As I was sick on the day of class, I couldn't attend the session - so this post will be an overview of what I have read and my takeaways from the readings.
Brief Overview Summary + Interesting Observations and Ideas:
There are two parts to the topics covered for week 3 and they are: (a) Technology and Industrial Development: Moving towards sustainable development; and (b) Technology and Innovation Management.
(a) Technology and Industrial Development
The heady age of rapid technological advancement and industrial development (e.g. growth of the manufacturing sector from 1950-1973 followed by boom of the services sector from 1973 onwards, especially in the developed countries) sees industrialization as a crucial driver of growth in countries.
However, there is also a need to, going forward, pursue sustainable industrial development, given that we have limited resources, in order that there may be lasting improvements in living standards, incomes, working conditions and healthcare.
The first reading reviews the key issues in industrial development from the perspective of the European Commission (EC) and the initiatives which the EC has implemented in taking the lead to reduce the adverse impacts of industrial processes. Some of these initiatives include the Integrated Pollution Prevention and Control Directive (1996) which aims to minimise pollution from around 55,000 major industrial and agricultural installations in the European Union (EU); the Environmental Technology Action Plan (2004) which aims to promote environmental technologies and eco-innovation in Europe; and the European eco-label which is an environmental labelling scheme allowing consumers to make environmentally-friendly choices. The article also notes that one of the ways to drive progress towards more sustainable industrial practices is by stimulating technological innovation - through research and development of environmentally sound technologies and supported by legitimate environmental regulation. There is a need for countries and individuals to engage in frequent dialogue, knowledge management, technology transfer, education, training and capacity building so that sustainable industrial practices can diffuse throughout the world and benefit the global community. Costs of inaction must also be acknowledged and avoided.
Another reading sets out the justifications for pursuing sustainable industrial development and highlights the concerns that we would face should we continue our current patterns of industrial development.
Among the imperatives for sustainability are:
1. Globalization and its attendant consequences - unprecedented rates of growth in developing countries leading to the rise of a global middle income with greater purchasing power; freer movement of goods, capital and people across international borders; rapid economic growth in emerging countries placing enormous pressure on the physical environment, very possibly exacerbating environmental damage
2. Evolving consumption patterns globally - concerns with regard to the demand for, pricing and availability of water, food and energy; the business imperative in response to rising resource prices
3. Evolving industry consumption patterns - the urgent need facing companies to redefine their product and process models in light of sustainability consideration and to align their supply chains to support them.
The article concludes by recognizing that economic viability must be a core component of any sustainability initiative undertaken in our modern world context and notes a set of design principles which has emerged to guide companies along the path to sustainable growth.
(b) Technology and Innovation Management
The readings present the idea of technological learning and innovation, which is noted to be critical for the constant renewal and survival of businesses in today's globalized world, as well as to enable countries to be a forefront leader in terms of technology achievement.
Key lessons that one can draw from the technology innovation policies of the United States are:
1. Technological innovation is a complex process involving invention, development, adoption, learning, and diffusion of technology into the marketplace. The process is highly iterative, and different policies influence outcomes at different stages
2. Gains from new technologies are realized only with widespread adoption, a process that takes considerable time and typically depends on a lengthy sequence of incremental improvements that enhance performance and reduce costs
3. Technological learning is the essential step that paces adoption and diffusion. “Learning-by-doing” contributes to reductions in production costs. Adopters of new technology contribute to ongoing innovation through “learning-by-using.” Widespread adoption accelerates the incremental improvements from learning by both users and producers, further speeding adoption and diffusion
4. Technological innovation is a highly uncertain process. Because pathways of development cannot be predicted, government policies should support a portfolio of options, rather than a particular technology or design.
Drawing from the success of countries categorized as leaders under the UNDP human development report 2001 Technology Achievement Index, one also realises that to be a leader in technology innovation, a country/organisation needs to ensure that innovation is self-sustaining and seek to achieve high levels of technology creation, diffusion and investment in human skills.
Another reading written by Prof Shahi also introduced the concepts of "Cloud" opportunities, "Summit" opportunities and "Valley" Opportunities in the field of BioBusiness.
Cloud opportunities represent business ideas that are technology and knowledge intensive, that is still largely experimental and which face high barriers to entry and little competition in the area.
Summit opportunities are opportunities which yield high returns (the law of increasing returns underlie these business cases) and which draw very high interest, although at present, there are few competitors and relatively high barriers to entry. However, Summit opportunities very likely will find themselves coming under threat from competitors offering similar products/competing technology solutions and could find themselves sliding down and becoming Valley opportunities.
Valley opportunities represent opportunities which have been "commoditized", with low barriers to entry as the knowledge to capture the opportunity is generally available so no player is able to establish a competitive advantage. These opportunities although of low perceived value in themselves are nevertheless very ripe for rethinking and injection of innovative and knowledge-intensive approaches that would help them transform into much higher value-added Summit opportunities.
Hence, the business imperative is to aim for higher value-add undertakings by either from translating cutting-edge new technology and knowledge-intensive “Cloud” opportunities into “Summit” opportunities, or from rethinking and transforming traditional “Valley” opportunities towards becoming “Summit” opportunities through strategic investment in innovation for new product, service and technology development in response to market interest and demand.
Key Takeaway Points:
1. Our current pattern of industrial development is not sustainable and there is a pertinent need to reinvent our approaches to development and growth. Ignoring the eminent dangers of our ravenous consumption-driven economic model will only be our downfall eventually. Ominent outlook aside, the globalized era we are in and the rapid technological advances that take place today present unique opportunities for us to harness constantly emerging and promising technological innovations to chart sustainable paths to continued industrial development. Hence, development need not languish into staticity in the move towards sustainability.
2. In order to stay ahead of the technological curve and remain competitive and relevant, it is helpful for businesses to understand the concept of Valley, Summit and Cloud opportunities. This would give them a framework within which to recognize the options they have and to work towards their business goals. Whether is it to strive for premium returns or to simply remain relevant in the market.
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