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Technological environment UNIT 5.  The natural and technological environments present the impulsive potential for development while the other environments.

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Presentation on theme: "Technological environment UNIT 5.  The natural and technological environments present the impulsive potential for development while the other environments."— Presentation transcript:

1 Technological environment UNIT 5

2  The natural and technological environments present the impulsive potential for development while the other environments like the economic, social, and political and government factors represent the propulsive potential for development.

3 Impulsive and Propulsive Factors Affecting Business Given the natural and technological environments, the propulsive factors determine the extent of exploitation of the development potential and the direction, pace and pattern of development.

4 Natural /Physical environment  Availability of Raw Materials  Labour Supply  Transport Facilities – Geographical location  Climatic Considerations

5 Innovation  In the business context, innovation may be defined as Technical, industrial, and commercial steps which lead to the marketing of new manufactured products and to commercial use of new technical processes and equipment.

6 Radical innovation  A basic technological innovation that establishes a new functionality.  Eg: steam engine

7 Incremental innovation  A change in an existing technology system that does not alter functionality but incrementally improves performance, features, safety or quality or lowers cost.  Eg: governor on a steam engine

8 Next-generation technology innovation  A change in an existing technology system that does not alter functionality but dramatically improves performance, features, safety or quality or lowers cost and opens up new applications.  Eg: technology in airplanes.

9 Product and process innovations

10 Technological leadership and followership  Technological leadership – “a firm seeks to be the first to introduce technological changes that support its generic strategy. Leadership can be established in technologies employed in any value activity.  Technological followership refers to a conscious and active strategy in which a firm chooses not to be the first on innovations.

11 Technology and competitive advantage  Technological change lowers cost so that the firm’s technology lead is sustainable  Technological change makes uniquenesse in favour of a firm  First mover advantage  Improves overall industry structure

12 Sources of technological dynamics Innovative drive of the company Customer needs and expectations Demand conditions Supplier’s offerings Competitive dynamics Substitutes Social forces Research organisations/technical facility Government policy

13 Technology transfer  Technology transfer is the process by which commercial technology is disseminated. The transaction may or may not be a legally binding contract, but it will involve the communication, by the transferor of the relevant knowledge to the recipient.

14 Levels of TT Operational Level: At the bottom level are the simplest ones, needed for operating a given plant: these involve basic manufacturing skills, as well as some more demanding troubleshooting, quality control, maintenance and procurement skills. Duplicative Level: At the intermediate level are duplicative skills, which include the investment capabilities needed to expand capacity and to purchase and integrate foreign technologies. Adaptive Level: At this Technological Self-reliance level, imported technologies are adapted and improved, and design skills for more complex engineering learned. Innovative Level: This level is characterised by innovative skills, based on formal R&D, that are needed to keep pace with technological frontiers or to generate new technologies.

15 Forms of TT  Internalised form – refers to investment associated TT, where control resides with the technology transferor. The transferor normally holding the majority or full equity ownership.  Externalised form – refers to all other forms such as joint ventures, licensing, strategic alliances etc.

16 Methods of TT  Training or employment of technical expert  Contracts for supply of machinery and equipment  Licensing agreements  Turnkey projects

17 Features of TT  Principal instrument of TT – MNCs  Discouraging to local industries  Dumping of obsolete technology  Higher funds outflow than technological inflow  Foreign exchange policies of the developing countries – rely much on import substitution.  Irrelevant to socio-economic conditions of developing country

18 Appropriate technology The technology suitable in one environment may not be appropriate in a different environment due to several reasons. The latest or highly sophisticated technology may not be appropriate in several environments. Intermediate technology, which often means a technology which combine elements of traditional technology with elements of modern technology, gained importance in the developing countries.


20 Time Lags in technology adoption and absorption  Time and pace of absorption and penetration of technology may differ significantly between markets  Eg – TV and electronic typewriter

21 Science and Technology Policy 1. To ensure that the science and technology is fully integrated with all spheres of national activity. 2. To ensure food, agricultural, nutritional, environmental, water, health and energy security of the people on a sustainable basis. 3. To vigorously foster scientific research in universities and other academic, scientific and engineering institutions; and attract the brightest young persons to careers in science and technology. 4. To mount a direct and sustained effort on the alleviation of poverty, enhancing livelihood security, removal of hunger and malnutrition, reduction of regional imbalances, both rural and urban, and generation of employment, by using scientific and technological capabilities along with our traditional knowledge pool. 5. To promote the empowerment of women in all science and technology activities and ensure their full and equal participation. 6. To provide necessary autonomy and freedom of functioning for all academic and R&D institutions. 7. To establish an Intellectual Property Rights (IPR) regime that maximizes the incentives for the generation and protection of intellectual property by all types of inventors. 8. To promote international science and technology cooperation towards achieving the goals of national development and security, and make it a key element of our international relations.

22 9. To accomplish national strategic and security-related objectives, by using the latest advances in science and technology 10. To encourage research and application for forecasting, prevention and mitigation of natural hazards, particularly, floods, cyclones, earthquakes, drought and landslides 11. To establish an Intellectual Property Rights (IPR) regime which maximizes the incentives for the generation and protection of intellectual property by all types of inventors. The regime would also provide a strong, supportive and comprehensive policy environment for speedy and effective domestic commercialization of such inventions so as to be maximal in the public interest. 12. To integrate scientific knowledge with insights from other disciplines, and ensure fullest involvement of scientists and technologists in national governance so that the spirit and methods of scientific enquiry permeate deeply into all areas of public policy making. 13. To ensure, in an era in which information is key to the development of science and technology, that all efforts are made to have high-speed access to information, both in quality and quantity, at affordable costs; and also create digitized, valid and usable content of Indian origin.

23 Science and Technology initiatives- India  Emerging competitive environment, cooperation and coordination between Indian enterprises and R&D institution is a matter of compulsion and not a matter of choice  Difficulty of SMEs in engaging themselves in competitive R& D because of high costs  Need for cooperation to bring value addition through environmentally clean and economically viable processes  Provisions for developing product/process up gradation, productive improvements, strategic alliance with partners  Government intervention in shaping cooperative endeavours  Priding flexibility to R&D institutions  Increased financial assistance to industries having R& D units.  Increased number of patents at national and firm levels.  Increased number of research, space institutes  Promotion of PHD by providing scholarships

24 Technological Collaboration and government Policy  Institutional Arrangement  Research and Development by industry  Incentives  New technology initiatives

25 In house R & D in Indian Industries  A company’s R& D intensity(its spending on R&D as a percentage of sales revenue)is the principal means of gaining market share in global competition.  India’s spending of R&D is less than 1% of GNP.  But sector wise spending on R&D has increased(pharmaceuticals)  Indian arms of multinationals have much smaller R&D expenditure compared to Indian counterparts because parent company do their research in home countries  In India earlier R&D expenditure was almost negligible, they only focused on copying their foreign counterparts  Rate of technology transfer has been slow  Time between innovation and commercialization has been considerably reduced  Shares of India in number of patents has been increasing  Since rapid industrialization is necessary to catch up with advanced countries,GOI set up R&D centres,space research centres, agricultural research establishments, ICSR.  Many universities have been set up to provide higher education in science and technology and management

26 IT revolution and Business Environment  Convenience in conducting business worldwide, facilitating communication across borders which brings globe closer  An electronic meeting and trading place adds efficiency in conducting business.  Power to consumers as they gain access to limitless options and price differentials  Efficiency in distribution

27 Impact of technology on globalization  Economies of scale  Trade liberalization  Reduction in transport costs  Patents encourages internationalization  Improvements in communication

28 ICT and Marketing  Internet shopping websites  Wider customer base  Efficient after sales  Lesser cost of transaction  Easy to identify customers  Plan production better  Reduce paperwork and wasteful processing  Respond faster to market changes  Reduce unproductive time

29 Difference in the levels of Science and Technology across countries  China and India represent a 2.3 billion people with a significant number of highly skilled engineers with low salaries in comparison with Western standards.

30 EMS Standard An Environmental Management System (EMS) is a set of management procedures that allows an organization to identify, evaluate and reduce the environmental impact of its activities. A well designed EMS can help an organization address its regulatory demands in a systematic manner thereby reducing the risk of noncompliance. An EMS can also help address non-regulated issues such as pollution prevention, odor management, water and energy conservation. In addition, an EMS can promote stronger operational control, and as a result reduce inefficiency and waste. Pollution prevention factsheet/environmental policy

31 EMS Benefits The expected benefits from an EMS include: # improved overall environmental performance # identification of pollution prevention opportunities # improved compliance # enhanced operational control and efficiency # cost savings # reduced risk (environmental, health and safety) # improved internal communication # improved external relations and public image

32 ISO Introduced in 1996, the ISO series of standards are internationally recognized standards for environmental management. The ISO14000 series includes standards for; environmental management systems, environmental auditing, environmental performance evaluation, environmental labels and declarations and life cycle assessment. Perhaps the best known of these standards is ISO 14001, the standard for environmental management systems. The ISO standard includes information on all of the elements needed to develop an environmental management system in an organization.

33 ISO and Environmental Performance The ISO14001 standard describes a management system. It does not prescribe environmental performance targets, require the use of particular technologies or set goals for environmental outcomes. It is however, generally accepted that once an organization identifies its environmental aspects, evaluates its potential impacts on the environment and sets up a system to manage those impacts improved environmental performance will occur.

34 The Standard Elements of an ISO Compliant EMS  Environmental Policy.  Planning  Implementation.  Checking and Correction.  Management Review.

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