Managing Technology and Innovation

An Introduction

Robert Verburg, J. Roland Ortt, Willemijn M. Dicke, Robert Verburg, J. Roland Ortt, Willemijn M. Dicke

• Publisher: Routledge
• Year: 2006
• eBook ISBN: 9781134231942
• Topic: Business
• Subtopic: Business General
• Index: Business

Modern technology and innovation are vital to the success of all companies, be they hi-tech firms or companies seemingly unaffected by technology and innovation; whether established firms or business start-ups. This book focuses on understanding technology as a corporate resource, covering product development, design of systems and the managerial aspects of new and high technology. Topics investigated include:

• the internal organization of high technology firms
• the management of technology in society
• managing innovation
• dilemmas and strategies.

The wide-ranging experience of the teachers and experts contributing to this book has resulted in an integrated, multi-disciplinary, textbook that provides an introductory overview to managing technology and innovation in the twenty-first century.

This text is essential reading for students of business and engineering concerned with technology and innovation management.

Part I General introduction

Chapter 1 Management of technology: Setting the scene

Uldrik E. Speerstra, Robert M. Verburg, J. Roland Ortt and Willemijn M. Dicke

From the Industrial Revolution to the battlefields of the First World War and from the development and mass production of modern medicine to the Internet Revolution, technology has made and unmade societies and shaped the lives of human beings. Since technology plays such a central role in almost all aspects of modern life it may come as no surprise that it also plays a decisive role in corporate development and the competitive positioning of firms. This is no longer just the case for the products and services of the traditional technology-based companies. Today, many companies ranging from financial services firms to logistics companies depend on technology in order to be successful. Technology not only plays a significant role in existing companies but is often the basis for new technologybased start-ups. Technological entrepreneurship has even become an important driver in the economies of many countries in the world, or, as Zehner (2000) points out:

Over 95% of all scientists and engineers who ever lived is working today. Scientific and technical discoveries can leap from the laboratory to the marketplacein months instead of years. In addition, scientific and technical knowledge is likely to be found in Singapore or São Paulo as in Silicon Valley.

(p. 283)

At the beginning of the twenty-first century the pace of scientific and technical knowledge production has increased in such an unprecedented way that some even speak of a “technology explosion” (Zehner, 2000). Zehner’s technology explosion, the accelerating rate of technological diffusion and the globalization of technology are trends that set the agenda for senior strategic executives. And, indeed, in boardrooms and at campuses alike, CEOs and starting entrepreneurs are trying to address challenging questions such as: “How do the abundant technological opportunities affect our mission, objectives and strategies?,” “What kind of technology do we need and when?,” “How do we procure the technology we need?,” and “How do we implement the required technology in our operations?.” The optimal utilization of technology across all business functions is a way to create customer value. Companies have, or can acquire, different types of technological assets and these assets 1111 need to be managed in different contexts (Zehner, 2000). Technology thus can be seen as a corporate resource that creates specific managerial issues.

Our introduction on managing technology and innovation aims to improve the quality of technology management by presenting an introductory overview of the interdisciplinary field of management of technology. The rest of the book consists of four parts and will focus on the internal organization of technology firms, managing technology in society, the management of innovation and dilemmas technology managers, entrepreneurs and analysts have to deal with. The book is written for both students new to the field of management of technology and practitioners who would like to broaden their technological knowledge with insights from the management of complex organizations.

THE MANAGEMENT OF TECHNOLOGY FIELD

The understanding of technology as a corporate resource and the need for managerial competences in the area of technology led to the emergence of management of technology as a new discipline. Nambisan and Willemon (2003) trace its origins back to the early 1970s and Chanaron and Jolly (1999) to the mid-1980s. Nambisan and Willemon refer explicitly to management of technology education programs. In the 1970s and 1980s business, engineering and science schools developed their first educational programs in management of technology in the periphery of their mainstream business management programs. Although no apparent explanations are mentioned in the literature, the emergence of management of technology programs can be dated back to the second half of the 1980s. This period shows also a boom in general literature on management of technology (see Box 1.1).

In his article on ranking centers of management of technology research, Linton (2004) uses a list of 10 top-ranked journals for the field to identify academic researchers active in management of technology. This list is made up of one practice-oriented and nine research-oriented journals and is presented in Box 1.2. The dates of origin of the journals range from 1954 to 1989 and half of them were founded in the 1980s. In this period, the titles of the journals show a focus on technology management and innovation management and management of technology as a research object seems to have blossomed since then.

Differences exist in conceptualization of the phenomenon of management of technology. These differences are largely due to the fact that the field is relatively young and fundamentally interdisciplinary. Linton (2004) describes management of technology as an immature field that lacks a widely accepted body of literature. He mentions the differences in the curricula of the education programs as another symptom of its immaturity. The different conceptualizations are conveyed in the different definitions in the literature (see Chanaron and Jolly, 1999 and Nambisan and Willemon, 2003 for an overview). Bayraktar (1990) defines management of technology as a rational and systematic view of responding to technological opportunities and innovations, and dealing with their consequences. Dankbaar (1993) defines management of technology as management activities associated with the procurement of technology, with research, development, adaptation and accommodation of technology in the enterprise, and the exploitation of technologies for the production of goods and services. The US National Research Council holds that management of technology forms the link between engineering, science and management disciplines and addresses the issues involved in planning, development and implementation of technological capabilities in order to shape and accomplish the strategic and operational objectives of an organization (National Research Council, 1987). According to Badawy (1998) management of technology evolves around integrating technology strategy with business strategy. Badawy presents management of technology as a field of study and practice. In this field technology is studied as a corporate resource that determines both the strategic and operational capabilities of the firm.

B0X 1.1 MANAGEMENT OF TECHNOLOGY BOOKS

Frederick Betz, 1987, Managing Technology

K.B. Clark, R.H. Hayes, C. Lorenz, 1985, The Uneasy Alliance, Managing the Productivity and Technology Dilemma

Donald D. Davis, 1986, Managing Technological Innovation

M. Dodgson, 1989, Technology Strategy and the Firm: Management and Public Policy

Richard N. Foster, 1986, Innovation, the Attacker’s Advantage

Watts S. Humphrey, 1987, Managing for Innovation, Leading Technical People

B.W. Mar, 1985, Managing High Technology

Donald Britton Miller, 1986, Managing Professionals in Research and Development

Philip A. Roussel, Kamal N. Saad, Tamara J. Erickson, 1991, Third Generation R&D Managing the Link to Corporate Strategy

Brian C. Twiss, 1988, Business for Engineers

Brian Twiss, Mark Goodbridge, 1989, Managing Technology for Competitive Advantage. Integrating technological and organisational development: from strategy to action

Brian Twiss, 1980, Managing Technological Innovation

BOX 1.2 MANAGEMENT OF TECHNOLOGY JOURNALS BY LINTON (2004)

IEEE Transactions on Engineering Management (1954)

Technology Forecasting and Social Change (1969)

R&D Management (1970)

Research Policy (1971)

Technovation (1981)

Journal of Engineering and Technology Management (1984)

Journal of Product Innovation Management (1984)

International Journal of Technology Management (1986)

Technological Analysis and Strategic Management (1989)

In the above-mentioned and often-cited definitions, management of technology is described as a systematic and rational way of responding, a management activity, an activity of linking different disciplines, and as a field of study and practice. The goals of the activities may vary and range from responding to technological opportunities and innovations to shaping and accomplishing the strategic and operational objectives of an organization to maximize customer satisfaction, corporate productivity, profitability and competitiveness (Badawy, 1998). The various definitions are at best complementary and at worst mutually exclusive. Instead of focusing on elements that exclude each other, the definitions can also serve to draw attention to the contours of the immature and still developing field that lacks a body of widely accepted literature. Certain elements recur in these definitions. These elements seem to be more or less beyond historical change or at least the rhythm of change is relatively slow. The elements fall into the categories object, perspective and practice (see Table 1.1).

All authors implicitly or explicitly take the understanding of technology as a corporate resource to be the key object of study and knowledge. This object includes issues of procurement of technology and accommodation of technology and technical knowledge within companies. In the management of technology field, technology determines the strategic and operational capabilities of companies (Badawy, 1998). This, of course, means that management of technology is only relevant in contexts where technology has such a determining force. Technology in some companies, industries or markets doesn’t have that impact.

The perspective is described as fundamentally interdisciplinary with roots in the sciences and engineering on the one hand and the social sciences, especially management and business sciences, on the other. The integration of these two scientific branches is central to the thinking of the authors. Badawy presents it as an integrating activity or process and Dankbaar and the National Research Council as a bundle of related integrating activities. The integrating activities can be localized on both the strategic level and the operational level. Management of technology takes the perspective of a company rather than an individual or the society as a whole.

Management of technology is practiced in different ways. In the description of the history of the field a distinction between education and research was made. Some focus on the professional practice in companies. Others focus on management of technology as a management activity for professionals and as a field of research. It can be concluded that the activities in the management of technology field are relevant to practitioners in companies, researchers and educators alike.

Table 1.1The management of technology field

TRENDS

The object, perspective and practice that constitute the management of technology field are more or less beyond historical change. Exclusively focusing on these elements creates a rather static picture of the field. Management of technology as an object of knowledge, however, is not static at all but constantly changing. This change has implications for professional practice, research and education. Questions arise, such as along which lines does change take place and which forces are responsible for the dynamics in the management of technology field? Looking back one can clearly see how the practice of technology management has changed over the last decades. Zehner (2000) identified three trends, technology explosion, the accelerating rate of technological diffusion and the globalization of technology, as agenda setting for technology management. And, indeed, changes in the technology management field seem to largely coincide with a number of trends, which are listed below:

• unbundling of value chains;
• liberalization of markets;
• alliances between organizations;
• globalization;
• decentralization of organizations;
• technology development becomes more complicated and more expensive;
• specialization of organizations;
• shortening of product life cycles;
• increased attention for societal responsibility;
• increased client orientation.

Below we will explain these major trends.

Unbundling, liberalization, alliances

Industries, especially those that show large network effects, used to be organized in large companies controlling the entire value chain. State-owned monopolies for utilities, for example, have apparent advantages such as economies of scale and controllability, yet these monopolies turn out to be untenable in a rapidly changing market. The large and bureaucratic organizations lack the agility that is required in such a market (see also Chapter 13). In addition, monopolies are thought to stifle innovation and increase price levels, so governments adopt liberalization policies and sell the rights of stateowned companies or force commercial monopolists to dissolve. Liberalization and unbundling are highly related and both stimulate the emergence of alliances between different companies. It may come as no surprise that the management of new technology in an unbundled industry requires cooperation between more stakeholders and therefore differs considerably from traditional patterns of technology management in monopolies.

Globalization, decentralization, specialization, alliances

The globalization is measurable in terms of a sharp increase in intercontinental travel and the transportation of goods as well as in the similarity of consumption patterns around the world. But still, local market situations can differ considerably. Multinationals have decentralized in order to be able to adapt swiftly to these local market situations. In addition to these multinationals, small specialized companies have entered the global marketplace. The efficient and cheap means of communication and transportation have enabled small and specialized companies to market their products all over the world. Globalization forces companies to focus on core competences. As a result, some of the competences required to innovate are no longer available in a single firm (Hamel and Prahalad, 1994). The alliances that are needed to innovate require increased coordination and introduce new risks. Alliances are often aimed at increasing development speed, and decreasing the cost and risk of development. But they also increase the pressure on R&D management (Tidd et al., 2001).

Technology development becomes more complicated and more expensive/specialization

Technologies that are required to develop new products have evolved (Tidd et al., 2001). Therefore, the technological competences involved in developing new products have become too complex to be mastered by a single company. Many products, such as mobile telephones, cars and consumer electronics, for example, gradually incorporate more complex and different technologies once the number of features increases.

Shortening of product life cycles

The length of product life cycles generally decreases. As a result, the period in which investments can be earned back decreases and the risk of this investment increases accordingly. To compensate for this, innovation processes should become more costeffective and the return of these processes (in terms of the percentage of innovations that is successful in the market) should increase. Shorter product life cycles also mean that time-to-market becomes more important. Innovation processes should be completed more quickly. So, shorter product life cycles have, in multiple ways, increased the pressure o...

Table of contents

• COVER PAGE
• TITLE PAGE
• COPYRIGHT PAGE
• FIGURES
• TABLES
• BOXES
• ABOUT THE AUTHORS
• PREFACE
• PART I GENERAL INTRODUCTION
• PART II THE INTERNAL ORGANIZATION OF HIGH-TECHNOLOGY FIRMS
• PART III THE MANAGEMENT OF TECHNOLOGY IN THE SOCIETY
• PART IV MANAGING INNOVATION
• PART V DILEMMAS AND STRATEGIES