Tag: technology

How to figure out how technology is changing

In everyday English, technology can refer to a gadget, artefact, know-how, or software application. In contrast to this colloquial understanding, Professor Brian Arthur[1] emphasises the importance of a broader understanding in which technology is seen as a means to harness natural phenomena and arrange processes to produce something or achieve a specific purpose.

To substantiate this broader understanding of technology, Brian Arthur[2] provides three different definitions of technology:

  1. The most basic definition is that technology (in a singular sense) is a means to fulfill a human purpose by harnessing natural phenomena. For some technologies, this purpose may be explicit; for others, it may be vague. As a means, a technology may be a method, process or device. A technology does something, it executes a purpose. It could be simple (a roller bearing) or complicated (a wavelength division multiplexer). It could be material, like an engine, or nonmaterial, like a digital compression algorithm. Some technologies combine with other technologies into technology architectures, which may form part of even larger technological systems. For example, an engine is part of a car, which is part of a more extensive transport system. However, an engine itself consists of an assembly of complementary technologies. Generating energy with a photovoltaic panel, using MS Teams/Slack/WhatsApp to coordinate a team or designing with computer-aided design (CAD) software are examples of technologies at this level.
  2. A second definition is plural: technology as an assemblage of related practices and components. This covers technologies such as electronics or biotechnology that are collections or toolboxes of individual technologies and practices. These assemblages can also be called bodies of technology as they harness related phenomena. Examples are the catalogue of ways alternative energy can be generated or how different sensors and control systems can be deployed in a manufacturing plant. When solving a problem, it is possible to choose between alternatives from this toolbox or different toolboxes.
  3. A third definition is technology as the entire collection of devices and engineering practices available to a society. As new technologies become available, new institutions, norms, and supporting technologies are needed to make them feasible. In other words, the economy expresses its chosen technologies.

Arthur argues that we need these meanings because each category of technology comes into being, and evolves, differently (Arthur, 2009:29).

As technologies are absorbed or deployed, complementary technologies, including regulations, institutions, and norms, are deployed or developed. This is a process of structural deepening, where old technologies are increasingly substituted with new combinations of technologies and institutions, and industries, markets, and institutions adjust or reorganise.

These three definitions are shown in Table 1. Changes in the first category are relatively easy and fast, becoming progressively more difficult in the second and third categories. The third category is marked by an ongoing change process often carried over generations or extended periods.

Table 1: Definitions of technology

Definition of technologyExamplesRelevance to tracking tech change
Technology as a method, process or device.CAD software, Enterprise resource planning (ERP), Industrial robotics, recycling.Identifying technologies that are affecting companies, or that require coordination beyond a single firm.
Technology as an assemblage of practices and components – toolboxes.Digitalisation of manufacturing, greening of manufacturing, supply chain integration.Identifying technologies that require many simultaneous changes in one or many organisations. Structural deepening would require coordination between industries and enabling institutions.
Technology as the entire collection of devices and practices available or the economy as an expression of its technologies.The societal preference for greener solutions, a growing sensitivity towards the effects of mankind on nature, a new awareness of healthier living.The structural change processes that shape what the economy is evolving towards as technologies, institutions and markets co-evolve. New institutions create the stepping stones to the future, while old institutions try to maintain the past.

Tracking technological change at the first level is almost futile. This is where companies, or perhaps individuals in companies, procure or design a new solution that can solve a specific problem. This is hard to measure or track. People also describe their actions differently. I once met a CEO who called this R&D, while the financial director called it “investment” and the production manager called it “replacing something that we could no longer fix”.

As more and more people invest in a given technology, an assemblage or toolbox starts to develop. As time goes by, more and more technologies in this toolbox can connect with each other as standards and common sub-modules are developed. Alternative technologies that approach the same problem or draw from the same principles will emerge. The result is that companies can choose different configurations of related technologies within the same industry or market. However, it is also possible that companies can choose from different toolboxes in the same industry. Service providers that can help companies choose alternatives or implement solutions enter the marketplace. Enabling institutions that provide technological services, shared infrastructure, or education programmes may emerge around the technological toolboxes. A new technology language has formed. From a measurement perspective, tracking this kind of change in economic statistics is tricky because the changes are still mainly within companies, and economic statistics tend to lump all of the companies in a sector together. The implication is that while the first level of technological change is too detailed, the second level may be too generic.

One point is worth expanding further. Even if a new technological assemblage is available and well supported, some companies or industries might be unable to reach it. This is mainly because the new competencies required might be too far from what they have in place, and adopting these new competencies would require a completely new business model. These companies might actively resist and advocate against the new technological paradigm, but resistance might simply delay the inevitable.

At the third level of technology, the society and the core technological arrangements that make it distinct needs to be considered. At this level, it is not only about the technologies, but also the web of enabling institutions, social norms and markets that shapes the everyday choices of consumers, investors, businesses and the government. For instance, you could compare the public transport options in the Netherlands with those in South Africa and describe the differences in technological terms. At this level, it is again easy to identify the technologies, but it is hard to figure out how to replicate the outcomes or the pathways that led to a certain outcome.

[1] Arthur, W.B. 2015. Complexity and the economy. Oxford, New York: Oxford University Press.

[2] Arthur, W.B. 2009. The nature of technology: what it is and how it evolves. New York: Free Press.

This blog was first published on the TIPS Technological Change and Innovation System Observatory website.

Four functions of innovation and technology management

This article is meant for my business clients and colleagues managing technology transfer and innovation extension services.

In the past I have written much about the professionals and organisations who are responsible for helping entrepreneurs to improve and strengthen their innovation portfolios on my personal blog site.

To recapitulate: I believe that many industries are struggling to modernise because their supporting institutions use completely different frameworks to manage innovation (or perhaps the supporting institutions make their choices as randomly as enterprises do).

One of the first concepts that a tech transfer institute or industry support organisation should transfer to enterprises is “how to manage innovation and technology”. Just because there is an engineer or an MBA/PhD in a company does not guarantee effective or creative management of innovation and technology.

Today I shall focus on the four broad functions that must be managed strategically in every enterprise and supporting institution. Even if someone in the organisation has the job title of Innovation Manager or Technology Manager, these functions should still be visible throughout the organisation. In other words, this is not somebody’s job, but it helps if somebody coordinates these activities. Also, see these four functions as the minimum. More mature innovating organisations will have far more depth than these four high level headings.

The four functions agreed by most scholars and innovation experts can be summarised roughly as:

  1. Searching and scanning for new ideas and technologies, both within and beyond the organisation. This includes looking at technologies that could affect the clients of the organisation, and technologies that could disrupt markets and industries.
  2. Comparing, selecting and imagining how different technologies could impact the organisation, its markets and its own innovation agenda.
  3. Next comes integrating or deploying the technology or innovation into the organisation. This includes adjusting processes and systems, scaling up implementation, and project managing the whole change process.
  4. The last step is often overlooked, but new technology and innovation often make new ideas, innovations and improvements possible. I call this last step exploiting the benefits of a new technology or idea. This could involve leveraging some of the additional benefits or features of a technology, perhaps by creating a new business unit focused on an adjacent market or particular offering.

When I visit institutions, organisations and companies, I always ask “who is thinking about change taking place beyond your industry or key technology?”. I cannot tell you how often I hear that “the CEO” or “the production manager” are on top of new developments and will be attending a tech fair next year. How can this huge responsibility fall on the shoulders of one or two people, who are at the same time biased towards the current strategy which favours justifying past (sunk) investments? Or if you ask “How did you choose between two technologies?”  you will be surprised how little time was spent considering new business opportunities, or how few companies asked for on-site demonstrations or samples from their preferred technology providers.

I will refrain from being too critical of technology transfer institutions and industry-supporting organisations, except to say that these organisations should be a prime example to industry of how to scan, evaluate, compare and integrate new ideas and technologies. We don’t just want to see the shiny machines and neat facilities, we want to understand how you arrived at your decisions, and how you made the best of your investments after implementing the change. Furthermore, industry wants to know what’s next, or what’s beyond their vision and how it may affect their industry.

To bring it all together, the technological upgrading of industries is plagued by many different market failures. These failures include the tendency NOT to invest due to high research costs, due to fears about making the wrong choices, or because so many decisions and changes must be made at the same time – this while the business continues, markets fluctuate, and technologies change faster and faster. Companies (and institutions) cannot afford just to kick start innovation management immediately before making a change (or when forced by external forces to make a decision). These functions must be managed strategically on a continuous basis, both at the level of top management and within the different functions of the organisation. Both companies and their supporting institutions need to manage innovation and technology, not only from an operational perspective (striving for continuous improvement, etc.) but also from a strategic point of view.

Radio interview on technology

Following the interview on Cliffcentral.com two weeks ago on innovation during The Leadership Platform show, I was asked to return. This time the conversation was about technology. You can download the podcast here.

20161031business3

Richard, Shawn and Daniel (left to right)

 

After 30 minutes, the attention switched to a small and medium enterprise. I had invited Daniel Paulus, one of my clients, to the show to be interviewed. Daniel is one of the founders of the Louie Daniel jewellery company, a speciality retailer of custom made jewellery and diamonds. They are one of the leadership teams that I have been coaching on technology, innovation, strategy and culture.

I promise to reveal more about my formal coaching programme shortly.

 

Interview on knowledge for innovation

I had the privilege of being interviewed by Richard Angus (CEO The Finance Team) on the Business Masterclass programme on Cliffcentral.com. The topic of the interview was about concepts on knowledge and knowledge management that are relevant for business leaders. Listen to the podcast here.

During this 30 minute interview we talk about several knowledge concepts, like the distinction between tacit knowledge and codified knowledge and why this matters. I explained my favourite concept of how knowledge creation can be enhanced to improve innovation.

This interview is based on the article that I wrote earlier this year for the University of Stellenbosch Business School Executive Education newsletter.

cliffcentral

Thank you to Richard and the show host Adriaan Groenewald from the Leadership Platform for this opportunity to talk about a topic that I love so much.

 

 

 

Post 2: Technological capability: enabling enterprises to innovate

This is the second post in this series about building technological capability. I believe that this technological capability is best developed by an innovation systems approach with a particular view on emergent properties of the system. I have written before about the importance of taking a business perspective on an innovation system here and here. In the previous post I explained our concept of technological capability. I argued that one of the elements of technological capability is “The skill of the producers to imitate and innovate at product, process and business model levels. This is largely dependent on pressure to compete as well as pressure to collaborate with each other”.

In this post I will look a little deeper into this ability to innovate, collaborate and competition. For the remainder of this post I will take the perspective as a knowledge broker (or facilitator) working with an technology transfer center responsible to promote the upgrading and modernization of a sector.

One of the challenges of promoting an innovation system is that the technological capability in the private sector is not easy to see. Often we have to use proxy indicators such as exports to determine whether our industries are innovative and competitive. But export figures does not tell the whole story.

While the physical attributes of a product or component could tell us something about the sophistication of the product and the process behind it, even a simple metal component could be the result of an extremely sophisticated process that combines different knowledge domains, technological capabilities, materials (combining metallurgy and sand for instance in a foundry) and enterprises. Even if you have access to the premises, the tacit knowledge, experience and networks that are accessed to make a product is not always detectable.

Not only is it hard to determine what companies are able to do, it is also difficult to figure out what they cannot do. The fact that a manufacturer three years ago developed a successful product is not a guarantee that they can still do this. The finding that a particular function or technology is not present in an enterprise does not mean that they do not have access to this technology when they need it. When the entrepreneurs claim that they lack finance to do innovation this is often merely describing a symptom.

Enterprises that are able to adapt, change and improve not only their products but also their processes and business models are essential for any economy. This is about competition, but it is also about unlocking the capability of individuals, being more responsible with resources, and being responsible within a broader socio economic environment.

Finding ways to get enterprises to collaborate is very important for the health and dynamics of an innovation system. At the same time, stimulating competitiveness, not only at the level of price, but in terms of alternative approaches to solve a problem or in terms of different ideas and concepts is necessary. Often business associations and industry bodies are good with some limited collaboration, for instance on advocacy, but not so good at stimulating new (competing) ideas, approaches, models and solutions.

For a broker or intermediary it is still possible to move between and into enterprises to find opportunities for improvement. I am often amazed at how hesitant universities, technology intermediaries and research centres are to

Searching for opportunities for collaboration
Searching for opportunities for collaboration

embrace this privilege of being able to move around in an industry to see what is possible and what constraints or barriers to innovation exists. I will expand on that in a future post in this series.

For enterprises to find out what other enterprises can or cannot do is a lot more difficult. Firstly, by asking somebody if they can or cannot do something might give them a hint that a specific opportunity exists. Secondly, many companies do not like their competitors on their premises. Thirdly, there are many risks and costs associated with working with a competitor. Lastly, there is a risk that a competitor is able to exploit a joint opportunity better and thus gain more prominence in the market.

The ability of enterprises to find opportunities to work together is important as a means of reducing costs and gaining access to resources that individual enterprises cannot afford independently. For instance, skills development, joint marketing efforts are quite easy to cooperate on.

However, on issues such as joint research and development, procuring scarce and sophisticated equipment, or collaborating in a more intensive way such as a cluster often require an external broker. Often this kind of brokerage is hard to organize at the level of enterprises. Industry associations, Universities, technology intermediaries of government programmes aimed at industry promotion must step in. This is where I earn my bread and butter as many industry support programmes are ill-equipped to diagnose, articulate and facilitate these kind of firm level collaboration processes as part of improving an innovation system.

Let me bring all of this together. Enterprises that are striving to improve their performance, their value add and their overall competitive offering are an important element in an innovation system. These enterprises are expected to compete with each other, not just on price, but with different approaches, solutions and concepts. At the same time, we expect to see that these enterprises cooperate or collaborate on issues where there are benefits to do so. The dynamic of how enterprises interact with each other (collaborating and competing) is a direct contributor to the technological capability of a region, an industry or an economy. Where enterprises are not able to work together and at the same time compete with one another, a key ingredient to the technological capability is weakened. It is not always possible for enterprises to formulate or develop opportunities for collaborating due to many risks, costs and the difficulties associated with forming the cooperation concepts. This is a technology related market failure that sometimes can only be overcome by a broker-like service of Meso-level institutions such as technology intermediaries or education institutions.

Technology: what do we mean?

In development practice reference is often made to technology as being about hardware (equipment) and software. “Software” is borrowed from information technology to mean the invisible stuff that makes things work, in other words knowledge especially in its coded (tacit) form. This is clumsy. There is a close relationship between innovation and technology, and that is why this confusion matters and should be addressed.

Frequently, innovation is thought of as a new product or hardware artefact, or an improved process made possible by new technology. This error limits technology to hardware, and neglects the other aspects of technology.  It is necessary to understand technology from a much broader perspective.

As alluded to earlier, the narrow definition of technology refers to technical artefacts or hardware (with some supporting documents and instructions). However, complementary factors, without which the employment of technical artefacts makes no sense, are above all qualification, skills and know-how (of the people who work with artefacts), and organisation (i.e. the process of tying artefacts into social contexts and operational sequences). The organization part refers to being able to optimize the way the technology is integrated into other processes, and also how other processes must be changed to exploit the advantages of the new organization.

Meyer-Stamer (1997) formulates three conclusions based on the definition provided above:

(1)    Technology should not be seen in isolation from the environment in which it emerges, or from the organisational structures in which it is used. Technology does not come about in a vacuum; it always develops in concrete social contexts. It is therefore never neutral, and is always developed on the basis of given (economic, social, political) interests.

(2)    Technology often embodies organisational factors. A closed process in the chemical industry or a production line in the metal-processing industry, for instance, consists not only of technical knowledge of individual processing sequences, it also implies organisational knowledge about possible transitions between these sequences.

(3)    Any narrow definition of technology, looking at hardware only, accompanied by the view and approach that go along with it, can thus be tantamount to a guarantee that projects will fail – in development cooperation no less than in many international high-tech corporations.

In the discussion on development policy and the field of development cooperation in recent years, there has been a general acceptance of the broad definition of technology, one that does justice to the problems outlined here. This definition includes four components originally described by Enos (1991:169) illustrated in the image on the right:

(1)    Technical hardware, i.e. a specific configuration of machines and equipment used to produce a good or to provide a service.

(2)    Know-how, i.e. scientific and technical knowledge, formal qualifications and tacit knowledge.

(3)    Organisation, i.e. managerial methods used to link hardware and know-how that includes integrating all the elements into an organization.

(4)    The product, i.e. the good or service as an outcome of the production process.

 

The advantage of the broad definition is that it can help to avoid barren discussions in that it prevents, for instance, any equating of technical artefacts with technology. To this extent it mirrors experience gained, for example, in development cooperation – in view of this definition it is obvious that technology cannot be transferred in package form by for instance combining hardware with manuals and some field training. At the same time it is, against this background, easier to comprehend that technology is involved whenever production goes on – even when seemingly primitive technical artefacts are utilised in the process, for “no country is without technology, not even the most primitive” (Enos, 1991:169). So even a simple manual activity like using a shovel to dig a deep hole involves multiple elements and processes of different technologies. However, the absorptive capacity of countries, regions within countries and between different firms differs vastly.

Practically speaking, this means that practitioners must be careful when describing technology in relation to hardware that they do not neglect the other dimensions. For instance, when trying to understand where ‘new technology’ comes from in a value chain, make sure that respondents are not only identifying equipment suppliers. A second line of enquiry may be to get respondents to consider other kinds of technology related to know-how, or how to configure a specific process or organisation.

If a broader definition of technology is accepted, it becomes clear that there is a close relationship between technology and various forms of knowledge and also between technology and learning.

 

ENOS, J. 1991.  The creation of technological capability in developing countries. New York: Pinter.

MEYER-STAMER, J. & DEUTSCHES INSTITUT FÜR ENTWICKLUNGSPOLITIK. 1997.  Technology, competitiveness and radical policy change : the case of Brazil. London ; Portland, OR: Frank Cass.

 

What is the effect of Finland declaring broadband a basic right?

The news services are alive with reports that Finland has declared broadband of 1mb/s a basic right for all Finns.  Quite interestingly commercial service providers will be obliged to provide this service from 1 July to all households. No I can hear you all say “but that is a developed country, we have different priorities in a developing nation!“. And you would all be right. I agree completely with you. We have huge unemployment here in South Africa and the rest of Africa. Apparently, we (South Africa) have more people receiving grants than we have employed persons(also reported internationally today).

However, you have to wonder what the potential effect on our and other developing countries may be. Exactly what happens to the levels of innovation and of course comparative advantage when a whole society gains access to the internet at high speed for free? Will this affect our economy? In which way? How will this affect the so-called knowledge gap between industrialised and emerging economies?

Any ideas?

Shifting towards innovation and technology application

Have you also noticed that increasingly local economic development is captured by the public sector, often from a governance perspective, while the role of the private sector and its own development gets reduced to a consultative stakeholder? I find this amusing, as the private sector is the acknowledged driver of growth and increased wealth. I have already shifted my attention to the stimulation of technology use and innovation in the private sector, as I cannot imagine a more strategic way to create a new future for our region.

But strangely, the private sector, at least at an organised level, has only in a few places in Southern Africa taken the lead in its own development. While the media and government complains about job losses, firm closures and the increased uncompetitive performance of the industries, industry itself seems to be waiting for government to bail them out!

At the moment I see only a few ways out of the hole that our industries are in. Firstly a more pro-active approach towards the use of technology and innovation is required. Government is not going to donate the machines, and nobody will give a firm the research. Firms need to invest in new technology. Secondly, at a collective level, industry bodies need to move from advocacy towards a more proactive approach of building value chains and industrial networks. Many famous developmental fads like value chains, incubators, clusters etc have their origins in the private sector, even if these instruments are often widely used and abused by the public sector. Why are we seeing so little investment in these instruments by the private sector for the benefit of a specific industry? Thirdly, industry needs to realise that both increased competition and increased globalisation have changed the rules. Just as governments have to deal with immigration and passport issues, business should become a bit more obsessed with shaping the economic, education and science policies of their countries.  If industry does not as a collective become more vocal about education standards, research missions or industrial support then we are in for a tough 20 years!!

Hey, what do you think we can do to inspire our industries in Southern Africa to become better organised and more involved?

How can we get businesses to start investing in the latest technology?

How do we get business to not only innovate in marketing and advertising (we are good at that) but also to invent new business models, new technologies and new solutions to the problems of the world?

Any ideas or proposals are welcome!!