Technology Management and Innovation Chapter 2 PDF

By: Assefa Balda (Ph.D.)  2.1 Technology Intelligence (TI) What is technology Intelligence?  Technology Intelligence (TI) is an activity that enables companies to identify the technological opportunities and threats that could affect the future growth and survival of...

By: Assefa Balda (Ph.D.)  2.1 Technology Intelligence (TI) What is technology Intelligence?  Technology Intelligence (TI) is an activity that enables companies to identify the technological opportunities and threats that could affect the future growth and survival of their business.  The center for Technology Management defines ‘Technology Intelligence’ as “the capture and delivery of technological information as part of the process whereby an organization develops an awareness of technological threats and opportunities.”  Technology intelligence aims to capture and disseminates the technological information needed for strategic planning and decision making.  Companies install an intelligence system (technology, market, business or competitive intelligence) to collect and analyze information on market, product, and technology changes and on other environmental transformations in order to increase their decision-making quality and competitiveness  As technology life cycles shorten and business become more globalized; having effective TI capabilities is becoming increasingly important.  TI provides an understanding of current and potential changes taking place in the environment.  TI provides important information for strategic decision-makers.  TI facilities and fosters strategic thinking in organizations.  If conducted properly, TI leads to enhanced capacity and commitment to understanding, anticipating and responding to external changes.  Levels of Technology Intelligence The three levels of Technology Intelligence are: 1. Macro level- Technological trends & development which can influence entire economy/ major sectors 2. Industry or business level- Technological trends & development which can influence specific industries/ business. 3. Program or project level: technological trends & developments which can influence specific technology related program or project. The above three levels differ in terms of:  Breadth of technology  Clarity of trends  Degree of precision/accuracy of the trends Different levels of technology intelligence can be applied /useful in different context.  Table 2.1 Difference Among Levels of Intelligence Level Characteristics Applicability Macro  General technology  Long-range trends focus  Directional, Imprecise,  National and ambiguous corporate level Business  Specific technologies  Medium-range  General trends focus  Business strategy Program /  Specific technologies  Short-range project  Specific trends focus  Product, process, and materials.  What is Technology Mapping?  Technology Intelligence could be both Internal as well as External.  Internal technology intelligence is called technology audit.  External technology intelligence is called technology mapping.  Mapping technology environment refers to the process of gathering external data and analyzing it to derive the intelligence for major strategic decisions. Figure 2.2 Mapping technology environment The process of mapping the technology environment consists of four interlinked steps: Step1. Scanning the environment to detect ongoing and emerging changes Step 2. Monitoring specific environment trends and patterns Step 3. Forecasting the future direction of technological changes Step 4. Assessing the current and future environmental changes for understanding their strategic and organizational implications. Figure 2.3 Steps in gathering Technology Intelligence  2.2 2.2 Technology Technology Forecasting Forecasting What What is is Technology Technology Forecasting? Forecasting?  Technology Technology Forecasting Forecasting (TF) (TF) is is aa planning planning tool tool to to be be at at use use in in dynamic dynamic environments environments which which undergo undergo rapid rapid changes. changes.......  Technology Technology Forecasting Forecasting can can be be defined defined as as aa probabilistic probabilistic prediction prediction of of technological technological changes changes inin terms terms ofof future future characteristics characteristics of of useful useful machines, machines, systems systems or or procedures. procedures.  In In other other words, words, technology technology forecasting forecasting attempts attempts to to predict predict rate rate of of technology technology advance. advance.  Primarily Primarily TF TF attempts attempts toto bring bring potential potential future future technology technology into into focus. focus.  The technological backwardness of developing countries is primarily due to lack of planned attention to the maintenance, development of technology capabilities and utilizing resources efficiently.  Rapid technology progress and the increased rate of obsolescence of technologies necessitate technology forecasting for any planning process.  Since technologies play a major role in planning of business, industry, government and society's growth, it becomes essential to determine its direction and magnitude by systematic analysis and study.  Need for technology forecasting Future oriented R & D Prevention of import of obsolete technologies Anticipating technical innovation Shift towards appropriate technology Technology Effective technology transfer forecasting is Development of exportable technologies essential for the Leap/jump across generations following reasons: Rapidity of innovations Trade restrictions, etc  Elements of Technology Forecasting: 1. Time of the forecast-a single point of time, or a time span. 2. Approach in technology forecasting 3. Statement of functional capability /performance characteristics of technology  –a quantitative measure of its ability to carry out the functions. 4. Statement of probability  probability of achieving a given level of functional capability by a certain time or  Probability distribution over the levels that might be achieved by a specific time. or In short: elements of technology forecasting are:  Time  Qualitative  Quantitative  Probability of occurrence depending on the purpose  The time element deals with resource-time relationship.  The qualitative element attempts to identify the factors that are likely to change the activities or technology trends in areas of interest to the forecaster.  The quantitative element attempts to measure and assess the level of performance of various technologies.  The element of probability of occurrence attempts to predict different alternatives and its confidence level.  Benefits of Technology Forecasting:  Since 1990s rate of technological change has become faster. Individual, organization or nation affected by technological change as it invalidates/ cancels/undoes previous resource allocation based on historical facts /data. Therefore, technology forecast is no more avoidable. Following factors necessitates forecast of technology:  To maximize gain from events external to an organization  To minimize loss associated with uncontrollable events external to an organization.  To maximize gain from events that are result of action taken by an organization. To offset the actions To develop policies that apply to people of hostile/ who are not part of antagonistic or the organization. competitive organizations. To develop administrative To forecast demand plans and policies for production and internal to an /or inventory organization. control. To forecast demand To forecast demand to ensure adequate for facilities and staffing capital planning. According to Ralph Lenz, technology forecast can play following specific roles in improving the quality of technology decisions:  The forecast identifies limits beyond which it is not possible to go.  It establishes feasible rates of progress, so that the plan can be made to take full advantages of such rates of progress  It describes the alternatives that are open for choice.  It indicates the possibilities that might be achieved if desired.  It provides a reference standard for the plan. Thus the plan can be compared with the forecast at any point in time to determine whether it can still be fulfilled or whether because of changes in the forecast, it has to be changed.  It furnishes/ provides warning signals which can alert the decision maker that it will not be possible to continue present activities.  Techniques of Technology Forecasting Ideally technology forecasting should be rational and analytical based on available pertinent data. In following three situations / circumstances experts opinion may be sought for making technology forecast:  No historical data exists- as it could be new technology/ new area of research and development  Impact of external factors may be more important than the factors which governed previous development of technology- i.e past data has become irrelevant and cannot be relied for making technology forecast  Ethical or moral considerations may dominate economic and technical considerations thus seeking lesser reliance on available data.  In above three situations, as the historical data is either not available or it has become irrelevant, group of experts are used to make technology forecast: as there is old saying – “two heads are better than one.”  By involving a number of experts there is pooling of divergent ideas and various dimensions may be analyzed in better manner thus leading to better technology forecast.  A. Techniques involving a group of experts are: 1. Committees 2. Delphi B. Other techniques based on historical data are: 3. Exploratory forecasting 4. Normative forecasting  1. Committees: Key advantages of committees are as under:  Sum total of knowledge is greater than individual knowledge  Number of factors considered would be more than those considered by individual  There is pooling of divergent ideas and various dimensions may be analyzed in a better manner  Helps in avoiding individual biases  Better knowledge and awareness of one member may compensate for lack of knowledge of another member. Few limitations associated with committees are:  There is no guarantee that misinformation will be cancelled out by using a group of experts. There is no guarantee that wrong ideas /judgments will be cancelled out by good ideas / judgments.  There is usually social pressure to agree with majority, which may be implicit or explicit.  Reaching agreement because a goal in itself. Good forecasts may thus be watered down in a bid to reach a consensus.  A strong vocal minority may overwhelm majority, thus making process vulnerable to Hijack by dominant individuals.  Vested interests may be presented very strongly in the beginning thus setting defined direction in the beginning  Entire group may share a common bias if a common culture is shared by all of them thus nullifying advantage of the group  There may be emotional involvement of certain member, leading to conflicts  Lot of time and efforts may be consumed in reaching to consensus  2. Delphi Three characteristics that distinguish Delphi from conventional face to face group interactions (like committee) are as under: 1. Anonymity- anonymity is maintained through questionnaire as under:  Avoids possibility of identifying a specific opinion with a particular person.  Originator can thus change his mind without publicity admitting that he has done so.  Each idea can be considered on its merits, regardless of the fact whether group members may have high or opinion about originator.  2. Interaction with controlled feedback  Group interaction is through questionnaires and answer to questionnaires.  Coordinator / moderator picks relevant information and each group member is informed of status of group’s collective opinion and arguments for and against each point of view.  Controlled feedback prevents group taking rigid stand and helps to concerned on its original objectives. 3. Statistical group response  Delphi presents the statistical group response that presents the opinions of entire group giving both the “center” of the group and the degree of spread about that center.  Limitations /Disadvantages of Delphi  The success of Delphi mainly lies in coordinator.  The experts must carry relevant experience  Further like committee, Delphi is based on opinions and not on data.  3. Exploratory Forecasting  An exploratory forecast starts with past and present conditions and projects these to estimate future conditions.  The exploratory forecast is based on technology push and is opportunity oriented i.e, searching for future opportunities.  Exploratory forecast implicitly assumes that reasonable extension of past performance.  Commonly used technique of exploratory forecast is: trend extrapolation.  Trend Extrapolation  Assumption: time series data from the past contains all the information needed to forecast the future.  The forecaster extends a pattern found by analyzing past time series data.  For example: a technological forecasting to forecast future aircraft speed … by studying historical time series of air craft speed records, by finding a pattern (trend), and extending it to the future to obtain a forecast.  4. Normative Forecast  A normative forecast starts with future needs and identifies the technological performance necessary to meet these required needs.  The normative forecast is based on market pull and is mission /need-oriented i.e, finding ways for meeting future needs.  Normative forecast implicitly forecasts the capabilities that will be available on the assumption that needs will be met.  Thus in case of normative forecast, meeting needs on defined future time is highly important.  Few techniques of normative Technological forecasting are as under:  Relevance tree  Decision Matrices: horizontal or vertical  Morphological analysis  Network techniques  Mission flow Diagrams etc. 1. Relevance tree:  It is an organized normative approach starting with a particular objective and used for forecasting as well as planning.  The basic structure looks like an organizational chart and presents information in a hierarchical structure.  The hierarchy begins with the objectives which are further broken down into activities and further in to tasks. …..Relevance tree:  As one descends down the details increase at every level.  The entries when taken together at each level describe the preceding level completely  Also, all activities and tasks depicted should mutually exclusive  for example look at the following examples on environmental Supply chain performance measurement and benchmarking, and market potential of the product Example 1 Example 2 2. Morphological Analysis:  It is a normative technique developed by Fritz Zwicky which provides a framework for exploring all possible solutions to a particular problem.  The morphological analysis involves the systematic study of the current and future scenarios of a particular problem.  Based on this study, possible gaps are identified and the morphological analysis further provides a framework to explore other alternatives to fill these gaps.  3. A mission / control flow diagram (CFD):  Is a diagram to describe the control flow of a business process, process or program.  Mission flow diagrams have been originally conceived by Harold Linstone as a means of analyzing military mission.  This involves mapping all the alternatives routes or sequences by which a given task can be accomplished.  The analyst needs to identify significant steps on each route and determine the challenges / costs associated with each route.  The performance requirements can then be derived for each associated technology and the same can be used as normative forecasts.  4. Network Technology:  Firstly, the elements of a technological forecasting network are formulated for the purpose of converting the qualitative description of a technological system to a stochastic (non-deterministic) network form.  Then, an analytical procedure for the synthesis of the network is given.