Technology Change In Innovation Policy Commerce Essay

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The term is synonymous with technological development, technological achievement, and technological progress. In essence Technological Change (TC) is the invention of a technology (or a process), the continuous process of improving a technology (in which it often becomes cheaper) and its diffusion throughout industry or society. In short, technological change is based on both better and more technology.

One of the first (conceptual) frameworks developed for understanding the relation of science and technology to the economy has been the linear model of Innovation. The model postulated that innovation starts with basic research, is followed by applied research and development, and ends with production and diffusion.(Benoit Godin). The Linear Model has been disapproved in recent times. Scientist's emphasized that Market Pull method is better than Linear Model of innovation method. Pull method develops the product with regards to the need of the consumers. In pull method over-emphasis are given on market driven improvements of existing product.

Thus, Technological Change that was illustrated with the 'Linear Model of Innovation' in earlier days has now been largely discarded to be replaced with a model of technological change that involves innovation at all stages of research, development, diffusion and use. When spoken about "Modelling Technological Change" often the process of Innovation is meant.

"Innovation is the specific instrument of entrepreneurship. It is an act that endows resources with a new capacity to create wealth."

- Peter Drucker.

Innovation accelerates and compounds. Each point in front of you is bigger than anything that ever happened.

-Marc Andreessen.

In definitional terms, an Innovation is simply a structured, measured set of activities designed to produce a specified output for a particular customer or market. Innovation is the one of the most important components of Entrepreneurship. It is very important for organizations to innovate to survive in the growing competition. It is a key factor to achieve success.

Drivers of Technology or Drivers of Innovation are the factors that persuade an organization to innovate. Those are the stimulus for an organization through which they carry the Innovation process.

Knowing why you're innovating is what defining drivers is all about, which is a necessary condition for success - these drivers are the motivation for the participants to get out of their comfort zone and to feel personally and collectively uncomfortable with the current state of affairs. Discomfort creates a rift in the current organizational "fabric" and opens a space for change. Organizations are driven to innovate out of crisis, out of success, or out of something in between.

Among the major drivers of Technological Change in this century, the growing population, rising economic and quality of life aspirations in the developing world and the resulting enormous energy, environmental and social pressures are sure to feature very heavily. This century will see technology developed and applied extensively by decentralized Innovation; there will be risks, but also great opportunities. We need to address those opportunities and risks by encouraging and facilitating an attitude of inclusiveness in science and technology-in education, industry and society generally.(Lockton)

Basically, there are many Drivers of Innovation. Each Organization or company may have a different reason or motive or impulse behind Innovation. I have discussed some of the major Drivers of Innovation in organizations.

Many organizations initiate Innovation out of crisis or in response to an external threat. For these organizations, identifying the Drivers for Innovation is straight forward. The usual crises are out-of-control costs, declining revenue, significant shift in customer sentiment, threat of a new entrant or game changer that has entered your industry or market, or loss of vital personnel. This knowledge is sufficient to set the context and to drive the organization out of complacency or fear. Urgency is important if you're in a crisis. Organizations that are very successful are likely to have some form of Innovation process already in place, but it may not be formalized. In any case, these organizations know that continued Innovation is critical to on-going success. Successful organizations are more likely to focus their Innovation efforts on revenue generation or business model Innovation than on operational effectiveness or business structure Innovation.

It may be more challenging for an organization that is generally successful is in the middle and looking for transformative growth or change. Driving disruptive change when no clear driver is apparent and nothing is really "broken" may be frustrating to many employees, and this is especially true of IT and operational managers. Their work is often centered on building and maintaining a reliable and well-performing environment. If their current performance is good, then they are not inclined to change.(Grobler)

The term Innovation encompasses the envisioning of new work strategies, the actual process design activity, and the implementation of the change in all its complex technological, human, and organizational dimensions. Firms that have developed such processes constitute a major competitive driver for the adoption of Innovation. Today, with competition extended to the execution of strategy, firms frequently woo customers on the basis of Innovation.

Thus, for some, the objective of the Innovation might be Competitive Advantage- in home mortgage financing, for example, timely approval of loans, to the extent that it reduces the period of uncertainty for home buyers and sellers. Innovation can also support low-cost producer strategies. Companies that eliminate, for example, costly aspects of their product delivery processes can pass the savings on to customers. The life insurance firm, USAA, has an objective of avoiding the costs of an agency relationship by relying on telephone-based marketing. USAA's telephone customers are consequently paying lower premiums than those offered by other insurers for the same coverage.

Competitive pressure is not the only driver of Innovation; increasingly, customers are the impetus for Technological Change. The automobile and retail industries offer two notable examples of customer-driven change. Auto manufacturers, responding to intense foreign competition in the 1980s, forced suppliers to increase the quality, speed, and timeliness of their manufacturing and delivery processes. In the retail industry, Wal-Mart has established practices of continuous replenishment, supplier shelf management, and simplified communications that have significantly influenced its suppliers, including such giants as General Electric and Procter & Gamble.

Finance is another powerful driver of Innovation. Companies that have assumed heavy debt loads as a result of leveraged buyouts or fending off corporate raiders often need to cut expenses substantially to improve profitability. Innovation can be more effective at removing unnecessary costs than many other alternatives such as business unit sales and early retirement programs. Of the many operational reasons that private-sector organizations embark on Innovation initiatives, almost all can be traced to the need for improving financial performance.

There are other occasions that provide opportunities for Innovation. For example, it may be desirable to redesign a process that is to be outsourced before turning it over to an outside firm. A merger can provide an opportunity for replacing redundant processes with a newly designed process that better accommodates the firm's new or redefined objectives. Even a poor ET infrastructure can be an opportunity for Innovation; many firms today need to rebuild major systems, but they should not construct them to support inadequate or inferior processes.

Innovation can also respond to the need for better coordination and management of functional interdependencies. Better coordination of manufacturing with marketing and sales, it is reasoned, will allow a company to make only what its customers will buy. Achieving a high degree of interdependence virtually demands both the adoption of a process view of the organization to facilitate the implementation of cross-functional solutions, and the willingness to search for Innovations. Existing approaches to meeting customer needs are so functionally based that Incremental Innovation will never yield the requisite interdependence.

A final rationale for Innovation is that it suits our business culture. Even if firms could solve their financial problems and satisfy their customers through Incremental changes, why should they suppress their appetite for Radical Innovation? Perhaps what companies need is an approach that marries Radical Innovation and the discipline of Incremental Innovation.

An innovation orientation to business involves elements of structure, focus, measurement, ownership, and customers. It implies a strong emphasis on how work is done within an organization, in contrast to a product focus's emphasis on what. An innovation is thus a specific ordering of work activities across time and place, with a beginning, an end, and clearly identified inputs and outputs: a structure for action. This structural element of processes is the key to achieving the benefits of innovation.(Davenport, 1993)

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