Chapter 12 The Macro Environment – Technological Influences By the end of this chapter you should have a better understanding of: the term ‘technology’; key aspects of technological development; the nature of technological influences and their impact on organisations; some of the current and emerging ethical and international issues in the technological environment. Chapter 12 Unlocking the Business Environment

What do we mean by the term ‘technology’? Technology is a broad term that refers to the application of science and/or knowledge for a specific purpose. In a business context that specific purpose might be the development and production of a product or service. Technology is concerned with the development of: Materials. Products. Processes. Chapter 12 Unlocking the Business Environment

What do we mean by the term ‘technology’? Technological developments, e.g. innovative product features of existing products/materials or new products/materials, will lead to technological change. Technological change is closely linked to the key relationship between technology and research and development (R&D). Process technological change concerns innovations in how products/materials are made and how organisations are managed. Chapter 12 Unlocking the Business Environment

Key technological influences – technology and change Technological advances have led to both new products and processes. For example: Developments in motion and gravity sensors made the Nintendo Wii possible. Developments in laser technology made possible Blu-Ray-enhanced photo and audio quality. Developments in robotic technologies led to changes in methods of production and made possible robotic assembly lines for car manufacturing. Chapter 12 Unlocking the Business Environment

Key technological influences – technology and change Technological advances have led to: changes in distribution methods; changes in the storage and dissemination of information; changes in administrative processes. Technological change can offer a new strategic direction for an organisation, or involve changes to operational procedures. Chapter 12 Unlocking the Business Environment

Key technological influences – information technology IT has had an ever-increasing and dramatic effect on the way we work and in our personal lives. Technological developments have transformed the industrial landscape. Some products are in severe decline as a result of technological change, for example DVD has largely replaced the production of the video. There are opportunities where new types of industries have been created, for example the development of the electronic gaming industry. Chapter 12 Unlocking the Business Environment

Key technological influences – information technology IT has made possible almost-instant communications globally – a key feature of the rapid rate of globalisation over the last 25 years. IT impacts on organisations’ administrative systems. Chapter 12 Unlocking the Business Environment

Key technological influences – artificial intelligence Artificial intelligence refers to a branch of computer science that aims to create intelligent machines (or in layman’s terms, a computer that can think for itself). To try to simulate something as complex as the human brain in order to create intelligent machines involves a highly complex array of different systems and programming. Artificial intelligence is in the early stages of development. A key aim is the development of a humanoid robot. Chapter 12 Unlocking the Business Environment

Key technological influences – biotechnology Biotechnology can be defined as: ‘The application of science and technology to living organisms, as well as parts, products and models thereof, to alter living or non-living materials for the production of knowledge, goods and services.’ (OECD, 2005). The applications of biotechnology are broad – including uses in medicines, agriculture and food science – and will change over time. OECD (2005) ‘Statistical Definition of Biotechnology’, www.oecd.org/document/42/0,3343,en_2649_37437_1933994_1_1_1_37437,00.html (accessed 17 June 2010). Chapter 12 Unlocking the Business Environment

Key technological influences – biotechnology The importance of the biotechnology sector in the UK is reflected both in terms of the research and development undertaken and of the high levels of investment currently made in the sector. Applications of biotechnology can be seen, inter alia, in the areas of genetic engineering, gene therapy and nano-biotechnology. Chapter 12 Unlocking the Business Environment

Key technological influences – nanotechnology Nanotechnology involves the creation of new methods of manufacturing, controlling matter at an atomic scale. It is often referred to as the field of nanotechnologies because of the wide variety of different materials and technologies involved. The potential for application of nanotechnologies is in a variety of fields, including IT, electronics and medicine. Nanotechnology can benefit society with applications in industry, environment and health. Research needs to be conducted into nanotechnologies to fully understand the potential benefits and potential harm. Chapter 12 Unlocking the Business Environment

Key technological influences – research and development Research can either be applied or theoretical (pure). Development is the application of research in the production process. Universities undertake most of the pure (theoretical) research in the UK. The private sector undertakes most of the applied research and development. Technological innovation can lead not only to an organisation’s economic growth, but also a nation’s, hence the amount of R&D undertaken is crucial. Chapter 12 Unlocking the Business Environment

Current and emerging ethical and international issues There are both costs and benefits to technological development. Often, the perspective taken is from an individual viewpoint. It is likely that both biotechnology and nanotechnology could impact positively on our lives – but can anyone really say at what cost? Any risk analysis or cost–benefit assessment may be made with business interests underpinning them. Strong independent bodies are therefore needed to advise the policy and regulator makers (government bodies) to ensure due process. Chapter 12 Unlocking the Business Environment

Current and emerging ethical and international issues Some of the fear lies in the ‘fear of the unknown’, the fact that the outcomes of using some of these technologies long term are not yet fully understood. The pragmatic approach is to carefully assess the risks and benefits, and in the absence of full scientific knowledge, to proceed with caution, i.e. do not introduce any new science and/or technology if there is a possibility that the costs outweigh the benefits, even if there is no evidence yet available to demonstrate that this is so. Chapter 12 Unlocking the Business Environment

Current and emerging ethical and international issues Technology has been a major feature of economic growth – and hence increase in living standards. The more that economic growth occurs the more technological development there is. The technology gap between developed and developing economies is one area of concern. To close the technological gap, a combination of ‘low tech’ and ‘high tech’ solutions are needed. Chapter 12 Unlocking the Business Environment

Unlocking the Business Environment Summary The term technology is the application of science and/or knowledge to the development and production of a product or service. Technology is concerned with the development of materials, products and processes. Technology impacts on organisational change in terms of potential changes to products, methods of production, distribution methods and administrative processes. Change to organisations can be strategic or operational. Chapter 12 Unlocking the Business Environment

Unlocking the Business Environment Summary The main sources of current and potential future technological change are: IT, artificial intelligence, biotechnology and nanotechnology. The majority of technological change arises from research and development. Research can be applied or pure (theoretical). Development is the application of research in the production process. Technology can pose both opportunities (such as the creation of new industries) and threats (such as job losses). Chapter 12 Unlocking the Business Environment

Unlocking the Business Environment Summary There are both costs and benefits to technological development. Often the perspective taken is one from an individual viewpoint. Technology plays a significant role in economic growth and helping to raise people’s living standards. Technology is needed by developing countries to narrow the gap between ‘rich and poor’ nations. People in developing countries can use ‘low tech’ solutions for incremental development to help lift them out of poverty. Chapter 12 Unlocking the Business Environment