Technological Innovation In A Global Industry Commerce Essay

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Prominent driver of globalization and competitive advantage of any industry is technology. Present generation is enjoying their life with more comfort is purely because of the advanced technological growth it has achieved in the last century. This achievement is the result of research carried in every step and at every level in all fields known to human beings. Technological innovation grows itself and also allows the society to progress along with it. Technological innovation became inseparable aspect in this competitive global market.

Looking for better comfort is the key issue in research which asks for better products for ever and this the motivating factor for the innovation in general and in particular it allows the best innovating companies to reach high levels and get huge profits. Depending upon the domain of industry the companies should do research and development (R&D) to keep it self ahead in the competition. Lot of investment is also need for R&D and it gives results in long run.

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There were several industries in particular, which are totally dependent on the innovations and updating of their products like electronic industry, mechanical industry, pharmaceutical industry etc. Pharmaceutical industry is a global industry with huge competition and also need lot of investment. In this industry technological innovation should be carried as a part of their regular business and R&D is inevitable.

Process of Innovation:

Innovation is the process of exploiting new ideas or and developing new products. It is just not only creation of new ideas, but it is about "bringing ideas to life" (Shukla, A. 2009)

Joseph Schumpter (1930) describes five different types of innovations.

Process innovation new to an industry.

Development of new sources of supply for raw materials or other inputs.

Changes in industrial organization

Introduction of a new product or a qualitative change in an existing product

The opening of a new market (Rogers, 1998).

Innovation = Problem Recognition + Solution Exploitation

Innovation is connected to development of an organization or industry with growth in productivity, quality, efficiency, market share and competitive positioning. There are many ways to achieve innovation within the business. For example formal research development is used for "break through innovations".

"A wide range of everyday management structures, systems and practices have a significant impact on innovation performance" said James A. Christiansen. For any industry innovation is lifeblood (Christiansen, 2000). "Successful innovation requires choosing, building and preparing the right organization and the right people for executing and scaling the innovation" says Clayton M. Cristensen & Tara Donavan (Authorstream, 2009).

Technology and Innovation Management:

There are four essential factors included in innovation: 1) Something New: Every one wants some new and latest. 2) Better than what exists: The word improved is also more effective in any industry. The "new and improved" is attracted every one. 3) Economically Viable: The consumers also look at the money savings along with the improvements. 4) Widespread Appeal: Including the above three there is an important thing for innovation that is need. The needs of customers are the basic appeal to new innovation. Because of these four factors innovation is more important to any industry (Reavis, 2009).

Through so many researches the experts declared that the innovation is necessary for every field and industry such as IT, Agriculture and others including Pharmaceutical industry also. Management expert Peter Drucker said that if an established organization, which in this age necessitating innovation, is not able to innovate, it faces decline and extinction (Shukla, 2009).

Expected Returns from innovation: Growing importance of generics, Price regulation and parallel trade, Data protection and market exclusivity period, Therapeutic reference pricing, Location of R& D and Cost effectiveness measures.

Pharmaceutical industry Innovation:

Globally the Pharmaceutical industry is an escalating industry with huge percentage of GDP and employment. In this industry many latest technological developments are introduced, with this establishment of new technologies it is growing rapidly and the budgets for health care are also increased. Here four major issues are described in pharmaceutical industry innovations: (i) The industry structure of pharmaceutical innovation (ii) public evaluation of the benefits and costs of innovation (iii) Incentives for correcting market failures allocating resources for research and development (iv)Competition and marketing (Sloan and Hsieh, 2007).

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Only for new developments, the investments in pharmaceutical industry increased highly in earlier decade. New administration techniques in drug growth pipeline, new forms of teamwork and internationalization and the latest technologies as enablers for cutting edge R&D are the three sources for open innovation in pharmaceutical industry. "One way we try to foster innovation - both the technological innovation and the organizational innovation - is to align our business objectives with our ideals." Said by Dr. Daniel Vasella, who is the CEO of Novartis International (Gassmann, Reepmeyer and Zedtwitz, 2008). Through the innovation of pharmaceutical industry for every year several new medicines are initiated in market. The persons can choose these new drugs if they have insurance assesses (Sloan and Hsieh, 2007).

There is an excellent indication on universal pharmaceutical innovation. To know the trends of pharmaceutical innovation over the last five years in world wide we can take the three major pharmaceutical market places those are EU, US and Japan as an illustration. In only the three countries the sales of new medicines are 90% throughout the period of 1997-2001 and in the period 1998-2002, 98% of new biological or chemical units are introduced.

Pharmaceutical industry faced many challenges to continual advancement of control and removes the diseases including Refining drug discovery, achieving regulatory approval and identifying targets of new drugs processes (River, 2004).

Changing Patterns of Pharmaceutical Innovation:

In discovery of new medicines the both public and privates sectors are involved including R&D and manufacturing the medications and drugs also. In olden days, the medications were equipped by only physicians, but next the pharmacists also doing this. The scientists know about purifying and isolating techniques of medical compounds and also a large amount of manufacturing procedures are improved in 19th century. As well as through the comprehension of chemistry and biology subjects in 20th century they discovered and developed the medicines to reduce the pervasiveness and harmfulness of some diseases like poliomyelitis, syphilis, typhoid fever and others. Now a days the innovation of pharmaceuticals depend upon the scientists and their highly group efforts at universities and private organizations. In the progress of medical field the pharmaceutical industry is more helpful with its producing and discovering of new drugs and medicals in laboratories which are industrialized. Through the combinatorial chemistry and recombination of DNA technology including other techniques many medicines such as quinine for malaria, morphine for pain relief are introduced (Britannica, 2010).

Research and Development (R&D) and Manufacturing are the two components in pharmaceutical industry. These two are affianced with some largest firms and some firms are engaged with either one of these functions. The pharmaceutical industry invests in R&D at a high range and gets high rates of innovation as returns of these investments. R&D works to know the interest of patients at the prices and its continuity for long time and it also covers the menaces and expenses of these investments.

To persuade the manufactures for developing the medicines for rare diseases US Congress endorsed The Orphan Drug Act in 1984. So many drugs were manufactured and developed through this act (Barral,1996).

For new drug applications evaluation and research and to know the innovations in pharmaceutical industry the centre of FDA classifies the new drugs in total five types: 1) New Molecular Entity (NME) 2) Incrementally Modified Drug 3) Other Drug 4) Priority Drug 5) Standard Drug.

The Incrementally Modified Drugs (IMDs) growth is faster by comparing the drugs which are based on New Molecular Entities (NMEs). By observing the increment of IMDs approved by FDA between the periods 1989-1994 and 1995-2000 the increment is 81% from 168 to 304 drugs. But in the same periods the NMEs increased by only 10% from 73 to 80 drugs.

A study conducted to know the changing patterns of Pharmaceutical Innovation reports that Food and Drug Administration (FDA) approved two-third of new medicines were similar to existing or just modified between the years 1989 and 2000. Therefore just one-third was approved as new treatments for diseases. During that period 361 drugs were approved as new molecular units based on containing of new chemical components and actions and new ways of treatments among total approved 1,035 medicines. And next FDA divides the medicines in two types: Priority and Standard. According to an analysis of NIHCM the 361 drugs which are approved by FDA, noted that 153 drugs were goes to Priority category and the other 208 were under Standard. The remaining 674 out of 1,035 drugs were classified as 583 were standard and 91 drugs as Priority drugs. On the whole 244 drugs (25%) out of 1,035 drugs approved by FDA as priority drugs and which were appreciably efficiency improved and/or safety. But Totally 15% of highly innovative Priority NMEs were approved by FDA in the period 1989-2000. The below graph shown the innovations of Pharmaceutical industrty during the period 1989-2000.

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Fig1: Distribution of New Drugs Approvals (NDAs) (Nihcm Foundation, 2002)

NIHCM president Nancy Chockley tells that "Highly innovative drugs are rare". It means most of new drugs are vaguely modified or just altered of existing. Of course, the new drugs are may or may not be much enhanced than existed drugs (Euractiv, 2010).

Technological Innovation in Pharmacy Industry:

Technological innovation has become more and more critical for firms as they struggle to attain and continue competitive advantage. Trends such as greater competition, technology fusion, globalization, product commoditization and fast product cycle times have only added to this importance.

The foundation of competitive gain in the pharmaceutical industry lies in successful innovation. Pharmaceutical industry spends more on research and development compared to other high-tech industry, including electrons, computers and aerospace (Cardinal, 2001).

The RFID technology is the new Rx for pharmaceutical industry. No other industry gets benefits from this technology as more as pharmaceutical industry. By reforming of supply chain the RFID technology increased the competitive advantages in pharmaceutical industry. Though the pharmaceutical industry face many challenges the RFID more help in two aspects: 1) Concerns about the legitimacy of medicines and 2) clinical trials, they should conduct before introducing a new drug to the market. Because of in market, the trade and development of a product depends upon the nature of that product. The RFID technology makes the data collection easy in clinical trials. RFID technology is also helping to reduce counterfeit drugs (Harper, 2010).

In pharmaceutical industry the changes of technology is a de-maturity process. To make better the human life and health care, the Genomic technology developed in identifying the molecular diseases. In pharmacy industry by using of the advanced technologies some activities are done. For example, pre-packaging of medicines and using of computers in pharmacies are important (Wonglimpiyarat, 2008).

Present day advancement in science and technology is putting pressure on industry to adopt it in its fast pace. Because of these advancements industry is spending its own for the research and development to carry innovations in their organizations. The advancement of and new technology in pharmaceutical industry in recent year has changed the phase of industry by creating new opportunities in business and revolution in launch of new products (Verbigena, 2010).

Healthy competition in Pharmaceutical industry:

The use of enhanced technologies make us better than well. The enhanced technology in pharmaceutical industry used to regulate our emotions and help the people to changing their life styles. According to James Canton, human enhancement is already in the commercial sector. The enhanced technology in pharmacy's reshaping the industry strategies of many biotechnology and pharmaceutical companies (Finkelstein, 1997).

Using the advanced technology; pharmacy industry's decrease costs, increase productivity, and expand new treatment modalities that will improve profitability. About these issues a seminar was conducted by the Cambridge of Massachusetts on December 4-5, 1997 on "The Future of the Pharmaceutical Industry" and their competitive position in world industry. The key segments are how enhanced technologies are being used to expand new chemistries for drugs, the possible impact of new technologies on decreasing the cost and time of the medical drug development process. The Future directions to pharmaceutical Industry are related to worldwide productivity, and competitiveness (Finkelstein, 1997).

How Pharmaceutical Companies Can Succeed in Emerging Markets:

To be successful, must have to know the dynamics in world industries and the wealth pyramids that exist. It is essential that run all aspects of business in a dependable manner, Implementation of new technology. To build a sustainable business the pharmaceutical industry drive through increased market volume, share, dedicate to work with governments, and deliver our medicines to as many as possible (Finkelstein, 1997).

Usage of technology by pharmacists:

Developing its work force and reducing inconvenience pharmacy industries are adopting new technology in prescriptions, manufacture, and marketing to go ahead with new business module and to overcome competition in the market from rivals and to keep their presence in the market for long. The Pharmacy industry moved from out dated automated prescription to IVR technology for prescription, better management and to reduce work burden on pharmacists.  By the introduction latest technological equipments has fastened in medical dispensing for pharmacists and allowed them to face more patients By taking advantage of internet many pharmacy chains are setting up their web sites to serve the customers from their home and to provide access of their store to check their medics and physicians, here software will show their medicines and name of physician to contact and they can order their refills from home (Heller, 1998).

Strategic problems of pharmaceutical Industry:

Strategic inconveniences and problems of pharmaceutical industry remodeled the modern pharmaceutical industry and some of them are technological innovation in science, Industrial consolidation, ever increasing competition, Decline in consumer participation and influence, changed consumer profile, ageing population and Changes in geo-political environment (Verbigena, 2010).

Lack of innovation poses danger to the industry itself:

The successful enhancement technologies have been tremendously influenced the public relations campaigns. These campaigns include professional societies, industry groups, and university centers. To day the industry is characterized by several regulations of government and policy changes. The world pharmaceutical industry is mounting up the value chain. Increased generic penetration, strong competition and industry disintegration has passively impacted the overall value growth of the household pharmaceutical market and other Industries like Non-allopathic medication, Naturopathy, Biotechnological products, fast moving health goods trying to overcome it. But using the advanced technology, pharmaceutical industries face these negative impacts and move freely and safely in world industry. Apart from the above relevant markets, price itself is a big constrain for this industry. There is a need to improve the products with low cost that are available to all sections of the society. So as far as pharmaceutical innovations are concerned, adapting of new technology is must or else it will be overtaken by the other relevant industries. They cannot block or disappear the latest innovations as they part and parcel of the competitive global market.

Conclusion:

Technological Innovation is most important to any industry. In pharmaceutical industry through the innovation new medicines and drugs were discovered for some rare diseases also. From 19th century this industry most developed in some isolating techniques, manufacturing processes. Through some chemical components modifications the new drugs were introduced to market every year. The investments for Research & Development were increases in pharmaceutical industry for innovation. RFID technology, IT technology and other technologies also used for packaging, clinical trials, bill payments and in some surgeries also the advanced technologies are introduced.

Every generation is expecting lot of change and looking for better comforts in short span of time. To satisfy the existing customers and to get the new customers companies are opting better management strategies. However, a single innovation a new product is potential enough to change the face value of the company in the global market. So, technological innovation alters the terms of competition in a global industry.