Role of Technological Innovations
Prof. DEVANATH TIRUPATI – IIM A
Technological capabilities and related innovations
have the potential to enhance the competitiveness
of firms, significantly.
Collaborative development – both within the
firm and beyond is becoming an important driver
of technological capabilities.
Products and production technologies are
becoming more complex, requiring diverse
capabilities that are beyond a typical firm.
Developments in computers, communication and
information technologies have made it easier to
integrate and thereby collaborate.
Technology and Innovation Management are
Multi faceted with several perspectives.
ECNOMISTS view it as the black box for
conversion of inputs to outputs and employ
production function to characterize the
transformation - with labour and capital forming
the key input resources.
ENGINEERS see the details and the physical laws
that govern the transformation.
OPERATIONS MANAGEMENT RESEARCHERS
have the business perspectives and consider both
soft and hard aspects of Technology Management.
Products – the knowledge of how things work,
their design and their interface with other
Processes – the knowledge of the laws of the
transformation processes and the relationship
between different components of the process.
Practices – the management of the product process
combine and include related managerial systems
Defining sources of competitiveness
Integrating technology with the overall
strategic objectives of the firm.
Technology flows, i.e., transfers, imitation,
Commercialization of technologies.
Innovation and improvement processes
Capability building processes.
Evolution of technological change.
The innovations leading to new and/or
improved products can be classified as
‘product’ based innovations.
Process based innovations lead to improved
Innovations in ‘practices’ may impact product
and/ or process elements of the technology.
BASED ON THE ADAPTION INVOLVED,
INNOVATION IS CLASSIFIED INTO TWO.
Adaptations for New Markets/ Regions
Adaptations for Other Sectors/ Industries
- Innovations with major changes that result in
order of magnitude impact.
- Innovations that require only small changes and
are likely to result in modest improvements
rather than a big bang.
Product innovations can
take many forms with breakthrough innovations
expanding existing markets, opening up new
markets, and customer segments and providing
first mover advantage.
Process Innovations:- the benefits:- reduction in
process time, set up time, wastage and
improvements in quality.
Practice Innovations:Even though it may not
always be visible, it has got the potential to
enhance firm level capabilities either in products or
processes or both.
The support to small enterprises from an
appropriately designed innovation system greatly
alleviates the failures and improves the survival
and success rate.
The two mechanisms that have been effective in a
wide range of environments.
1. Technology incubators: Most technology incubators
focus on one or a small set of technologies.
Typically they have a pool of resources comprising
in-house expertise and facilities related to the
technologies of interest and are designed to
provide the requisite support.
2) Clusters of producer networks: This is a
collaborative model in which a large number of
producers with focused technological
capabilities and operating in close proximity
are able to develop synergies and compete
together successfully in the larger marketplace.
Focus of the firm: As mentioned earlier, small
firms are forced to develop specialized
capabilities in a narrow area.
Complementary capabilities among producers
located close to each other provide the cluster
members an opportunity to interact and
cooperate and thereby successfully compete
together. This interaction can occur in many
forms—sharing of orders, forming a sales
network, have outsourcing arrangements, etc.
Market maker/coordinator: Access to markets
is critical for success of clusters. With no single
producer having the requisite market
knowledge and/or technical capabilities, there
is a need for a coordinator to bridge the gap
between the markets and the cluster of
Regulatory support: Specific areas of
government help could include: incorporation
and closure processes, access to market and
market information, market for credit, etc.
Capability building support: In the absence of
scale economies, small firms need to maintain
their technical edge to remain competitive. This
requires continuous training and innovation
efforts in the focus areas of expertise.