TECHNOLOGY MANAGEMENT Strategic Perspectives on Technology Innovation 1 Krsto Pandza - Technology Management
Dec 11, 2015
Krsto Pandza - Technology Management 1TECHNOLOGY MANAGEMENT
Strategic Perspectives on Technology Innovation
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Learning objectives for the moduleDevelop understanding of: The role technology dynamics play in creating
economic growth of societies and competitive advantage of firms.
Different types of technology innovation. Appropriateness of different analytical tools for
forecasting and analysing technological change. Trade-offs between exploration and exploitation. Science and technology-driven entrepreneurial
process. Social nature of shaping technological trajectories.
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The structure for the week 1
DAY 1: Technology dynamics, competitive advantage and Strategic analysis of technology.
DAY 2. Managing technology innovation in open environment (Kodak and Intel case studies).
DAY 3: Corporate entrepreneurship and technology commercialization.
DAY 4: Presentations and wrap-up.
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Concepts and constructs
Krsto Pandza - Technology Management
Innovation
StrategyTechnology
Entrepreneurship
V A L U E
Artefacts and knowledge by which human capacity is extended
Novel ways of creating and adding value
How opportunities to create value are identified, evaluated and exploited
Major intended and emergent initiatives involving utilization of resources to enhance the performance
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Learning objectives
Understand the dynamics of technology progression.
Identify technology innovation as an engine of economical growth.
Define different types of innovation and discontinuities in technology development.
Discuss the influence of technological change for competitive advantage of firms.
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Defining technology 1
Technology is artificial as opposite to natural It is created/manufactured by humans
Technology may be regarded as simply the “way things are done” It is a set of practices Relevant in the context of use
A set of processes, tools, methods, procedures and equipment to produce goods or service
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Defining technology 2
Any tool or technique, any product or process, any physical equipment or method of doing or making by which human activity is extended Enhance transformation power of humans Extend human capacity
Technology refers to the organisation of people and artefacts for acheiving specific goals
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Defining technology management Technology management addresses the
effective identification, selection, acquisition, development, exploitation and protection of technologies needed to create and sustain competitive advantage of firms and wider social wellbeing.
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Defining technology strategy
Technology strategy is the total pattern of decisions, that a firm takes to obtaining and using technology to achieve a new competitive advantage, or to sustain an existing technology-oriented competitive advantage against erosion. Uncertain technological change IP management Different mechanisms for assessing market
needs
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Defining innovation
Invention, creation of novel ideas that demand allocation of resources.
Innovation, process by which invention is transformed into products and/or services that add value to customers.
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Defining strategy (SMJ, 2007, Vol. 28, pp. 935 –
955)
….the major intended and emergent initiatives Strategy, innovation, acquisition, investment, operations,
diversification, learning, activity… …taken by managers on behalf of owners
Top, incentives, board, director, CEO, agency, ownership …involving utilization of resources
Stock, capability, assets, technology, competency, financial, product, ties, slack, knowledge
….to enhance the performance Growth, advantage, returns, decline, dominance,
…of firms Firm, business, company, corporate, multibusiness, SBU,
subsidiary …in their external environment
Industry, competition, market, enviroment, contingency, uncertainty, threats, risk
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Defining resources and capabilities
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…when firms have resorces/capabilities that are valuable, rare, inimitable, and nonsubstitutable, they can acheive sustainable competitive advantage by implementing value creating strategies that cannot be easily duplicated by competing firms.
Resources are firm-specific assets that are difficult if not impossible to imitate.
Capabilities are those combination of resources and processes that together underpin competitive advantage for a specific firm competing in a particular product/service market.
A capability is conceptualised as collectively held and action oriented knowledge that enables firms to get things done.
Dynamic capabilities are defined as the firm’s ability to integrate, build, and reconfigure internal resources and capabilities to address rapidly changing environment.
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Creative destruction and economic growth - 1
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Competitive advantage arises from a firm’s entrepreneurial ability to exploit market shocks and discontinuities.
Joseph Schumpeter used the term “creative destruction” to new sources of competitive advantages displacing the established ones.
Schumpeter considered static efficiency - allocative efficiency at a point in time - to be less important than dynamic efficiency.
Society benefits much more from competition between new products, new technologies and new forms of organization than from price competition.
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Creative destruction and economic growth - 2
Creative destruction implies that the isolating mechanisms that protect a firm’s competitive advantage will not be permanent.
The life expectancy of a competitive advantage shrinks as technology and tastes change rapidly.
During the period of quiet firms that posses superior products and technology earn economic profits
Entrepreneurs who exploit the opportunities created by the shocks enjoy economic profits during the next period of quiet
Firms are said to enter a state of hypercompetition state when competitive advantages can only be sustained for very short periods.
According to Richard D’Aveni, several industries are in this state and firms in these industries can sustain their economic profits only by continually seeking new sources of competitive advantage.
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Dimensions of innovations
Incremental
(doing what we do better)
Radical
(new to the world)
(new to the enterprise)
Component level
System level
Improvements to component
New component for existing systems
Advanced materials to improve component performance
New versions of motor car, aeroplane, TV
New generations
e.g. MP3 Vs CD
Steam power, ICT “revolution”,
Bio-technology
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Incremental Vs Radical
Incremental innovation Continuations of existing products,
methods or practices
Minor improvements made with existing methods and technology
Evolutionary as opposed to revolutionary Radical innovation
Totally new products or services
Considerable change in basic technologies and methods
Revolutionary ideas that can create new markets
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Dynamics of product and process innovation
New products offering improvements in functional characteristics, technical abilities, ease of use, or other dimensions (incremental or radical)
New techniques of producing goods or services Improve the effectiveness or efficiency of production processes. Facilitate the discovery of underlying scientific properties of technological domains
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Utterbank-Abernathy Dynamic Model of Technology Innovation
Fluid phase
Transitional phase
Specific phase
• Technological and market uncertainties
• custom design
• experiments in the market niches
• no process innovation
• Learning
• standardisation
• dominat design
• Incremental innovation
• Process innovation
• Economy of scope
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Handerson and Clark model of innovation
Changed
Unchanged
Core concepts
Incremental
innovations
Modular Innovation
Architectural Innovation
Radical Innovation
Reinforced
Overturned
Lin
kag
es b
etw
een
core
con
cep
ts
an
d c
om
pon
en
ts
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Tushman-Anderson Dynamic Model of Technology Innovation
• Technologies evolve through periods of incremental change punctuated by technological breakthroughs that eater enhance or destroy the competences of established companies
• Competence-destroying discontinuities will be initiated by new entrants
• Competence-enhancing discontinuities will be initiated by existing firms
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Tushman-Anderson Dynamic Model of Technology Innovation
A technological discontinuity will not itself become a dominant design.
First versions of the new technology do not become industry standards (despite first-mover advantage).
The highest the complexity of innovation the bigger is the influence of nontechnical factors in establishing a dominant design.
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Disruptive Technologies – What are they?
They create new markets by introducing a new kind of product or service.
The new product or service from the new technology costs less than existing product or services from the old technology.
Initially, the products perform worse than existing products when judged by the performance metrics that mainstream existing customers value.
Eventually the performance catches up and address the needs of mainstream customers.
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Disruptive Technologies - Christensen
Incumbents fail because they spend to much time listening to and meeting the needs of their existing mainstream customers who, initially, have no use for products from the disruptive technology
Measure of key performance attribute
Time
A
B
CD
Costumer demand trajectory
Company improvement trajectory
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Disruptive innovation in health
Primary care/ Nurse practitionrs
Specialist care
Self care – pharmacy, diagnosis and treatment
performance
time
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Mechanisms of disruptive technology
Disruptive innovations introduce a new value proposition: Low-end disruption: attracts low-end customers initially,
moves into more upscale markets over time as the technology improves; Examples: discount retail stores, low budged airlines,
Dell’s supply chain Overshot customers; customers who stop paying for
further improvements. New-market disruption: occur when existing products limit
the number of potential consumers. Examples: Kodak camera, Bell telephone, Sony transistor
radio, Xerox photocopier, Apple personal computer, eBay online market place.
converts previous non-customers into new customers, thereby creating a new market;
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Disruptive Technologies - Christensen
Time or engineering efforts
Perf
orm
ance
as
defined in a
pplic
ati
on A
Perf
orm
ance
as
defined in a
pplic
ati
on B
Technology 1
Technology 2
Application in market A
Application in market B
Disruptive technology:
• new market niche
• small market
• small companies
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Disruptive Technologies - Christensen
Time or engineering efforts
Technology 1
Technology 2
Application in market A
Application in market B
Niche, small market
Perf
orm
ance
as
defined in a
pplic
ati
on A
Disruptive technology takes over the larger established market New entrants
dominates
Old company playing catch-up
Perf
orm
ance
as
defined in a
pplic
ati
on B
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Cumulative adoption patterns (Examples for some media products)
Cumulative Adoption Patterns(Examples for Some Media Products)
1. Based on the number of households with the electronic device (eg, television set, DVD player, etc.), survey results on the share of the population, that indicated using a medium in a given year (eg, read newspapers, went to a movie), or estimates based on circulation or unit data
Source: Communications Industry Forecast, 2005-09
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Cumulative adoption patterns (Examples for Several Durables)
Cumulative Adoption Patterns(Examples for Several Durables)
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Organizational (management) innovation
A company ability to affect fundamental changes in its own internal way of working.
Create or alter business structures, practices and capabilities:
Lean manufacturing, total quality management,
Activity based costing, economic value added,Matrix organization, ambidextrous structures,Outsourcing, supply chain management,
strategic alliances,Corporate venturing, scenario planning,
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Business model (strategy) innovation
Change in the way business is done in terms of capturing value, create new architecture of revenues. Innovations aimed at social needs and issues,Open innovation, Internet enabled businesses.
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Open innovation paradigm
• Multiple points of entry and exit
• Not all smart people work for us
• External R&D can create significant value
• Internal R&D is needed to claim some portion of that value
• External and internal ideas as well as external or internal paths to market.
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Learning objectives
Understand appropriateness of tools for technology forecasting.
Applying: Scenario planning Technology roadmapping
Designing a technology roadmap.
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Amara’s law in technology forecasting
We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.
Over predict change
Under predict change
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Technology forecasting
The future cannot be predicted. There are many different possible alternative futures. Instead of predicting what the future will be, analysts engage in structured and thoughtful speculation about future possibilities. This helps people prepare for whatever future comes.
Successful forecasts demand for: familiarity with science relevant to technology being examined detailed knowledge of today’s related products and R&D
results market intelligence leap of imagination understanding that eliminate too radical or too conservative
estimations willingness to present and defend the resulting ideas.
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Technology forecasting
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Gather as much data as the analysis warrants Analyze the data in multiple ways Use judgement and imagination within existing
frameworks
Long-term forecasts (synthesise a broader vision)
Mid-term forecasts (projects possible pathways of development)
Near-term forecast (market research, forecasting demand for a particular product)
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Nanomaterial forecasts
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$3,000
$2,000
$1,000
$02005 2006 2007 2008 2009 2010 2011 2012 2013 2014
SALES$ billions
Nanomaterials
Nanointermediates
Nano-enabled products
Source Lux research
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Technology foresight on energy-related applications in nanoscience
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PESTEL
Krsto Pandza - Technology Management
Legal:• Competition law• Employment law• Health and safety• Product safety
Political:• Government stability• Taxation policy• Foreign trade regulations• Social welfare policies
Environmental:• Environmental protection laws• Waste disposal• Energy consumption
Economic:• Business cycles • GNP trends• Money supply • Inflation• Unemployment • Disposable income Social:
• Population demographic • Income distribution• Social mobility• Lifestyle changes • Attitudes to work and leisure• Consumerism • Safety • Levels of education
Technology:• Government spending on research• Industry focus on technological effort • New discoveries /developments • Speed of technology transfer• Rates of obsolescence
PESTEL framework
Trends Impact Uncertainty
Political
Economic
Social
Technological
Environmental
Legal
Positive, negative, neutral
Opportunities, Threats
High, medium, low
• What environmental factors are affecting the organisation?
• Which of these are the most important at the present?
• Which of these will be important in the future?
• How uncertain are these trends?
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Industry Background for pharma Post-War ‘Golden Era’ Major companies grew from National and Regional
UK- Boots, Fisons, Beechams, Glaxo, Wellcome, ICI (Zeneca) France - Roussel, Rhone-Poulenc, Sanofi Germany and Switzerland - Ciba, Sandoz, Hoescht, Roche,
E Merck USA - Merck, SKF, Squibb, BM, Pfizer, AHP
Relatively small number of truly global companies until 1980s Global companies created ‘organically’ on back of block
buster products Then in 1990s, start of Merger and Acquisition activity
Seek to increase market share, make Cost Savings More recently R&D synergies
Innovations in 20th Century
Life saving: anti-infectives (penicillins, anti-virals) and oncology products
Life sustaining: hypertension, HIV, diabetes Medicines reducing need for surgery: anti-
ulcerants, lipid lowering Quality of life: anti-depressants, asthma Vaccines: MMR, polio, influenza, cancers
Human Genome Project Nanotechnology Information Science
Recent industry challenges …..
In past five years major changes have taken place in Pharma industry environment: R&D Productivity Generics Pricing and Cost Regulatory activity Customer
expectations Social and Political
Agendas Competition and
M&A
Revenue Pharma
Pfizer
GlaxoSmithKline
sanofi-aventis
Novartis
Roche
AstraZeneca
Johnson & Johnson
Merck & Co
Wyeth
Eli Lilly
Other Companies
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Emerging industry challenges …..
In the next decade further challenges will emerge… Science and Technology Governance and Regulation Increasing need to demonstrate ‘value’ Challenge to value of IP Changing customers and expectations Increasing demand for ‘customisation’ Competition - Collaboration
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Key Technology Trends
Biotechnology - Genetics / Genomics Materials and Nanotechnology Information Technology Ethical, Legal, Societal Issues
How and where might these impact pharmaceuticals?
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Genomics – the realisation?
Genomics: Realisation
0
20
40
60
80
100
1990 1995 2000 2005 2010 2015 2020
Year
% R
ea
lisa
tio
n
Human GenomeDiagnosticsGenomic Drugs
Source: Roche: Capturing Value from Genetics and Genomics, K Lindpaintner - June 2001
Diagnostics
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Drug Delivery
“Nano Injector with Red Cells”, ©Copyright 2002 Coneyl Jay.
PESTEL example
Legal:• Legal implications of genomics
Political:• Reduced value of IP in medicine (public ownership)• Role of non-for-profit programmes• Social welfare policies
Environmental:• Patient safety • Impact of genetically modified organism • Green chemistry and biotech
Economic:• Increase in costs for governments• Funding of health• Budged deficits • Emerging and developing economies Social:
• Aging population • Patient and physician expectations• Ethical implication • Lifestyle changes • e-pharmacies
Technology:• Genomics• Biotechnology• Supply chain technology• ICT• nanotechnology
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Analysis of PASTLE framework
Factor Importance Uncertainty Ageing Population Medium – increasing health
burden None – well documented
Increasing consumer and Health Awareness
Medium – in terms of customer expectations
Low – Internet led
Increased access to information
Medium Low – development in this technology well trended
Smart Tags and Adv SCM High Low
Adv materials Yes – new products Medium
Genomics and diagnostics High Medium
MEMS, nanotech High High
New competitors Medium Low
Industry consolidation Medium Low
Green chemistry and biotech Medium Medium
Funding and pricing High High
Access to medicines High High
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Pharmaceutical Industry Present to 2020
2000 2005 2010 2015 2020S
ocie
tal
Tech
nolo
gica
lE
nvir
onm
enta
lE
cono
mic
Pol
itic
al
Ageing Population
Increasing Consumer and Health/Safety Awareness
Increased Access to Information and Communications
Smart Tags and Advanced Supply Chain Management
Genomics and DiagnosticsAdvanced Materials, Dispensing and Dosing Technologies
Funding and Pricing Pressures / Customer Model
Access to Medicines
Reduced Value of Intellectual Property
Changing Regulatory Demands
Rise of New Competitors - S Asia generics, Biotech
Further Industry Consolidation
“Green - Sustainability”
New Technologies - MEMS, nanotech, AI
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Scenario planning
When the business environment has high levels of uncertainty arising from complexity and/or rapid change it may prove impossible to develop a single view of future developments.
Scenarios are detailed and plausible views of how the business environment of a firm might develop in the future based on groupings of key environmental influences and drivers of change about which there is a high level of uncertainty.
Use of speculation and human judgement in an attempt to gain fresh insights and “bound” future uncertainties
Directed toward stretching decision makers’ thinking about their organization’s business model and its future environment, overcoming corporate blind-spots, and enhancing strategic flexibility
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Schwartz, 1991
1. Identify focal issue or decision - focus and relevance
2. Key forces in the local environment - factors for success and failure
3. Driving forces - macro-environmental forces that influence factors
4. Rank by importance and uncertainty - importance to focal issue
5. Selecting the scenario logics - define axes for scenario directions
6. Fleshing out the scenarios - include key forces
7. Implications - consider focal issue for each scenario
8. Selection of leading indicators and signposts - track reality vs. scenarios
Scen
ario
dim
ensi
on 2
Scenario dimension 1
Scenario A&
implications
Scenario B&
implications
Scenario C&
implications
Scenario D&
implications
Developing Scenarios
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Key steps in scenario planning process
Isolate the decision – identify what is the fundamental issue to be addressed
Isolate the driving forces – determine which driving forces are critical in influencing the change in the environment
Rank the driving forces by importance and uncertainty – The most critical driving forces will be those that are both very important and highly uncertain
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Key steps in scenario planning process
High
HighLow
Potential impact
Uncertainty
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Key steps in scenario planning process
Select the scenario logic – determine the two or three most important underlying questions that will make a diference in the decision. Crossing two major questions in a matrix gives four possible scenarios
Flesh out the scenarios – using the driving forces and trends, see how they affect the scenarios
Play out the implications – return to the original question and examine it in the light of the scenarios that have been built
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Select the scenario logic – a case from FutMan project
Loose
Concerted
CollectivePublic values and consumer
attitudes
Focus Europe
Sustainable Times
Global Economy
Local Standards
Individual
Inte
gra
tion
of
SD
r
ele
van
t p
olicie
s
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Scenario logic – a case pharmaceutical industry
Health funding limited
Health funding significant
Technology adoption high Technology
adoption
Good old days
My Health.com
Health.for. all
Health.net
Technology adoption limited
Fu
nd
ing
an
d p
ricin
g
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The resulting four scenarios
My.Healthcare.com – where there is adequate funding to permit technologically advanced and highly personalised medicine to become routine in major markets. Pharmaceutical companies extend their product service offering to deliver advanced and personalised treatments.
Health.Net – where funding is limited but where some personalisation of treatment is provided together with extensive use of generic products. Results in fundamental changes to product delivery model, with the emergence of new providers of treatments and service. Pharma companies become tier 1 suppliers of branded technology for others to integrate into a product.
Health.for.All – where funding and technology adoption is limited and there is increasing rejection of intellectual property protection for life saving medicines. The current business model is rejected. UN/WHO or similar drive the emergence of not-for-profit supply organisations for developing countries.
“Good old days” – where there is adequate funding but technology adoption is limited. However this scenario was not considered plausible because it is considered unlikely that high levels of funding and pricing flexibility will be available for essentially ‘older’ treatments technologies.
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Scenario 1; “my.Healthcare.com”
6:23 AM, 13 October 2019… You are feeling ill. You go over to your pC, plug your HealthCard in to the HealthPort and type in your PIN. PCHealth starts and via a simple dialog prompts for symptoms. It then runs a check on your health records and via Internet looks for similar symptoms locally. Its preliminary diagnosis is not clear, so PCHealth asks you to get a Diagnostic stick. You pull the stick from the pack, break off the end and spit on it. You then close the tube and connect it to HealthPort. Two minutes later PCHealth confirms as case of micoplasma pneumoniae infection (…must have been that last business trip), it updates your records, identifies the preferred medicine (taking account of your genotype and health records). It then sends information to your personal Physician (who will check up on you in a time difined according to illness) and to WorldPharma Co. You will take delivery of the medicine, a new treatment monitor and replacement diagnostic sticks within 4 hours. The new monitor will allow you to check the drug is performing.
Your platinum credit card is Automatically biled by WorldPharma Co.
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Technology roadmapping
Technology roadmapping represents a powerful technique for supporting technology management and planning, especially for exploring and communicating the dynamic linkages between technology, organizational capabilities, strategy and changing environment.
Technology roadmap consists of different application levels: Sector/industry Company/business (technology development to be linked with
business planning) Product Science
Technology roadmapping enables to align these analytical levels.
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The roadmap architecture and process
The roadmap architecture is composed of two key dimensions: Timeframes (typically the horizontal axis) which
may include the present, short-, medium-and long term perspectives.
Layers and sub-layers (typically the vertical axis), represented by a system-based hierarchical taxonomy which allows different levels of detail to be addressed.
Linkages (technology push, market pull). Process of developing a roadmap is more
important as the roadmap itself.
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Generic roadmap architecture
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Business environment
Business strategy
Products
Capability/technology
Resources
Time scale
Present 5 year 10 year 15 year
Political, economical, social, technological, legal, environment
Vision, aspirations, objectives, performance
Products, product generations
Technology competency, R&D capability, operational capabilities, new product development, supply chain
Financial, human
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Science driven map for cell on a chip
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Societal embedding
Application area
Integrated platform
Experimental platform
Scientific research
Time scale
Present 5 year 10 year 15 year
Regulation, new roles and responsibilities, reliability
Point of care diagnostic products, markets
Portable and with disposable chips, monitoring and diagnosing
Multianalyte research tool, demonstration model, detection possibilities
conductivity detectionMicrochip fabrication
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Specific technical challenges in the biochip sector; science-driven roadmaps
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The Future….?
2 0 0 0 2 0 0 5 2 0 1 0 2 0 1 5 2 0 2 0
Soci
etal
Soci
etal
Tec
hnol
ogic
alT
echn
olog
ical
Env
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men
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Env
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men
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nom
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Poli
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Poli
tical
A g e i n g P o p u l a t i o n
I n c r e a s i n g C o n s u m e r a n d H e a l t h A w a r e n e s s
I n c r e a s e d A c c e s s t o I n f o r m a t i o n a n d C o m m u n i c a t i o n s
S m a r t T a g s a n d A d v a n c e d S u p p l y C h a i n M a n a g e m e n t
G e n o m i c s a n d D i a g n o s t i c sA d v a n c e d M a t e r i a l s , D i s p e n s i n g a n d D o s i n g T e c h n o l o g i e s
F u n d i n g a n d P r i c i n g P r e s s u r e s
A c c e s s t o M e d i c i n e s
R e d u c e d V a l u e o f I n t e l l e c t u a l P r o p e r t y
I n c r e a s i n g R e g u l a t o r y D e m a n d s
R i s e o f N e w C o m p e t i t o r s - S A s i a g e n e r i c s , B i o t e c h
F u r t h e r I n d u s t r y C o n s o l i d a t i o n
G r e e n C h e m i s t r y a n d B i o t e c h
N e w T e c h n o l o g i e s - M E M S , n a n o t e c h , A I
Time
PerformanceSpecialist Care
Self-Care - PharmacyDiagnosis and Treatment
Most Demanding Customers
Least Demanding Customers
Performance
that customers
in main-stream
can absorbPrimary Care /Nurse Practitioners
Clayton Christensen
TechnologyAdoptionHigh
TechnologyAdoptionLimited
Healthcare FundingSignificant
Healthcare FundingLimited
MyHealth.com
Health.Net
Health.for.All
“Good Old Days”
Peter Schwartz
2 0 0 0 2 0 0 5 2 0 1 0 2 0 1 5 2 0 2 0
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I n c r e a s i n g E H SD e m a n d s
I n c r e a s i n gR e g u l a t o r y D e m a n d s
N e t e n a b l e dD i s p e n s i n gs y s t e m s
P h a r m a‘ V e n d i n g ’D i s p e n s i n g
S m a r t T a g sR F I D / A u t o - I D
C o m m s D e v i c e s
A d v a n c e de - S C M S y s t e m s
e - S C M / e - C R Ms y s t e m s
I n t e r n e t H e a l t hI n f o r m a t i o nH e a l t h W e b
M y . H e a l t h
E m e r g e n tN a n o t e c h n o l o g y ? ?
A d v a n c e dP o l y m e r s
M i n i a t u r eD i a g n o s t i c s
C u s t o m i s a t i o ni n D i s t r i b u t i o n
O n - l i n e P r i n t i n g P a c k F i n i s h i n gi n D i s t r i b u t i o n
R e a l - t i m e A r t w o r kc o n t r o l
N o v e l m e d i a /s o l v e n t s
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2 2 %< 5 %2 X2 б
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F u n d a m e n t a l C h a n g e i nV a l u e C h a i n ? -
e l i m i n a t i o n o fw h o l e s a l e r s o r
p h a r m a c i e s ?
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M a s s A c c e s st o T r e a t m e n t
Robert Phaal et al Krsto Pandza - Technology Management
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The Delphi Technique
An important tool to use to identify potential technological trends that might impact the development of new products and services It is a repetitive process. The same experts are asked the
same questions at least two times. Feedback on the previous round is provided in order to enable experts to change their estimations.
It is a structured process. The information flow is co-ordinated by researchers. There is no direct information flow among experts.
The experts give estimations, judgments or opinions. The anonymity of experts is maintained throughout the
process. The survey is designed to enable the statistical
presentation of final results.
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The Delphi Technique Major Weaknesses
Sensitive to the precision of the questions asked
Sensitive to variance in the expertise of the respondents
Validity of the technique is limited by the intervention of unexpected events that the experts do not incorporate into their analyses
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The Bass Model
A quantitative tool for forecasting the diffusion of new technology products that many companies use
Based on the size of the market, the rate of adoption by innovators and imitators, and the proportion of adopters in the previous time period
Can be modified to include a variety of factors that affect the diffusion of new technology products
Most accurate at predicting the diffusion of consumer durables
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Bass Model Limitations
Cannot use to estimate diffusion in the first year of a product’s life
Accuracy of predictions depends on the accuracy of assessments of size of the potential market
Assumes that the diffusion of a technology product depends only demand-side factors
Accuracy is much lower when competing technologies are being introduced
Further away in time from the initial adoption point the accuracy declines