has a wide range of potential effects on management:

Professor Michael Porter of Harvard Business School is one of many business analysts who believe that technology is one of the most significant forces affecting business competition. In his book Competitive Advantage (1985), Porter noted that technology has the potential to change the structure of existing industries and to create new industries. It is also a great equalizer, undermining the competitive advantages of market leaders and enabling new companies to take leadership away from existing firms. In a Grant Thorton LLP survey conducted during late 2004, 47 of 100 mid-size manufacturing businesses agreed that innovation had become increasingly import to the industry. As M.F. Wolff reported, corporate strategists were encouraging this by bringing product designers along on customer visits, offering rewards and recognition programs to employees with innovative ideas, including innovation as a priority in business strategies, setting revenue goals attributable to innovation, and looking for "willingness and ability to innovate" when making hiring decisions.

TECHNOLOGY MANAGEMENT

Since technology is such a vital force, the field of technology management has emerged to address the particular ways in which companies should approach the use of technology in business strategies and operations. Technology is inherently difficult to manage because it is constantly changing, often in ways that cannot be predicted. Technology management is the set of policies and practices that leverage technologies to build, maintain, and enhance the competitive advantage of the firm on the basis of proprietary knowledge and know-how.

The U.S. National Research Council in Washington, D.C., defined management of technology (MOT) as linking "engineering, science, and management disciplines to plan, develop, and implement technological capabilities to shape and accomplish the strategic and operational objectives of an organization" (National Research Council, 1987). While technology management techniques are themselves important to firm competitiveness, they are most effective when they complement the overall strategic posture adopted by the firm. The strategic management of technology tries to create competitive by incorporating technological opportunities into the corporate strategy.

Technology management needs to be separated from research and development (R&D) management. R&D management refers to the process by which a company runs its research laboratories and other operations for the creation of new technologies. Technology management focuses on the intersection of technology and business, encompassing not only technology creation but also its application, dissemination, and impact. Michael Bigwood suggests that New Technology Exploitation (NTE) lies somewhere between R&D and New Product Development, with characteristics of the cyclical learning process of scientific discovery and the more defined and linear process of product development.

Given these trends, a new profession, known as the technology manager, emerged. Defined as a generalist with many technology-based specializations and who possessed new managerial skills, techniques, and ways of thinking, technology managers knew company strategy and how technology could be used most effectively to support firm goals and objectives.

Educational programs supporting this career grew as well. Formal Technology Management programs became available in the 1980s and these were largely affiliated with engineering or business schools. Coursework was limited, and the field was just finding its own unique focus. During the 1990s, the increasing integration of technology into overall business function and strategy helped to align technology management more closely with business programs. Most graduate programs in the 2000s were offered through business schools, either as separate MBA tracks or as MBA concentrations. Coursework in these programs shifted emphasis from technology to management, centering around innovation management and technology strategy, while touching on other areas such as operations, new product development, project management, and organizational behavior, among others. There was still little specialization in any particular industry.

During the early 2000s, another shift took place. Global distribution, outsourcing, and large-scale collaboration impacted the nature of technology management (TM) and preparatory educational programs. At least two MBA programs were shifting their technology management focus to "innovation and leadership," with particular emphasis on real-world problem solving in partnership with large corporations.

TECHNOLOGY AND INNOVATION

Technological change is a combination of two activities invention and innovation. Invention is the development of a new idea that has useful applications. Innovation is a more complex term, referring to how an invention is brought into commercial usage. The distinction between the two is very important. As an example, Henry Ford did not invent the automobile; companies in Europe such as Daimler were producing cars well before Ford founded his company. Henry Ford instead focused on the innovation of automobiles, creating a method (mass production) by which cars could be manufactured and distributed cheaply to a large number of customers.

Figure 1 Examples of Technological Innovation and Market Growth Source: Centre for Technology Management, 2005.
Figure 1
Examples of Technological Innovation and Market Growth
Source: Centre for Technology Management, 2005.

The practice of technology management and the development of technology strategy require an understanding of the different forms of innovation and the features of each form.

There are two important steps required to properly manage corporate innovation. First is to correctly identify a project as a new product vs. a technological innovation, so a proper development process can be used (the first may be a more traditional stage-gate process; the second should be more cyclical and iterative). Second, managers need to identify what category an innovation falls under, since each type of innovation has its own challenges. In the aircraft industry, for example, an improvement in the construction of a wing is an incremental innovation. Such a new technology can be introduced relatively easily and integrated with existing products. An example of a generational innovation is the introduction of the Boeing 777, a new class of aircraft different from previous models. While similar in appearance to the 767 and its predecessor, the 777 introduced a whole new set of technologies and capabilities, requiring tremendous investment by Boeing and its business partners. A radical innovation in aircraft was the introduction of the jet engine, which completely changed the performance of aircraft compared to propeller-driven airplanes. Finally, the concept of a flying machine as envisioned by the Wright Brothers exemplifies an architectural innovation. Prior to the Wright brothers, the concept of mechanical flight had been invented and discussed. The Wright brothers actually developed and demonstrated a design that made human flight a reality.

INNOVATION MANAGEMENT

Invention is an activity often identified with a single engineer or scientist working alone in a laboratory until he or she happens upon an idea that will change the world, like the light bulb. In reality, industrial invention, at least since the time of Edison, has involved many people working together in a collaborative setting to create new technology. Innovation requires an even broader set of people, including manufacturing engineers, marketing and sales managers, investors and financial managers, and business strategists. The methods for organizing this set of people to bring a new idea from the laboratory to the marketplace form the basis of the discipline of innovation management.

Innovation traditionally has been viewed as a linear process, which involves several stages in sequence: research, development, manufacturing, marketing, and ultimately, reaching the customer.

In each step, a group of employees take the idea as it is passed to them from the previous stage, modify it to accomplish a specific function, and pass it on to the next stage. Each team involved in the process has a clear function. Researchers are responsible for creating a working demonstration of the technology, developers and engineers turn it into something that can be produced, manufacturing engineers actually turn out the product, and marketers sell it to customers.

This linear model of innovation has proven to be a misconception of the process, however. For example, problems during the manufacturing process may require researchers to go back and change the technology to facilitate production. The technology may reach the marketing stage, only to turn out to be something no one wants to buy. Technology cannot be handed off between stages like a baton in a relay race. In any case, managing innovation in a sequential process would take a very long time, especially if each stage needs to perfect the technology before it can move on to the next stage. Some models simply add on to the linear stage-gate development approach, adding R&D discovery or planning phases to the front end of the process.

An alternative to the linear model of innovation was offered by the expanded, chain-linked model of innovation. This model captures the interactions between the different stages of innovation in a more complete fashion. Some of the important aspects of innovation highlighted by this model are:

While the chain-linked model of innovation is more difficult to comprehend and analyze than the linear model, it is ultimately more rewarding as it tracks more closely to the way that innovations actually progress on their way from the laboratory to the marketplace.

Another innovation process suggested was new technology exploitation (NTE), as suggested by Bigwood, which resides somewhere between new product development and "pure science." He defined NTE as "the testing of novel technical approaches specifically aimed at achieving a pre-defined result (target performance, cost reduction, etc)." It is an iterative process, allowing for the more cyclical learning process of scientific discovery, but clearly working toward tangible goals and benefits.

Another technology management process, Strategic Technology Roadmapping (TRM) was discussed by Rachel Wells et al in Research Technology Management. Technology road mapping is both a process and a communication. TRM aims to "integrate technology issues considerations with the strategic business context, to identify those technologies that have the greatest potential to meet business goals, and to accelerate the transfer of technology into products." TRM makes use of visual aids to show links between R&D programs, capability targets, and requirements. It also seeks to help coordinate technology plans at a strategic level, and to help senior managers make better technology investment decisions. It also helps to manage conflicts between technology "push" and market "pull," which are discussed in more detail below.

INTERNAL FORCES
AFFECTING INNOVATION

While users and other external organizations are important sources of ideas for innovations, the internal organization of a company has the greatest impact on its capability for creating innovation. The ideal work environment for innovation does not exist. Instead, innovation is facilitated through the tension and balance between various conflicting but necessary forces:

One enduring debate in technology and innovation management is whether small firms are inherently more innovative than large ones. The answer appears to be different at different times. For example, the small firm Apple Computer appeared to turn out many more innovations in the 1980s than its large rival, IBM, but in the 1990s, IBM used its huge resources to regain technological dominance in computers while Apple floundered. During the 2000s, Apple came back strongly with innovative designs and technology, such as the iPod, and made big waves in the consumer arena. Also during 2004, IBM elected to sell its personal computing division to focus on information technology and software development. IBM appeared to be shedding some weight to focus on innovation and development in core business areas.

It may be more accurate to say that small firms are better organized to handle specific types of innovation compared to large firms. Small firms have very streamlined organizational structures that have few layers of management, and managers are multi-functional; i.e. they may handle business development as well as technical work, or they may be project leaders and handle company-wide finances. This cross-disciplinary approach favors flexibility and efficiency, which in turn is more conducive to radical innovation. The small firm model of organization is quite different from large established firms in which personnel in general have more narrow tasks and bureaucratic processes tend to suppress creativity and individual initiative.

Large companies are geared for production and distribution, which are large-scale undertakings that do not accommodate rapid change. Hence, the organizational structure of a large firm is quite matrix oriented engineering disciplines are assigned to projects, and a central laboratory supports research and development. Innovation is organized in a more linear fashion, and internal organization favors discipline and focus. This type of organization is better suited to incremental innovation, since it can identify problems and focus tremendous resources on solving them.

There are several ways in which small and large firms can overcome natural tendencies to gain proficiency in all types of innovation. Lockheed Martin, a large aerospace firm, was the originator of the Skunk Works, a lean, aggressive organization focused on R&D and rapid development of cutting-edge technologies. The group is kept completely isolated from the larger corporate organization, so that the engineers are unencumbered with overhead issues that are handled by other resources within the company at large. From the cultural point of view, aside from the infrastructure a large company has to handle regulatory matters as well as financial support. A small firm and a Skunk Works of a large firm can be very similar.

A small firm, in turn, can partner with a larger firm to gain access to the resources and infrastructure needed to address incremental as well as radical innovation. Carayannis et al. (1997) found that small firms tended to form technology-based strategic alliances as a source of financing. The funds gained through the alliance with a larger firm are then devoted to acquiring and developing tangible strategic assets such as proprietary technology, general working capital, and skills and know-how possessed by key managerial personnel. The large firm in the alliance receives technology-related intellectual property rights (IPRs) and marketing rights more often than equity, manufacturing rights, and so forth, in exchange for their capital infusion. An alliance with a large firm can create a powerful combination that benefits both the small company and its established partner.

Table 1 Technology vs. Market Push and Pull
Table 1
Technology vs. Market Push and Pull

The Technology Perspective
Market Pull Market Push
Technology Pull Market Satisfying Technology Satisfying
Technology Push Technology Satisfying Market Seeding

During the early 2000s, companies were still seeking ways to build radical innovation competencies into their own organization. O'Connor and Ayers reported on a three-year study of twelve large firms (such as GE, Corning, IBM, and Shell Chemicals, among others) who worked to develop this competency, and identified three key competencies that were critical to success:

Finally, O'Connor and Ayers concluded that no one model works for all companies. Of the twelve companies studies, four had very distinct but different approaches, each influenced by that company's corporate culture. But nearly all participants in the study acknowledged a need for cultural change within the organization before radical innovation could take place.

EXTERNAL FORCES
AFFECTING INNOVATION

Various forces outside the direct control of the firm can also affect the innovation process. One set of forces relates to the tension between the demands of the market and the capabilities of the technology under development.

A conventional way of analyzing technology development is to contrast the influence of technology push with that of market pull. The primary difference between a push or pull scenario is between solving a problem and accommodating a solution. Technology push is the process of solving a problem by providing a technical answer to a market need (which can be either anticipated or existing). Market pull involves solving a problem to provide a market answer to a technical need, or accommodating a technical solution by finding market uses. The dynamic balancing act between technology push and market pull drives the speed and acceleration of technological change, and in the process creates significant windows of market opportunity as well as competitive threats to the established technologies.

The terms push and pull can be expanded to encompass either a technology or market point of view:

Table 2 Technology vs. Market Push and Pull Source: Carayannis, Elias and Samanta Roy, Davids vs. Goliaths in the Small Satellite Industry: The Role of Technological Innovation Dynamics in Firm Competitiveness. International Journal of Technova
Table 2
Technology vs. Market Push and Pull
Source: Carayannis, Elias and Samanta Roy, "Davids vs. Goliaths in the Small Satellite Industry: The Role of Technological Innovation Dynamics in Firm Competitiveness." International Journal of Technovation, under review

The Market Perspective
Market Pull Market Push
Technology Pull Reacting to Demand Seeding Demand
Technology Push Meeting Demand Anticipating Demand

In Figures 1 and 2, we interpret the possible configurations combining market and technology push and pull from a technology and a market perspective. The emphasis swings from a reactive stance, through an accommodating one, to a proactive one (from reacting to demand and satisfying markets to seeding and anticipating demand). The relative strength of each of the four forces (technology push or pull and market push or pull) varies during the lifecycle of the technology.

Technologies, as they develop, often follow a pattern known as the technology S-curve. In the first phase of development, tremendous investment in the technology yields relatively little improvement in performance, since the investment is devoted to researching various aspects of the technology, many of which do not have useful results. At some point, the technology takes off when a key breakthrough is made. At this critical moment, called an inflection point, the performance of the technology improves rapidly. During this second, or growth, phase, additional investment is focused on the technological breakthrough, with rapid results. As that breakthrough technology is more fully understood and exploited, the rate of improvement begins to slow and the technology enters its third phase, maturity. Finally, the technology reaches a point where additional research yields little new knowledge and few results. At this point, the technology begins the final stage, decline, and often becomes obsolete as better technologies are developed and introduced to the market.

Technology and innovation management constitute a discipline of management that continues to gain importance, impact, and attention. As technology is a pervasive force in business and in society, management of technology helps to ensure that the development of new technology and its applications are aimed at useful purposes, and that the benefits of new technology outweigh the disruptions and difficulties that accompany innovation. While it is possible to specialize in technology management, this discipline also constitutes a set of skills that all managers should possess in the modern technology-intensive and technology-driven world of business.

SEE ALSO: Innovation ; Management Information Systems ; New Product Development ; Organizational Learning ; Technology Transfer

Elias G. Carayannis and

Jeffrey Alexander

Revised by Wendy H. Mason

FURTHER READING:

Betz, Frederick. Executive Strategy Strategic Management and Information Technology. Wiley, 2001.

Bigwood, Michael P. "Managing the New Technology Exploitation Process." Research-Technology Management, November-December 2004, 38.

Burgelman, Robert A., Clayton M. Christensen, and Steven C. Wheelwright. Strategic Management of Technology and Innovation. McGraw-Hill/Irwin, 2003.

Carayannis, Elias, and Jeffrey Alexander. "The Wealth of Knowledge-Converting Intellectual Property To Intellectual Capital In Co-opetitive Research and Technology Management Settings." International Journal of Technology Management 17, no. 3/4 (1998).

Carayannis, Elias, S. Kassicieh, and R. Radosevich. "Financing Technological Entrepreneurship: The Role of Strategic Alliances in Procuring Early Stage Seed Capital." Paper presented at the 1997 Proceedings of the Portland International Conference on Management of Engineering and Technology, Portland, OR, July 1997.

"Fitch Ratings Comments on IBM's Sale of PC Business." Business Wire, 8 December, 2004.

Harrison, Norma, and Danny Samson. Technology Management: Text and International Cases. McGraw-Hill/Irwin, 2001.

Khalil, Tarek. Management of Technology. McGraw-Hill Science/Engineering/Math, 1999.

Miller, Roger, and Serghei Floricel. "Value Creation and Games of Innovation." Research-Technology Management, November-December 2004, 25.

Nambisan, Satish, and David Wilemon. "Industry Should Help Redefine the Agenda for Technology Management Education." Research-Technology Management, November-December 2004, 9.

O'Connor, Gina Colarelli, and Alan D. Ayers. "Building a Radical Innovation Competency." Research-Technology Management, January-February 2005, 23.

Porter, Michael. Competitive Advantage. New York: The Free Press, 1985.

Rivas, Rio, and David H. Gobeli. "Accelerating Innovation at Hewlett-Packard." Research-Technology Management, January-February 2005, 32.

Rogers, Everett M. The Diffusion of Innovations. New York: The Free Press, 1995.

Rosenberg, Nathan and Ralph Landau. "An Overview of Innovation." In The Positive Sum Strategy. Washington National Academy Press, 1986.

Rosenbloom, Richard and William Spencer, eds. Engines of Innovation U.S. Industrial Research at the End of an Era. Cambridge, MA: Harvard Business School Press, 1996.

Schilling, Melissa. Strategic Management of Technological Innovation. McGraw-Hill/Irwin, 2004.

U.S. National Research Council. Management of Technology The Hidden Competitive Advantage. Washington National Academy Press, 1987.

U.S. Office of Technology Assessment. "Innovation and Commercialization of Emerging Technologies." Report OTA-BP-ITC-165, Washington GPO, September 1995. Available from http://www.ota.nap.edu.

Wells, Rachel, et al. "Technology Roadmapping for a Service Organization." Research-Technology Management, March-April 2004, 46.

Wolff, M.F. "Manufacturers Seek More Innovation." Research-Technology Management, January-February 2005, 6.



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