THE CHALLENGES OF GLOBALIZATION:
The globalization of the technological environment has brought complex changes for firms managing their intellectual property. According to one account, exports of intellectual property assets from the :United States have more than doubled during the past 10 years and now account for more than 25 percent of the total U.S exports.
Deterrence of international pirating activities is usually accomplished through unilateral, bilateral and multilateral means.
UNILATERAL STEPS:
It can be defined as an independent step by a country such as the: United States, to protect its citizens form the following piracy activities.
· the patent, copyright and trademark laws and
· Customs service regulations to block the importation of goods violating U.S. Intellectual property rights.
BILATERAL AGREEMENTS:
These are promises between two nations to conduct their policy affairs in certain ways.
MULTILATERAL METHODS:
This reaches beyond bilateral agreements in that many countries together agree to conform to a policy framework.
PATENT PROTECTION:
The patent policies throughout the world especially among the major developed countries, share a fair amount of commonality. Countries, however different policies regarding subject matter, length of protection, interpretation of claims, requirements for novelty, confidentiality of applications, and priority between different inventors .
COPYRIGHT:
International copyright policy is dominated by two multilateral arrangements. The Universal Copyright Convention and the Berne convention. The principle of both is the same. Foreigners from signatory countries must be granted national treatment under the copyright laws of any other member country.
TRADEMARKS:
This varies considerably among various countries. Unlike in the United States where priority is based on use in most countries trademark rights are granted to the first person to file for registration.
GRAY MARKETS:
The challenges of intellectual property protect, created by the globalization of the technology environment may be illustrated in the case of gray markets. A gray market is developed when a foreign manufactured good bearing a valid U.S. trademark is imported into the United States without the permission of the U.S. trademark code. There are some ways in which a gray market is created.
1. A domestic U.S. trademark holder authorizes an independent foreign manufacturer to use its trademark, and manufacturer agrees not to export to the United States. A gray market is created when the foreign manufactures exports to the United States or when a third party; purchaser exports to the United States
2. The domestic U.S. trademark owner establishes a foreign manufacturing Subsidiary or a division. A gray market is created when a third party Producer exports to the United States.
Wednesday, January 23, 2008
INTELLECTUAL PROPERTY PROTECTION
INTELLECTUAL PROPERTY PROTECTION:
Generally, a firm tries to protect its intellectual property in three ways:
INTELLECTUAL PROPERTY STRATEGY
PRODUCT- MARKET CONTINUAL LEGAL
ACTIONS INNOVATION STRATEGY
Standards Continual Improvement Patents
Barriers to Imitation Cannibalization Copyright
Collaborative Product Platform Trade Secret
Agreements Radical Innovation Trademarks
1. A firm may undertake actions in the product market to prevent competitors from eroding its competitive position through imitation. For example, it may invest in advertising; develop a system of licensing with exclusive arrangements with the licensees, or shut out the distribution channels to potential imitators.
2. It may focus on continuous innovation to thwart imitation and obsolescence. Continuous innovation enables a firm to keep one step ahead of the competition by introducing, for example, a series of new products.
3. The firm may seek legal protection through patents, copyrights, trade secrets, or trademarks. When a firm seeks recourse in the legal system, it relies on the intellectual property system of a country to defend or protect its intellectual property from competitors.
PRODUCT-MARKET ACTIONS:
Strategic action in the product markets may thwart imitation and obsolescence.
IMITATION: For competitors to imitate, four set of requirement to be met.
· Recognition
· Diagnosis
· Resources
· Costs and incentives
Actions undertaken by a firm that are visible in the marketplace include:
· Engaging in the battle for the standards
· Erecting entry barriers
· Limiting pricing
· Making collaborative arrangements
OBSOLESCENCE:
CONTINUAL INNOVATION:
· Incremental innovation
· Product cannibalization
· Product platform and product family
· Radical innovation
LEGAL STRATEGY:
· Patents
· Copyright
· Trade Secret
· Trade marks
Generally, a firm tries to protect its intellectual property in three ways:
INTELLECTUAL PROPERTY STRATEGY
PRODUCT- MARKET CONTINUAL LEGAL
ACTIONS INNOVATION STRATEGY
Standards Continual Improvement Patents
Barriers to Imitation Cannibalization Copyright
Collaborative Product Platform Trade Secret
Agreements Radical Innovation Trademarks
1. A firm may undertake actions in the product market to prevent competitors from eroding its competitive position through imitation. For example, it may invest in advertising; develop a system of licensing with exclusive arrangements with the licensees, or shut out the distribution channels to potential imitators.
2. It may focus on continuous innovation to thwart imitation and obsolescence. Continuous innovation enables a firm to keep one step ahead of the competition by introducing, for example, a series of new products.
3. The firm may seek legal protection through patents, copyrights, trade secrets, or trademarks. When a firm seeks recourse in the legal system, it relies on the intellectual property system of a country to defend or protect its intellectual property from competitors.
PRODUCT-MARKET ACTIONS:
Strategic action in the product markets may thwart imitation and obsolescence.
IMITATION: For competitors to imitate, four set of requirement to be met.
· Recognition
· Diagnosis
· Resources
· Costs and incentives
Actions undertaken by a firm that are visible in the marketplace include:
· Engaging in the battle for the standards
· Erecting entry barriers
· Limiting pricing
· Making collaborative arrangements
OBSOLESCENCE:
CONTINUAL INNOVATION:
· Incremental innovation
· Product cannibalization
· Product platform and product family
· Radical innovation
LEGAL STRATEGY:
· Patents
· Copyright
· Trade Secret
· Trade marks
INTELLECTUAL PROPERTY RIGHTS
INTELLECTUAL PROPERTY:
The knowledge assets of a firm span the entire technology development continuum from tacit knowledge to the knowledge that is physically embodied in products and processes. These knowledge assets are often termed intellectual capital. Intellectual property is legal concept that refers to the components of the intellectual capital that may be protected under the law.
Just like physical assets, intellectual capital enables firms to derive profits from its activities. For example, technical knowledge can be deployed in products to gain competitive advantage. Alternatively, knowledge of specific processes may enable a firm to reduce the cost of operations, thereby enhancing its profitability. Or, a firm may license its intellectual property to others and earn fees from the licensee. Finally, a firm can sell its technology and profitably recoup the funds that it invested in the development of that technology.
Because intellectual capital is the key to competitive advantage and profitability, in a free market economy, competitors will try to appropriate it for their own ends.
A firm may lose its intellectual property to these competitors in three ways:
1. IMITATION: It is a serious threat to any competitive advantage, be it based on intellectual capital or otherwise. Unless imitators face severe costs of imitation thru retaliation, or legal action, they; can benefit form the investments jade by the innovators, without incurring the costs of innovation.
2. OBSOLESCENCE: Competitors can themselves engage in innovation and produce a superior product or service that acts as a substitute to a firm’s products or services.
3. INFRINGEMENT OR THEFT: Competitors can infringe or worse, steal, firm’s knowledge assets.
The intellectual property strategy of firms thus refers to the approach that it takes to seal its intellectual assets from the forces of imitation, obsolescence, or infringement, and theft.
The knowledge assets of a firm span the entire technology development continuum from tacit knowledge to the knowledge that is physically embodied in products and processes. These knowledge assets are often termed intellectual capital. Intellectual property is legal concept that refers to the components of the intellectual capital that may be protected under the law.
Just like physical assets, intellectual capital enables firms to derive profits from its activities. For example, technical knowledge can be deployed in products to gain competitive advantage. Alternatively, knowledge of specific processes may enable a firm to reduce the cost of operations, thereby enhancing its profitability. Or, a firm may license its intellectual property to others and earn fees from the licensee. Finally, a firm can sell its technology and profitably recoup the funds that it invested in the development of that technology.
Because intellectual capital is the key to competitive advantage and profitability, in a free market economy, competitors will try to appropriate it for their own ends.
A firm may lose its intellectual property to these competitors in three ways:
1. IMITATION: It is a serious threat to any competitive advantage, be it based on intellectual capital or otherwise. Unless imitators face severe costs of imitation thru retaliation, or legal action, they; can benefit form the investments jade by the innovators, without incurring the costs of innovation.
2. OBSOLESCENCE: Competitors can themselves engage in innovation and produce a superior product or service that acts as a substitute to a firm’s products or services.
3. INFRINGEMENT OR THEFT: Competitors can infringe or worse, steal, firm’s knowledge assets.
The intellectual property strategy of firms thus refers to the approach that it takes to seal its intellectual assets from the forces of imitation, obsolescence, or infringement, and theft.
TECHNOLOGY INFORMATION
TECHNOLOGY INFORMATION:
It means information of technology. It is referred to us a communication of facts, findings, results, ideas and thoughts.
The technology essentially means “Know how” that’s, ways of designing, manufacturing or utilizing things. It can also be defined as the Know how to transform concepts in to goods and services for the satisfaction of customers technology is imbibed in various forms., the most common of this could be identified in machines used for manufacture or the skills that are transformed through human beings.
The importance of technological information as a key element in the development process in country has been well acknowledged in the process of establishment of a new undertaking or during its operation, information is not the first requirements and the success of subsequent operations largely depends on the quality of information on which the initial decisions where based. Whether the issues related to investment, technology acquisitions, manpower development, research and development, the information is important.
CONTENTS OF TECHNOLOGY INFORMATION:
It covers both hardware and software aspects.
PRE-FEASIBILITY STAGE:
--Alternative products with their technology content.
--The stage at which the products are in their technology life cycle.
--Sources of availability of technology.
--Plant and equipment required.
--Optimum size of plant.
--Raw materials, utilities and man power requirement.
--Status of process and design development.
--Status of industrial property rights.
--Appropriateness of technology under local conditions.
--Possibilities of sources of funding for technology.
FEASIBILITY STAGE;
The above set of information but in greater detail and with greater depth and scope is required. Fro instance, regarding sources of technology one would seek information on the various sources of supply of technology, their relative merits and demerits and cost of technology. This information is indeed is very desirable so as to be in a better bargaining portion while acquiring technology.
IMPLEMENTATION STAGE:
• Information on plan installation and operations.
• Training particularly in any specialized skills that may be required.
• Machinery maintenance schedules.
• Technology absorption and adaptation plants.
PLANT OPERATION STAGE:
• Product quality and quality control measures.
• Efficiency of operations.
• Product applications, potential fields of new applications.
• Technology absorption and adaptation.
SOURCES OF TECHNOLOGY INFORMATION:
• Published literature
• Exhibitions and Conferences
• Industrial and Trade Associations
• Government organizations and departments
• Patents
• Experts and Consultants
• Databanks/bases
PATENT BASED TECHNOLOGIES:
This is a rich source of information. A look into this can uncover inventions including those not protected by the national patent law. It identifies which countries and companies are dominant in particular technologies. It gives an update on the state-of-the-art of patent based technologies that could guide firms and entrepreneurs as to where their business concerns could lead as well as encourage innovators to stimulate their creativeness or to rekindle old ideas.
The information on patents in India could be obtained from the patent offices located at Calcutta, Delhi, Bombay, Chennai, and the centralized information centre at Nagpur.
The patents gives the local information centres for ensuring resources sharing activities like inter-library loans, referral services and document supply services. A software research centre called National Resource Software centre (NRSC) has been established at Vishakhapatnam. The centre will acquire information handling software packages from international and national organizations, among its other activities. NISSAT is for on-line search facilities on a permanent basis in the country and five regional access centres have been established.
TIFAC – Technology Information, Forecasting and Assessment Council
a) Creation of an information system including data base/data bank
b) conducting action oriented studies and forecasting in selected priority areas
c) Action towards publications and creation of Public Information System Base.
d) Management development
e) Development of linkages with private sector, small industries and educational sector.
NATIONAL INFORMATION SYSTEM FOR SCIENCE & TECHNOLOGY (NISSAT)
OBJECTIVES:
i) Provision of national information services to meet the present and future needs
ii) Optimum utilization of existing information services and systems.
iii) Promotion of national international cooperation and liaison for exchange of information.
iv) Support and participate in research, development and innovation in information science and communications,
It means information of technology. It is referred to us a communication of facts, findings, results, ideas and thoughts.
The technology essentially means “Know how” that’s, ways of designing, manufacturing or utilizing things. It can also be defined as the Know how to transform concepts in to goods and services for the satisfaction of customers technology is imbibed in various forms., the most common of this could be identified in machines used for manufacture or the skills that are transformed through human beings.
The importance of technological information as a key element in the development process in country has been well acknowledged in the process of establishment of a new undertaking or during its operation, information is not the first requirements and the success of subsequent operations largely depends on the quality of information on which the initial decisions where based. Whether the issues related to investment, technology acquisitions, manpower development, research and development, the information is important.
CONTENTS OF TECHNOLOGY INFORMATION:
It covers both hardware and software aspects.
PRE-FEASIBILITY STAGE:
--Alternative products with their technology content.
--The stage at which the products are in their technology life cycle.
--Sources of availability of technology.
--Plant and equipment required.
--Optimum size of plant.
--Raw materials, utilities and man power requirement.
--Status of process and design development.
--Status of industrial property rights.
--Appropriateness of technology under local conditions.
--Possibilities of sources of funding for technology.
FEASIBILITY STAGE;
The above set of information but in greater detail and with greater depth and scope is required. Fro instance, regarding sources of technology one would seek information on the various sources of supply of technology, their relative merits and demerits and cost of technology. This information is indeed is very desirable so as to be in a better bargaining portion while acquiring technology.
IMPLEMENTATION STAGE:
• Information on plan installation and operations.
• Training particularly in any specialized skills that may be required.
• Machinery maintenance schedules.
• Technology absorption and adaptation plants.
PLANT OPERATION STAGE:
• Product quality and quality control measures.
• Efficiency of operations.
• Product applications, potential fields of new applications.
• Technology absorption and adaptation.
SOURCES OF TECHNOLOGY INFORMATION:
• Published literature
• Exhibitions and Conferences
• Industrial and Trade Associations
• Government organizations and departments
• Patents
• Experts and Consultants
• Databanks/bases
PATENT BASED TECHNOLOGIES:
This is a rich source of information. A look into this can uncover inventions including those not protected by the national patent law. It identifies which countries and companies are dominant in particular technologies. It gives an update on the state-of-the-art of patent based technologies that could guide firms and entrepreneurs as to where their business concerns could lead as well as encourage innovators to stimulate their creativeness or to rekindle old ideas.
The information on patents in India could be obtained from the patent offices located at Calcutta, Delhi, Bombay, Chennai, and the centralized information centre at Nagpur.
The patents gives the local information centres for ensuring resources sharing activities like inter-library loans, referral services and document supply services. A software research centre called National Resource Software centre (NRSC) has been established at Vishakhapatnam. The centre will acquire information handling software packages from international and national organizations, among its other activities. NISSAT is for on-line search facilities on a permanent basis in the country and five regional access centres have been established.
TIFAC – Technology Information, Forecasting and Assessment Council
a) Creation of an information system including data base/data bank
b) conducting action oriented studies and forecasting in selected priority areas
c) Action towards publications and creation of Public Information System Base.
d) Management development
e) Development of linkages with private sector, small industries and educational sector.
NATIONAL INFORMATION SYSTEM FOR SCIENCE & TECHNOLOGY (NISSAT)
OBJECTIVES:
i) Provision of national information services to meet the present and future needs
ii) Optimum utilization of existing information services and systems.
iii) Promotion of national international cooperation and liaison for exchange of information.
iv) Support and participate in research, development and innovation in information science and communications,
TECHNOLOGY SUPPORT SYSTEMS
TECHNOLOGY SUPPORT SYSTEMS:
Technology support systems in India includes following instititutions:
· IFCI- Industrial finance Corporation of India
· ICICI – Industrial Credit & Investment Corporation of India.
· IDBI – Industrial Development Bank of India.
· RCTC- (promoted by ICICI) Risk Capital &Technology Finance corporation Ltd.
· SIDBI- Small Industries Development Bank of India.
· NRDC- National Research Development Corporations of India.
· BCIL- Biotech consortium India Ltd.
· TDICI- Technology Development and Investment Corporations of India.
· SFC- State Finance Corporation.
· SIDCO- State Industries Development Corporation.
Institution providing technology finance:
There are two types of financial considerations while extending financial support by these institutions.
1) Funds for setting up new units/industrial diversification.
2) Funds for R&D activities and R&D infrastructure.
There are number of venture capital fund companies in the public and private sector, they also have state finance corporation.
VENTURE CAPITAL:
In the budget for 1986-87 govt of India decided to impose 5% levy on all technology import payments to create funds to be operated by IDBI, known as the venture capital fund of IDBI. Since then, a number of specialized financial institutions have been promoted by the major all India financial institutions.
EX. RCTC promoted by IFCI
VECAUS III promoted by IFCI and UTI
TDICI promoted by ICICI and UTI
In addition the following organizations also entered the field one is ‘SBI capital market’ (venture capital fund of SBI’s merchant banking decision)
India investment fund (GRINDLAYS Bank)
Can bank financial services
Credit Capital Financial Corporation
India Venture Capital Fund
RCTC:
It is a public limited company incorporated in Jan 1988, it provides:
a) Risk capital to first generation entrepreneurs to setup industrial units in medium and medium large sectors (project cost 2-10 crore )
b) Finance for technology development particular for advancement of R&D, it provides funds by
1. Equity participations
2. Loans
n Conventional (low interest rate)
n Conditional (interest free loans but profit sharing when a company earns profits)
Venture capital fund of IDBI:
It is designed to promote adoption of domestic technology to encourage adapt ion of imported technology for:
1) Setting up of pilot or demonstration plans.
2) Development of product/process for import substitution or up gradation.
3) Reducing material consumption, savings in energy etc.
4) Assistance in the form of conventional loans (5-25 lakhs)
Venture Capital scheme of TDICI:
It extends financial assistance to projects involving commercialization of new technology, indigenous technology or imported innovative technology transferred from an external source. Assistance available for initial aggregate investment up to 2 crore. Assistance may be in equity investment, condition and conventional loan.
PACT (Programme for advancement of commercial technology)
It envisages technical developments not technical transfer through INDO-US joint ventures in R&D.
To eligible for PACT support, a project should
a) Involve the development through R&D efforts, of an innovative product or process which promises tangible benefits to the Indian economy.
b) Be proposed by an Indian company and US company as a team, with each member having a specified role in the development and commercialization programme.
c) Have potential for commercialization in three years.
d) involve technology development and not just technology transfer and
e) Not be related to defense. Weather modification or abortion-related equipment or services.
RISK FINANCE BY NATIONAL RESEARCH DEVELOPMENT CORPORATION (NRDC)
NRDC, New Delhi, a Government of India enterprise in the Department of Scientific and Industrial Research (DSIR) is charged with the objective of commercial sing research carried out in national laboratories. It provides risk finance for technology development both by way of equity participation in companies set up for the first commercialization of NRDC know-how and also provides development loans for setting up of pilot plants.
Technology support systems in India includes following instititutions:
· IFCI- Industrial finance Corporation of India
· ICICI – Industrial Credit & Investment Corporation of India.
· IDBI – Industrial Development Bank of India.
· RCTC- (promoted by ICICI) Risk Capital &Technology Finance corporation Ltd.
· SIDBI- Small Industries Development Bank of India.
· NRDC- National Research Development Corporations of India.
· BCIL- Biotech consortium India Ltd.
· TDICI- Technology Development and Investment Corporations of India.
· SFC- State Finance Corporation.
· SIDCO- State Industries Development Corporation.
Institution providing technology finance:
There are two types of financial considerations while extending financial support by these institutions.
1) Funds for setting up new units/industrial diversification.
2) Funds for R&D activities and R&D infrastructure.
There are number of venture capital fund companies in the public and private sector, they also have state finance corporation.
VENTURE CAPITAL:
In the budget for 1986-87 govt of India decided to impose 5% levy on all technology import payments to create funds to be operated by IDBI, known as the venture capital fund of IDBI. Since then, a number of specialized financial institutions have been promoted by the major all India financial institutions.
EX. RCTC promoted by IFCI
VECAUS III promoted by IFCI and UTI
TDICI promoted by ICICI and UTI
In addition the following organizations also entered the field one is ‘SBI capital market’ (venture capital fund of SBI’s merchant banking decision)
India investment fund (GRINDLAYS Bank)
Can bank financial services
Credit Capital Financial Corporation
India Venture Capital Fund
RCTC:
It is a public limited company incorporated in Jan 1988, it provides:
a) Risk capital to first generation entrepreneurs to setup industrial units in medium and medium large sectors (project cost 2-10 crore )
b) Finance for technology development particular for advancement of R&D, it provides funds by
1. Equity participations
2. Loans
n Conventional (low interest rate)
n Conditional (interest free loans but profit sharing when a company earns profits)
Venture capital fund of IDBI:
It is designed to promote adoption of domestic technology to encourage adapt ion of imported technology for:
1) Setting up of pilot or demonstration plans.
2) Development of product/process for import substitution or up gradation.
3) Reducing material consumption, savings in energy etc.
4) Assistance in the form of conventional loans (5-25 lakhs)
Venture Capital scheme of TDICI:
It extends financial assistance to projects involving commercialization of new technology, indigenous technology or imported innovative technology transferred from an external source. Assistance available for initial aggregate investment up to 2 crore. Assistance may be in equity investment, condition and conventional loan.
PACT (Programme for advancement of commercial technology)
It envisages technical developments not technical transfer through INDO-US joint ventures in R&D.
To eligible for PACT support, a project should
a) Involve the development through R&D efforts, of an innovative product or process which promises tangible benefits to the Indian economy.
b) Be proposed by an Indian company and US company as a team, with each member having a specified role in the development and commercialization programme.
c) Have potential for commercialization in three years.
d) involve technology development and not just technology transfer and
e) Not be related to defense. Weather modification or abortion-related equipment or services.
RISK FINANCE BY NATIONAL RESEARCH DEVELOPMENT CORPORATION (NRDC)
NRDC, New Delhi, a Government of India enterprise in the Department of Scientific and Industrial Research (DSIR) is charged with the objective of commercial sing research carried out in national laboratories. It provides risk finance for technology development both by way of equity participation in companies set up for the first commercialization of NRDC know-how and also provides development loans for setting up of pilot plants.
TECHNOLOGY DIFFUSION
TECHNOLOGY DIFFUSION:
The term diffusion refers to the spread of a new idea (product, technology, service or method) from the time of its invention or creation to its ultimate adoption by an increasing number of users in different circumstances.
Diffusion involves special types of communication method or system to help diffuse changes in practice, as well as change in knowledge or attitudes.
The diffusion process is complete when:
· A sufficient number of customers are using the innovation to pay back the amount used to develop it.
· it starts to make a profit
· A system is in place for assessing the need for changes to ensure the longevity of the technology.
Many organizations, such as Indian Space Research Organization (ISRO), Atomic energy(AE), Defense Research and Development Organization(DRDO), Council of Scientific and Industrial Research (CSIR) have set up their own mechanisms to diffuse their innovations and technologies.
IMPORTANCE OF DIFFUSION:
· Diffusion helps the organization to make most of its technical innovation.
· Companies can sell their technologies to different companies by understanding their needs.
· For example firm manufacturing telephone switching equipment for temperature climate and stable power supply should try to make equipment for tropical climate and unstable power supply.
· Technology that becomes obsolete in one market may still be useful in other markets.
· For example some technology India acquired from abroad in which hi-tech field is already out lived their life in their own countries.
PROCESS OF DIFFUSION:
Completed in five stages:
1) Individual action
2) applying basic research
3) industrialization
4) commercialization
5) full scale diffusion
INDIVIDUAL ACTION:
It involves 8 steps or phases to the innovation and diffusion process.
a) Creation of favorable conditions
b) Identification of unfulfilled needs (ex. modification required on existing technologies or creation of new technologies )
c) Definition of the problem
People marketing translate their perception to develop ment section. People in development section conveys to Research. The Research department translates their findings to development as marketing section. This way individual from each section and participates in innovation.
d) Preparation for problem solving:
Information collected on
*what customer really want?
· What other has done to solve it?
· What solutions have not been successful?
e) Incubation:
Conductive atmosphere is provided to promote creative thinking and stimulate ideas.
f) Inspiration: Superiors, coworkers encourage the creative work.
g) Externalization: Preparing the idea for others outside the organization also to develop and evaluate.
h) Influence: Influence Socio-Political leadership to gain acceptance for a generated solution.
2) APPLYING BASIC RESEARCH:
At this stage linking basic scientist work, applied scientist work and market to visualize market possibilities of new ideas.
3)INDUSTRAIALIZATION: At this stage, partial and profitable application of technology with the cooperation between Research personnel and marketing and engineering personnel for putting to industrial use for initial product process.
4) COMMERCIALIZATION:
Organizing trials and mechanisms for the transfer of technology and managing technological life cycle. The trials include
· Small scale pilot testing
· Launching innovation trials, prepare check manuals, for ease of understanding.
· Communication activities: Marketing people develops new promotional programme. Market is identified are targeted and enterprise develops capabilities to manage diffusion.
6) FULL SCALE DIFFUSION:
This is the last stage of comprehensive innovation/diffusion process. It includes a search for a wider range of potential markets, new industries new geographic regions, new market segments that have not been explored, and new ways to couple the innovation with other innovations. The way that electronics and computers have diffused throughout the industry and the world is prime example of full scale diffusion.
DEVELOPING A DIFFUSION STRATEGY:
TAKING THE TECHNOLOGY TO THE MARKET PLACE:
Developing a diffusion strategy involves a number of activities and many people.
1). Assess the Organizational Climate:
It includes the need to orient to the future, for timely action, to anticipate changes, threats, and opportunities, and for all members of the organization to play a role in launching an innovation.
Studies of successful diffusion show that presence of dedicated people who persist in their efforts. Such people are call ‘technology champions”
Or “change agents”
2) understand the role of “Technology Champion “:
He must play a bridge role within and outside the organization. Within the organization he should provide communications between the marketing and the R&D organization. In market driven organizations, the technological innovation come from the marketing. R&D reaction comes in the form of guidance on what is technically feasible and ideas from scientific circles.
When introducing a new technology to potential customers outside the organization he must explain the need for the technology. Demonstrations, films or other techniques can help the customer to become aware of new technology. He must show real interest in the user’s problems and prove it in his behavior. He should be sensitive to the user’s needs and help the user to overcome problems he encounters.
3) Define the Profile to the Technological Innovation:
Different types of technological innovation require different diffusion efforts. If the technology is new to both the market and the company, adopters of the technology have to be educated on its use. Diffusion efforts must stress the superior attributes of the new technology.
4) Use Opinion Leaders:
The identification of opinion leaders, assessment of their orientation (towards acceptance or rejection), assessment of their scope of influence, and development of ways to influence them is the important part of the diffusion strategy.
5) Develop a Communication Strategy:
Developing a communication strategy is to achieve successful communication the organizations must relate the innovation’s attributes to customer needs. The change agent must show, through its communications that it wants to be useful by meeting customer needs and is willing to learn from its customers.
Communications: Two areas of communication are within the organization (internal communication and with agencies outside the organization is external communication).
INTERNAL COMMUNICATION: The innovator must describe the innovation in terms that enable others to work on its behalf. Thus facilitating communications between R&D and marketing is a continuing management task. The message to internal corporate decision-makers should include realistic estimates of the initial resource requirements, staff, time, and money required to launch the innovation.
EXTERNAL COMMUCIATION: It is guided by the
a) attributes of the innovation and
b) The characteristics of the target market of the technological innovation.
a) ATTRIBUTES OF INNOVATION:
· relative advantage,
· compatibility
· complexity
· testability
· visibility
i) The relative advantage of a new idea helps determine its rate of adoption. Companies can reduce the perceived risk of trying an innovation by offering performance guarantee (like yield for a new process). Societal factors may also affect the customer’s perception of relative advantage. For example the oil crisis increase interest in energy saving technologies for automobiles, power generation etc.
ii) Compatibility is the degree to which potential adopters see an innovation as consistent with their values, experiences and needs. For example many organizations are diversifying into high technology computers and communication.
iii) Complexity is the degree to which an innovation is relatively difficult to understand and use. For example the user-friendly menu driven software have overcome user’s resistance to perceived complexity.
iv) Testability is the degree to which potential adopters can experiment with an innovation on a limited basis. For example, modular switching allows for testing the basic building blocks.
v) Visibility is the degree to which the results of a new technology are apparent to others. For example when digital technology was introduced in films they could perceive in significant difference in watching the film.
b) CHARACTERISTICS OF THE TARGET MARKET:
Communication channels: Two principal modes of communication for message about innovation are the mass media (radio, TV, film, mobiles, newspaper, magazines) and interpersonal channels (word of mouth, trade shows, demonstrations etc.)
The mass media are relatively quick in beaming the message to many people. But lack of feedback about customer reception will make the media less effective than interpersonal communication in molding attitudes to the new technology. This may be suitable for food preservation/processing with potential for large number of customers spread over a wide area.
Interpersonal communication can be a dialogue between the innovator and the potential customer, a strong relationship exists between understanding a technological innovation and begin influenced to buy.
The term diffusion refers to the spread of a new idea (product, technology, service or method) from the time of its invention or creation to its ultimate adoption by an increasing number of users in different circumstances.
Diffusion involves special types of communication method or system to help diffuse changes in practice, as well as change in knowledge or attitudes.
The diffusion process is complete when:
· A sufficient number of customers are using the innovation to pay back the amount used to develop it.
· it starts to make a profit
· A system is in place for assessing the need for changes to ensure the longevity of the technology.
Many organizations, such as Indian Space Research Organization (ISRO), Atomic energy(AE), Defense Research and Development Organization(DRDO), Council of Scientific and Industrial Research (CSIR) have set up their own mechanisms to diffuse their innovations and technologies.
IMPORTANCE OF DIFFUSION:
· Diffusion helps the organization to make most of its technical innovation.
· Companies can sell their technologies to different companies by understanding their needs.
· For example firm manufacturing telephone switching equipment for temperature climate and stable power supply should try to make equipment for tropical climate and unstable power supply.
· Technology that becomes obsolete in one market may still be useful in other markets.
· For example some technology India acquired from abroad in which hi-tech field is already out lived their life in their own countries.
PROCESS OF DIFFUSION:
Completed in five stages:
1) Individual action
2) applying basic research
3) industrialization
4) commercialization
5) full scale diffusion
INDIVIDUAL ACTION:
It involves 8 steps or phases to the innovation and diffusion process.
a) Creation of favorable conditions
b) Identification of unfulfilled needs (ex. modification required on existing technologies or creation of new technologies )
c) Definition of the problem
People marketing translate their perception to develop ment section. People in development section conveys to Research. The Research department translates their findings to development as marketing section. This way individual from each section and participates in innovation.
d) Preparation for problem solving:
Information collected on
*what customer really want?
· What other has done to solve it?
· What solutions have not been successful?
e) Incubation:
Conductive atmosphere is provided to promote creative thinking and stimulate ideas.
f) Inspiration: Superiors, coworkers encourage the creative work.
g) Externalization: Preparing the idea for others outside the organization also to develop and evaluate.
h) Influence: Influence Socio-Political leadership to gain acceptance for a generated solution.
2) APPLYING BASIC RESEARCH:
At this stage linking basic scientist work, applied scientist work and market to visualize market possibilities of new ideas.
3)INDUSTRAIALIZATION: At this stage, partial and profitable application of technology with the cooperation between Research personnel and marketing and engineering personnel for putting to industrial use for initial product process.
4) COMMERCIALIZATION:
Organizing trials and mechanisms for the transfer of technology and managing technological life cycle. The trials include
· Small scale pilot testing
· Launching innovation trials, prepare check manuals, for ease of understanding.
· Communication activities: Marketing people develops new promotional programme. Market is identified are targeted and enterprise develops capabilities to manage diffusion.
6) FULL SCALE DIFFUSION:
This is the last stage of comprehensive innovation/diffusion process. It includes a search for a wider range of potential markets, new industries new geographic regions, new market segments that have not been explored, and new ways to couple the innovation with other innovations. The way that electronics and computers have diffused throughout the industry and the world is prime example of full scale diffusion.
DEVELOPING A DIFFUSION STRATEGY:
TAKING THE TECHNOLOGY TO THE MARKET PLACE:
Developing a diffusion strategy involves a number of activities and many people.
1). Assess the Organizational Climate:
It includes the need to orient to the future, for timely action, to anticipate changes, threats, and opportunities, and for all members of the organization to play a role in launching an innovation.
Studies of successful diffusion show that presence of dedicated people who persist in their efforts. Such people are call ‘technology champions”
Or “change agents”
2) understand the role of “Technology Champion “:
He must play a bridge role within and outside the organization. Within the organization he should provide communications between the marketing and the R&D organization. In market driven organizations, the technological innovation come from the marketing. R&D reaction comes in the form of guidance on what is technically feasible and ideas from scientific circles.
When introducing a new technology to potential customers outside the organization he must explain the need for the technology. Demonstrations, films or other techniques can help the customer to become aware of new technology. He must show real interest in the user’s problems and prove it in his behavior. He should be sensitive to the user’s needs and help the user to overcome problems he encounters.
3) Define the Profile to the Technological Innovation:
Different types of technological innovation require different diffusion efforts. If the technology is new to both the market and the company, adopters of the technology have to be educated on its use. Diffusion efforts must stress the superior attributes of the new technology.
4) Use Opinion Leaders:
The identification of opinion leaders, assessment of their orientation (towards acceptance or rejection), assessment of their scope of influence, and development of ways to influence them is the important part of the diffusion strategy.
5) Develop a Communication Strategy:
Developing a communication strategy is to achieve successful communication the organizations must relate the innovation’s attributes to customer needs. The change agent must show, through its communications that it wants to be useful by meeting customer needs and is willing to learn from its customers.
Communications: Two areas of communication are within the organization (internal communication and with agencies outside the organization is external communication).
INTERNAL COMMUNICATION: The innovator must describe the innovation in terms that enable others to work on its behalf. Thus facilitating communications between R&D and marketing is a continuing management task. The message to internal corporate decision-makers should include realistic estimates of the initial resource requirements, staff, time, and money required to launch the innovation.
EXTERNAL COMMUCIATION: It is guided by the
a) attributes of the innovation and
b) The characteristics of the target market of the technological innovation.
a) ATTRIBUTES OF INNOVATION:
· relative advantage,
· compatibility
· complexity
· testability
· visibility
i) The relative advantage of a new idea helps determine its rate of adoption. Companies can reduce the perceived risk of trying an innovation by offering performance guarantee (like yield for a new process). Societal factors may also affect the customer’s perception of relative advantage. For example the oil crisis increase interest in energy saving technologies for automobiles, power generation etc.
ii) Compatibility is the degree to which potential adopters see an innovation as consistent with their values, experiences and needs. For example many organizations are diversifying into high technology computers and communication.
iii) Complexity is the degree to which an innovation is relatively difficult to understand and use. For example the user-friendly menu driven software have overcome user’s resistance to perceived complexity.
iv) Testability is the degree to which potential adopters can experiment with an innovation on a limited basis. For example, modular switching allows for testing the basic building blocks.
v) Visibility is the degree to which the results of a new technology are apparent to others. For example when digital technology was introduced in films they could perceive in significant difference in watching the film.
b) CHARACTERISTICS OF THE TARGET MARKET:
Communication channels: Two principal modes of communication for message about innovation are the mass media (radio, TV, film, mobiles, newspaper, magazines) and interpersonal channels (word of mouth, trade shows, demonstrations etc.)
The mass media are relatively quick in beaming the message to many people. But lack of feedback about customer reception will make the media less effective than interpersonal communication in molding attitudes to the new technology. This may be suitable for food preservation/processing with potential for large number of customers spread over a wide area.
Interpersonal communication can be a dialogue between the innovator and the potential customer, a strong relationship exists between understanding a technological innovation and begin influenced to buy.
TECHNOLOGY STRATEGY
TECHNOLOGY STRATEGY:
The strategy actually implies long-term, purposeful and interconnected efforts, while tactics implies action to deal with immediate specific problems. (Strategy is an antonym of tactics). Technology strategy is defined as a strategy to deal with the technology and related issues at macro and micro levels, with respect to set objectives.
MACRO LEVEL STRATEGY:
At macro level, each country outlines and adopts a technology strategy to achieve its political, economic, and social objectives and translated the same into action through appropriate policies and mechanisms.
For example, US may adopt of excel in “defense” or “warfare technologies” or in generation of first stage new technologies for knowledge-based industries, while Japan may excel in technologies for consumer products of newer designs at lower costs. Korea may decide to adopt and upgrade imported technologies using mass production techniques for consumer products without really caring much for aesthetic or high quality levels, and without bothering for defense or other strategic applications. On the other hand, India may decide to develop its own capabilities in strategic areas such as defense, atomic energy and space where technologies are usually closely guarded or for maximum utilization of its own resources. It may thus train S&T manpower, generate employment, promote rural development, and check population. Thus, technology strategies may vary with the national perspectives, and accordingly policies and mechanisms are evolved and implements. Financial resources play and important role in evolving the technology strategies. Depending on the resources available and the will of the government, the policies are evolved, mechanisms are set up and measures are taken to ensure the achievement of the set objectives.
MICRO LEVEL STRATEGY:
The industrial and organizational turbulence engendered by technological change and increasing international competitive pressures provide threats and opportunities for firms. An effective strategic approach to technology allows firms to cope better with these changes, and reduces the threats and insecurities facing them and their employees. In particular, technology strategy must anticipate the transient impact of technological innovation on the future competencies of the corporation. An appropriate level of formal planning provides systematic and documented strategy. The inputs to the process occur through participation of staff and line management and of special planning groups. Technology scenarios should help management focus on the interaction of changes between technology and change in markets, resources, regulation and competition.
IMPORTANCE OF TECHNOLOGY STRATEGY:
There are five issues which bear on the importance of corporate strategy for technology:
i) The need to cope with technology uncertainty.
ii) Complexity and discontinuous nature of technological development.
iii) The need for technology to be viewed in a global context.
iv) The need to attain complementarities, and
v) The relationship between corporate strategy technology and public technology policies.
LINKING BUSINESS AND TECHNOLOGY STRATEGY:
i) In what business should the firm engage in future?
ii) How should the firm be positioned in these businesses?
iii) What research, production and marketing will be necessary to attain those positions?
FORMULATING A TECHNOLOGY STRATEGY:
1. Identify all the distinct technologies and sub-technologies in the value chain.
2. Identify potentialy6 relevant technologies in other industries or those under scientific development.
3. Determine the likely path of change o f key technologies.
4. Determine which technologies and potential technological changes are most significant for competitive advantage and industry structure.
5. Assess a firm’s relative capabilities in important technologies and the cost of making improvements.
6. Select a technology strategy, encompassing all important technologies, that reinforces the firm’s overall completive strategy.
7. Reinforce business unit technology strategy at the corporate level.
The strategy actually implies long-term, purposeful and interconnected efforts, while tactics implies action to deal with immediate specific problems. (Strategy is an antonym of tactics). Technology strategy is defined as a strategy to deal with the technology and related issues at macro and micro levels, with respect to set objectives.
MACRO LEVEL STRATEGY:
At macro level, each country outlines and adopts a technology strategy to achieve its political, economic, and social objectives and translated the same into action through appropriate policies and mechanisms.
For example, US may adopt of excel in “defense” or “warfare technologies” or in generation of first stage new technologies for knowledge-based industries, while Japan may excel in technologies for consumer products of newer designs at lower costs. Korea may decide to adopt and upgrade imported technologies using mass production techniques for consumer products without really caring much for aesthetic or high quality levels, and without bothering for defense or other strategic applications. On the other hand, India may decide to develop its own capabilities in strategic areas such as defense, atomic energy and space where technologies are usually closely guarded or for maximum utilization of its own resources. It may thus train S&T manpower, generate employment, promote rural development, and check population. Thus, technology strategies may vary with the national perspectives, and accordingly policies and mechanisms are evolved and implements. Financial resources play and important role in evolving the technology strategies. Depending on the resources available and the will of the government, the policies are evolved, mechanisms are set up and measures are taken to ensure the achievement of the set objectives.
MICRO LEVEL STRATEGY:
The industrial and organizational turbulence engendered by technological change and increasing international competitive pressures provide threats and opportunities for firms. An effective strategic approach to technology allows firms to cope better with these changes, and reduces the threats and insecurities facing them and their employees. In particular, technology strategy must anticipate the transient impact of technological innovation on the future competencies of the corporation. An appropriate level of formal planning provides systematic and documented strategy. The inputs to the process occur through participation of staff and line management and of special planning groups. Technology scenarios should help management focus on the interaction of changes between technology and change in markets, resources, regulation and competition.
IMPORTANCE OF TECHNOLOGY STRATEGY:
There are five issues which bear on the importance of corporate strategy for technology:
i) The need to cope with technology uncertainty.
ii) Complexity and discontinuous nature of technological development.
iii) The need for technology to be viewed in a global context.
iv) The need to attain complementarities, and
v) The relationship between corporate strategy technology and public technology policies.
LINKING BUSINESS AND TECHNOLOGY STRATEGY:
i) In what business should the firm engage in future?
ii) How should the firm be positioned in these businesses?
iii) What research, production and marketing will be necessary to attain those positions?
FORMULATING A TECHNOLOGY STRATEGY:
1. Identify all the distinct technologies and sub-technologies in the value chain.
2. Identify potentialy6 relevant technologies in other industries or those under scientific development.
3. Determine the likely path of change o f key technologies.
4. Determine which technologies and potential technological changes are most significant for competitive advantage and industry structure.
5. Assess a firm’s relative capabilities in important technologies and the cost of making improvements.
6. Select a technology strategy, encompassing all important technologies, that reinforces the firm’s overall completive strategy.
7. Reinforce business unit technology strategy at the corporate level.
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