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Journal of Scientific & Industri al Research Vol. 60 , April 200 1, pp 291 - 297 Strategic Technology Management and International Competition in Developing Countries - The Need for a Dynamic Approach v P Kharbanda Nati onal institute of Science Technology and Development Studies, Dr K S Kri s hn an Marg, New De lhi I 1001 2, India The prese nt scenari o of free trade, globali zation and intense international competition call s for a strateg ic devel- opment of tec hn ology mana ge me nt part icul arl y in th e developing country e nt erp ri ses to enable th em to qui cken te chn ology capability building and compete in th e int ern ati onal mark e t. The present paper explores th e need and measures to adopt such a strategy and build up tec hn ology inn ova ti on systems to leap-frog a nd me et th e above objectives taking a few examples from Indi an scenari o. It is argued that the ITC of a country is th e s um total ofTM capabiliti es of th e firms in that countr y. More over, both TM andlTC are cumulative, in creme nt al and are th erefore evolutionary in natur e. It is necessary, th erefore, to talk about dynamic indicators of lTe. Such dynamic indicators are captured best in th e mec hani sms of se lecti ons - of choices and preferences on structures of in centives and strategie s. We argue that national indi cators of lTC are the same as th e firm level indicators of dynamic TM; and indicators of dynamic TM are the indicators of choices and preferences on structures of incentives and strategies. Introduction Rapid industrialization is an imperati ve for the developing countries. In this context the subject of tec h- nology developm ent and its mana ge ment is crucial. In the present scenario of globalization and international competition, an additional significance for the develop- ing countries is the thrust now needed to be given to the strategic developm ent of technology manage ment (TM). Indigenous technology capability building in th ese coun- tries can effectively enable them to compete in the inter- national market. Technological dev elopment has not usu- ally flourished in the deve loping countries in th e absence of building up of sufficient Indigenou s Tec hnological Capabilities CITC) I. Ishikawa 2 , in hi s study on role of import of technol ogy on ITC, stresses that a proper mix of foreign technology(tf) and indigenous technology(td) is necessary for raising the total level of indi ge nous tech- nological capability (TD). Once this l eve l ofTD is raised, the system is capable of importin g more advanced technologies(tf). Successful absorption and adaptation of a technology in a system raises its leve l of ITC which, in turn, determines the sophistication of th e technology it can further import2. Thus, ITC is the product of continu- ous amalgamation of indigenous R&D and imported tech- nologies. Th e pre se nt paper is about the indicators of ITC. Th e kind of technologi es a co untry can assimilate and disse minate large ly depends upon the l eve l of it s existing ITC. If the gap in the technology imported and existing ITC of the recipient country is too large, then there is ev- ery possibility that the technology may not get assimi- lated fully in a short span of time. Th e res ult of thi s is th at the technology gets outdated, and the recipient countr y may have to depend on import of the "improved versions" of the same technology repeatedly. The differential ofITCs between the donors and recipients, i. e. the "technology gap" determin es th e mod e of technology transactions which, in turn, affects the building of ITC in the recipient country. Further, this ITC of a country is a total multi ple effect of the ITC' s built up at the firm level through th e process of technological mana ge ment and change . Coun- tries with successful experience in TM have come to realize that a minimum level of te chnological co mp e- tence is re quired, not only to m odify and adapt foreign tec hnology to local nee d s, but also to provide the basis to an intelligent se lection from out of th e wide ran ge of potential supplies. Th e prop er se l ec ti on from the alte r- native t ec hnolo gies available from a broad requir es a co nsiderable a mount of techni ca l knowledge which is difficult to acquire in the absence of any domesti c expe- rience. It has bee n ac knowled ged that creating Strategic

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Page 1: Strategic Technology Management and International ...nopr.niscair.res.in/bitstream/123456789/26475/1/JSIR 60(4) 291-297.pdf · Strategic Technology Management and International Competition

Journal of Scientific & Industri al Research Vol. 60, April 200 1, pp 291 -297

Strategic Technology Management and International Competition in Developing Countries - The Need for a Dynamic Approach

v P Kharbanda National institute of Science Technology and Development Studies, Dr K S Kri shnan Marg,

New Delhi I 1001 2, India

The present scenario of free trade, globalization and intense international competition call s for a strateg ic devel­opment of technology management part icul arl y in the developing country enterpri ses to enable them to quicken technology capability building and compete in the international market. The present paper explores the need and measures to adopt such a strategy and build up technology innovation systems to leap-frog and meet the above

objectives taking a few examples from Indian scenario. It is argued that the ITC of a country is the sum total ofTM capabiliti es of the firms in that country. Moreover, both TM andlTC are cumulative, incremental and are therefore evolutionary in nature. It is necessary, therefore, to talk about dynamic indicators of lTe. Such dynamic indicators are captured best in the mechani sms of se lecti ons - of choices and preferences on structures of incentives and strategies. We argue that national indicators of lTC are the same as the firm level indicators of dynamic TM; and indicators of dynamic TM are the indicators of choices and preferences on structures of incentives and strategies.

Introduction Rapid industrialization is an imperati ve for the

developing countries. In this context the subject of tech­nology development and its management is crucial. In the present scenario of globalization and international competition, an additional significance for the develop­ing countries is the thrust now needed to be given to the strategic development of technology management (TM). Indigenous technology capability building in these coun­tries can effectively enable them to compete in the inter­national market. Technological deve lopment has not usu­ally flourished in the developing countries in the absence of building up of sufficient Indigenous Technological Capabilities CITC) I. Ishikawa2

, in hi s study on role of import of technology on ITC, stresses that a proper mix of foreign technology(tf) and indigenous technology(td) is necessary for rai sing the total leve l of indigenous tech­nological capability (TD). Once this level ofTD is ra ised, the system is capable of importing more advanced technologies(tf) . Successful absorption and adaptation of a technology in a system raises its level of ITC which, in turn, determines the sophistication of the technology it can further import2. Thus, ITC is the product of continu­ous amalgamation of indigenous R&D and imported tech­nologies. The present paper is about the indicators of ITC.

The kind of technologies a country can assimilate and disseminate largely depends upon the level of its ex isting ITC. If the gap in the technology imported and ex isting ITC of the recipient country is too large, then there is ev­ery possibility that the technology may not get assimi­lated fully in a short span of time . The result of thi s is that the technology gets outdated, and the recipient country may have to depend on import of the " improved vers ions" of the same technology repeatedly. The differential ofITCs between the donors and recipients, i.e. the " techno logy gap" determines the mode of technology transact ions which, in turn, affects the building of ITC in the recipient country. Further, this ITC of a country is a total multi ple effect of the ITC' s built up at the firm level through the process of technological management and change. Coun­tries with successful experience in TM have come to realize that a minimum leve l of technological compe­tence is required , not only to modify and adapt fore ign technology to local needs, but a lso to provide the bas is to an intelligent se lection from out of the wide range of potential supplies. The proper se lecti on from the a lte r­native technolog ies available fro m abroad requires a considerable amount of technica l knowledge which is difficult to acquire in the absence of any domesti c ex pe­rience. It has been acknowledged that creating Strategic

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292 J SCIIND RES VOL 60 APRIL 200 1

Technology Management (TM) as a main factor of tech­nological capability is of vital importance to the deve l­oping countries.

The technology management problems of the devel­oping countries can be broadly summarized in a few ques·tions. How can the technology and technol og ical capability of a developing country be developed? How to use the technol ogy it possesses? Which products should it manufacture now and which later? What capa­bilities does it need for production, both now and later? Which agents should supply those capabi li ties at the various stages of its technological development process? What technol og ical changes are needed to bring in com­petitive advantage? These problems of cho ices and pref­erences set thei r own parameters, and we argue th at such parameters const itute the indicators of tec hn olog ica l capabi lity - both cu rrent and potential , and the indica­tors of technology management at the macro leve l. It is argued that the lTC of a country is the sum total of TM capabi lities of the firms in that country. Moreover, both TM and ITC are cumulat ive, incrementa l and are there­fore evo lutionary in natu re. It is necessary, thererore, to talk about dynamic indicators of ITC. Such dynamic in­dicators are captured best in the mechan isms of se lec­tions - of choices and preferences on st ructures of in­cen ti ves and strateg ies. We argue that nati ona l indica­tors of ITC are the same as the finn leve l indicators of dynamic TM ; and indicators of dynamic TM are the in­dicators of choices and preferences on structures of in­centives and strategies. The paper di scusses in the sub­sequent section , the importance of strategic TM, followed by issues on strategic technological innovation. The sec­tion following addresses issues of competitive ad van­tage, followed by a discussion on approaches to tech­nology strategy including dynamic aspects. Case stud­ies are taken up thereafter, followed by a di scuss ion on the issues raised by the cases. A brief conclusion fol­lows.

Need for Strategic Technology Management Support of Technolog ical Change (TC) process by the

top management is primary to the success' of TM . Re­cent studies on Indian firms also reveal that the top lead­ersh ip has been main ly responsible in raising the indig­enous co nt e nt of TC 4

• This is in harm ony with Schumpeterian\ thinking wh ich regards entrepreneur as an important fi gure. Detail ed micro studies carried by Mascarenhas fi

, pointed out that in improving qua lity of production of the Hindustan Machine Too l (HMT) its

top leadership had been a positi ve facto r of import ance. Kin g7

, regard s that onl y having technical env ironmen t is no t a sufficient stimulant to independent techn olog i­ca l activity. Entrepreneurial activity of the top manage­ment, as a vital non-cognitive aspect ofITC, helps tech­nica l environment bringings effec tive TC in a given en­terpri se.

A technology developed in one c un try can onl y be part ia lly transferred to another country. A rec ipient coun ­try needs to learn both the tran ferab le parts, as we ll as the parts which cann ot be transferred. In order to over­come the untransferrable, it is necessary to have learn­ing at the shop floor level to fully absorb and adopt the tech nology and then to build upon it through incremen­tal innovat ions and technolog ical change. Lack of sulTi­cient will at the level of top management and ' learning by doing' coupl ed with in-house R&D, have been the main factors that, in spite of the massi ve flow of foreign technologies, stopped most the developi ng countries rrolll deve loping a strong ITC. One of the major issues raised by several workers has been the lack of TM and TC to absorb imported technologyX. Through TM, the enter­prise and its assoc iates can prop r1 y integrate and man­age the interdependence between techno log ical innova­ti ons and other types of innovati on (related to organiza­tiona l structure, systems, strategy, fin ance and manage­ment aspects). Thus , TM is now at the core of the stra t­egies of successful industrial firms f any size in any coun try.

Strategic Technological Innovation fOl-Leap-frogging Illcremental innovations are so widely adopted that

they have been mistaken as the rec ipe for enterpri se com­petitiveness by the entrepreneurs of most deve loping countries. Therefore, what most orga nizations ca ll inno­vat ion is actually confined entirely to incremental inno­vatio n. Without demeaning their relative importance fo r short- term gains in productivity, quality and profitab il­ity, and for provid ing both rap i credibility for change processes and building change managemen t capability, incremental innovations by themselves do not contrib­ute significantly to the enterprises' susta inable competi­tiveness. When managed effec ti ve ly. these incremen tal innovations result in quality and productivity gains which increase profitability and customer sa tisfaction. Further­more, they set the stage for the enterp rise's adopti on or a culture for change. These innovations, in the main. rely on im itation of what the best compani s are doing but technological imitation alone can nei ther provide the

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KH ARBA DA: STRATEGIC TECH OL MA AGEMENT & INTERNATIONAL COM PETITI O :m

market differentiation required for competiti veness nor

the know ledge-breakthroughs required by the New In­

dustrial Revo lution . As a consequence, technology trans­

fer by itse lf has lost significance. Any potenti ally sig­

nificant source of differenti ati on - cost structures, in­

te rna l logisti cs, di stributi on channe ls, fl ex ibility o f de­li very and others - should be targeted for strateg ic tech­

nolog ical innovations and change . Strategic Inn ovations are ongo ing processes in whi ch

a company synthes izes industry and techno logy r ores ight with the marke t place. As a result , it can strateg ica ll y

posture itself to produce the breakthrough new techno lo­

g ies, products and businesses, required by the New In­

dustria l Revoluti on. In order to harness the power of stra­

tegic innovation, a company must ac t on fo res ight (into the future) and on insight into current and future cus­

tomers needs . T he leverag ing o f foresight and ins ig ht

all ow it to conceptua li ze a des ired future and to c reate new products and businesses required to materi a li ze such

a future in a prod ucti ve way. Therefore, breakthrough

strategic innovations require prospecti ve analys is of tech­

nologies pri oriti zed by the ir impac t on ex isting and fu ­

ture co mpetiti ve factors, the detection of opportuniti es

and threats to ex isting and new bus inesses c reated by

market and technology di scontinuities it invo lves, the

precise identificati on and leverag ing of the ente rpri ses core competencies, diagnos is of the respecti ve ri sks of

technolog ica l strategies, balanced project portfo li os and innovation partner 's roles. Technolog ical Leap-Frogging

is beset with the lack o f capability of the developing

country ente rpri ses to effecti vely perform strateg ic tech­

nological innovations. The enterpri ses a re necessaril y

the main actors involved . According ly, the starting point

is inevitably to create a capac ity for strategic TM in the

enterpri se.

Competitive Advantage Smith 's~ , dictum on new di vision s of labour and new

improvements, Schumpete r 'slo, e mphases on competi­

tion from the new commodity, the new techno logy, the

new source of supply, and the new type o f organizati on have prov ided us the view tha t competition is the dri v­

ing force behind technological and institutional change. The same has been recentl y re ite rated by Porter ll , as the

. four broad attributes that are dete rminants of competi­

ti ve ad vantage: ( i) fac tor conditions (skill s, infrastruc-ture, etc.); (ii ) demand conditions; ( iii ) re lated and sup­

porting industries; and ( iv) firm strategy, struc ture, and

ri valry. These attributes form a mutua ll y re inforc in g sys-

tem in which the effect of one depends on the state of

the others. Techno log ical competiti veness, thus, can be

achi eved in three diffe rent ways:

( I ) Performing better than competitors on an a lready

ex isting dimens ion o f com petition, (2) Establi shing a new dimension on whi ch to com­

pe te, and (3) Creating a new product/market combinati on.

The c reation of a competiti ve ad vantage is act ua ll y

re lated to a process o f continuous innovati on and tec h­

no logica l change . T he c reat ion of a com petiti ve advan­tage, thu s, is the resul t of continu ous inn ovati on acti vity

of ente rpri se. The susta in abili ty of a competiti ve advan­

tage is s tro ng ly re la te d to th e app ro pri abi lity and exp lo itabili ty of the underl y ing innova ti ons . These. in

turn , are linked w ith two main factors - know-h ow and timing. In fact, innovation and techn ologica l change c re­

ate a comparati ve advantage w hen a gap is c rea ted be­

tween the innovating enterpri se and its competi to rs. This

is essenti a ll y a kn ow ledge and kn ow- how gap. The

appropri ability of an innovati on can be measured by the

effort that competitors make to narrow the kn ow ledge

ga p. When the kn owledge gap is w ide, co mpeti tors

should make great effort s to fill it , and thi s takes ti me and resource in vestments . The longer the time required ,

the larger the in vestments required , the mo re sustain­able is the comparati ve advantage. If the knowledge gap

can be narrowed down in short durati on, the inn ovator

can make profits from the innovati ons on short term ba­

s is. This shows that other way to ex plo it innova ti on is timing, which re lies on the ability for continuous in no­

vati on.

Traditional Approaches to the Formulation of a Technology Strategy Strategic management of techno logical innovation fo r

linking technology and bus iness strateg ies has been pa id inc reas ing attention o ver the last severa l yea rs. Hax and M ajlufl2 , proposed , the Strategic Technical Unit (STU)

as a unit, defined as the technologies embodied in a prod­uct and in its process of producti on. Later, as the tech­

nolog ies become sophi sticnted , thi s STU al so incorpo­rates the skill s and di sc iplines that a re applied to a pa r­ti cul ar product or process, in order to ga in techn olog ical

advantage. The process of eva luati on of techno logy st rat­egy starts with the techno logy environment scan and the inte rna l technology scrutin y. Techno logy environment

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294 J SCI IND RES VOL 60 APRI L 200 1

scan identifies techno logical opportunities and threats and assesses the attractiveness of each ST U. The inter­nal technol ogy scru tiny recogni zes strength s and weak­nesses assoc iated with each STU and determi nes the spec ific technological competenc ies which can be ac­quired to gain competiti veness . This is effecting cho ices and preferences. STU can be cons idered as the dynamic carrier of ITC indicators. Definin g and evaluating spe­c ific R&D projects and budgeting therefore fo ll ows this

effecting of cho ices, the latter carried out in the stage of

strategic programming. Conceptuall y, thi s approach to technology stra tegy

assumes that technology has to relate to a conventi ona l

generic strategic fra mework and support a se lec ted mar­ket pos itioning. At the center of a technology strategy, there is competiti ve advantage which an enterpri se is try ing to achieve. It begins with the specif ic industry where a firm is competing or will compete; and the unit of analys is is the technology embodied in the product. Thi s model foc uses on how a strategic decisi on affec ts or is affected by the change in technology, on how to embody technology in the strategy fo rmulation process, on how a techno logy programme can support a g iven strategy and fina lly, on how to ga in competiti veness through change in the technolog ical solution fo r a cer­tain product. However, thi s approach can be criti c ized, if applied to dynamic competiti on which impl ies con­tinuous innovation and technological change in high tech­

nological areas with high knowledge content. The ma in criticism concerns the unit of analys is that remain s static and limited to the product and its constituent technolo­

gIes.

Towards a Framework of Dynamic Technology Strategy Enterpri ses faced with the dynamics, need continuity

and coherence in terms of the skill s and kn ow ledge used for product applicati on. The nature of technologica l de­ve lopment is, therefore, cumul ati ve, and an enterprise innovation capability is strongly re lated to the resources and competenc ies developed over time through accu mu­lating tac it knowledge and experience 1.1 . Further, the ro le of learning-by-doing process in improv ing tech nolog i­cal competenc ies and continuous up-gradat ion of the knowledge domain is also cruc i a l l~ . A techno logy man­agement strategy formul ates th is ' trajectory ' by whic h technological resources are accumul ated, and used. An enterpri se needs to find a continuity which is not related to the stabi lity of the product parad igm but is rela ted to

the stability of the resource (knowledge) accumul ation process l",.

Three Indian Firms: Combining Business with Technology

Some e ffo rts in thi s direction to combi ne technolog i­cal approach with bus iness approach have been pursued by many Indian firms. Foll owing three examples drawn

from Indian scenario conform to the above approach.

The example of TELCO , a large Indian firn1 in the automobil e sec tor is a case in po int . T he strategy of TELCO has been to develop design competence and blend it with the requ ired engineering and manufactu ring com­petence. From 1954-64, TELCO had only one co ll abora­tion with Daimler-Benz AG, West Germany. By the ti me co ll aboration ended in 1969, at the end of 15 y period , TELCO had complete ly indigeni zed the product and pro­cess technologies mainly through in house R&D . T he main reason for the success of the strategy of TELCO has been the integrati on of technology into the business growth . As a result of Government ofIndia 's broad banding policy for automobiles in 1985, TELCO moved into the L ight Commercial Vehicle (LCV) segment without much ti me lag and produced completely indigenized LCV in 1986. The seventies and eighties thus, saw the intensive deve l­opment of in-house R&D at TELCO. Because of the com­petition fro m Japanese des igned L ight Commercial Ve­hicles (LCVs) (From 1985 onwards), the company en­tered into several manufacturing processes agreements to moderni ze its operations and to introduce new products through its own design efforts. During 1990s, TELCO increased the des ign and manufacturing integrati on. T he progress ive integration of des ign and manufacturing has been possible because of the co-locati on of R&D and pro­duction.

T he use of a common des ign data base across the manufac turing, eng ineerin g and des ign functi ons along with standardizati on has been one of the maj or technol­ogy management strateg ies adopted by TELCO for in­troduc ing many products at short intervals. By 199 1, TELCO int roduced several indi genously des igned ve­hic les including multi utility vehi cles like Tata S ierra and Tata Es ta te. T ill 1994-95 , TELCO has prod uced approx imate ly 1.4 m vehic les and of thi 1.2 m vehi c les have been produced after 1969 under 'Tata' brand-name.

W ith the result, TELCO at present is the largest com­merc ial vehicle manu fac turer in Ind ia wi th 70 per cent

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KHARBAND A : STRATEGIC TECHNOL MANAGEMENT & INTERNATIONAL COMPETITION 295

market and it has been able to compete based on its own combined commercial and technical strength 1(, .

Another example is that of Samtel Group in electron­ics industry for the manufacture of black and white pic­ture tubes. The Teletube Electronics was the first com­pany in India to manufacture picture tubes in the private sector without any collaboration. Its Managing Director, before returning to India in 1972, had worked in the US for six months with a TV picture tube manufacturer. He learnt the basic technology for its batch production . It started with an initial insta lled capac ity of 40,000 units in 1975 at Ghaziabad, Uttar Pradesh(UP), India . Up to 1983 the tubes were totally impOlted. In 1984, it estab li shed a Sister Company 'Samtel India' to assemble the three glass components of the bulb, viz. the panel , the funnel and the neck locall y. FUl1her, in 1983-84 the firm was importing complete electron guns. In 1985 the group set up another Company at Ghaziabad, to assemble electron guns indig­enously and by 1986, seven assembled components were being imported in the form of Semi Knock Down (S KD) kits. These were then fitted together locall y to form the electron gun . In 1988-89, it started importing Completely Knocked Down (CKD) kits, under which electron gun was imported in the form of twentythree components to be assembled locally.

The indigenization process was facilitated when the Government of India introduced fa vorable fisca l mea­sures in the form of reduced customs duty on import of components. For example, when the whole electron gun was imported , the import duty was 60 per cent ; for SKD components imported the duty was 40 per cent. Of the 23 components the three most important were cathodes, heaters, and stems. All these were indigeni zed later. By 1991 the electron gun was being completely manufac­tured for B& Wand color televisions and monitors for personal computers. In the complete TV picture tube, there are 40 components, of which only 20 components continued to be imported in 1990, whereas in 1982 all these components were imported. Cost-wise, the extent of indigenization is 85 per cent. In 1988, about 60 per cent of the raw materials were imported. In 1990, the cost of these imports was reduced to 16 per cent only. Presently, high grade phosphor, lacquer, and barium ox­ide getter are the only raw materi als which are still be­ing imported l7 . It is observed that , in the manufacture of picture tubes at Samtel Group , indigeni za ti on and technological change have been brought about mainly through the strategy of "Iearning-by-doi ng" process and

des ign engineering and is characterized by the subst itu­tion of imported technologies. Technologies have been picked up from various sources, put together and adapted. Expansion of the production capacity along with diver­sification of the products show that entrepreneuri al ca­pabilities played a vital role in building of technologica l capabil ities at the firm level.

Third example is that of Defence Research Labora­tory (DRL), Hyderabad , which is one of the top three pharmaceutical companies in India . It was founded by Dr Anji Reddy in 1984 and since then it has grown into a fully integrated pharmaceuti cal company. Along wi th other group firms , it has an annual turnover of over S $ 100 m. It consists of three organizat ions namely. Dr Reddy's Research Foundation ; Cheminor Drugs; and Dr Reddy's Laboratories Ltd . These three units have be­come multinational players. By the end of 1997, Dr Reddy 's Group has fil ed for 18 international patents. DRL uses strateg ic alliances for competence building, and for creating competitive advantage. For example. it entered into alliance with the wel l known world leader Novo Nordi sk; Debiopharm of Switzerland; Center fo r Cellular and Molecular Biology(CCMB), Hyderabad; Biomed of Ru ss ia; and Orgenics of Israel for co llabora­tive drug development and manufacturing. The main strategy has been systematic planning and tight coupli ng between R&D and business. This appears to be respon­sible for the high R&D producti vity at DRL. Their R&D portfolio approach has reduced the drug development cycle time and ensured that a regul ar stream of drugs are introduced every year lX . Thi s rapid growth rate has mainly come through dovetailing R&D strategy with business strategy and its major research strategy has been to continuously launch new products into the market. Since 1990, it has been launching a new product every year. Its R&D expenditure has ri sen from 1.53 per cent of sales turn over in 1989 to 9.54 per cent in 1995-96. This has been made possible through balanced mixing of:

• Innovation. • Entrepreneurial capabilities.

• Long-term vision . • Competence in drug regulatory processes. • New products R&D planning.

Discussion

We can thus conclude that these firms have been quite success ful in combining technology strategy with busi-

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296 J SCI IND RES VOL 60 APRI L 200 1

ness strategy to capture the market. Thi s is ev ident fro m the fact that these fi rms have been able to capture a large share of the Indian and the export market. However, thi s is not the case with a large number of other Indian f irms. At present, technologica l changes in the developing coun­tries are restric ted to products, manu facturing processes, and re lated equipme nt. G iven the imperati ves o f market

d ifferentiati on and the broad scope fo r appl ying the new generic techno logies, technol ogica l changes should , in principle, be ta rgeted at a ll ac ti vities va lued by c lients, including ex tem allogisti cs, commerciali zati on channels and services. In many businesses, techn o logical innova~ tions conferring fl ex ibili ty or re li ability of de li very, for instance, often prove more effecti ve for d iffe renti ati on and competiti veness than attempting furt her ga ins onl y th rough bring ing changes in product qu al ity and pri ce.

Technological innovations dramatica ll y affec t, both price and non-price factors. Effecti ve techn o logica l dec isions and actions are actually at the core of effect ive business res tructuring, e nterpri se reeng ineering, and the applica­ti on of tota l quality management processes. T hey are the bedrock for se izing the ne w business opportun iti es that stem from technolog ical and market di scont inuities and fo r estab lishing the required g lobal partnerships to brin g

about the ir materi ali zation.

Most of the Small and Medium E nterprises (SMEs) in the deve loping countries lack the technolog ica l re­quirements fo r sustainabl e competiti veness . Usua ll y, their technol ogical needs re late only to grad ual improve­ments in product quality and producti vity or machinery up-grading. Thi s inhibits s trategic breakthroug h inno­vati ons and renders these companies blind to new busi­ness opportunities presented by market and techno logi­cal di scontinuities. The re lated capab ility required to diagnose the technologica l competiti ve pos ition o f the company, to de fine techno log ical strateg ies and to ef­fec ti ve ly implement re lated techno log ica l innovati on projects do not exi st in the great maj ority of enterprises. In the scenario of g loba lized markets and inc reased in­ternational competition, these enterpri ses require more and more TM skills and ex tern al support for both R&D and techno logy transfer projects. In thi s direc ti on, a re­cent mo ve by the PHD Chamber of Co mmerce and In­dustry (PHDCCI) is worth mentioning, which has mooted a proposal fo r formulat ing a "country-Tech no logy-Ma­trix" for strateg ic management of ind igenous tec hno lo­gies with a view to helping Indian industry bu ild a g lo­bal and long te rm techno logical competitiveness I') .

Conclusions

We have argued that the ITC of a 'ou ntry is the sum tota l of T M capabilities of the fir ms in th at coun try. Moreover, both TM and ITC are cumu lati ve, incre men­tal, and are therefore evolutionary in nature. It is neces­sary, therefore, to ta lk about dynamic ind icators of ITC. S uch dynamic indicators are captured best in the mecha­ni sms of se lections - of cho ices and preferences on struc tures of incenti ves and strateg ies . We argue that natio nal indi cators of LTC are the same as the firm level ind icators of dy namic TM ; and ind icators o f dynam ic TM are the indicators of cho ices and preferences on struc­tures of incentives and strategies . T he current widespread need to compete through market diffe re nti ation, brought about by globalization and trade liberalizati on, has placed technological innovati on and its effective m anagement at the core of successful enterpri ses strategies. In order

to achieve this, the developing countries enterpri ses have to be capabl e of effectively managing the strateg ic tech­nolog ical innovations, through adopti on of a dy nam ic techno logy st rategy, to genera te constant ly the new tech­nol og ies, new products, and services that c haracte rize the highly know ledge intens ive New Indust ri al Revo lu­ti on.

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