Chapter 8: The technological framework

Question 1

Technology Refers too..

Answer 1

refers to the know-how or pool of ideas or knowledge available to society.

Question 2

Technological advancement comprises of..

Answer 2

comprises of new knowledge or additions to the pool of knowledge that can change how businesses behave.

Question 3

Technological change can refer to..

Answer 3

can refer to groundbreaking advances in knowledge or simply minor modifications to products and processes

Question 4

The waves of innovation

Answer 4

• 1 – Industrial revolution – machinery
• 2 – Steam power to drive machines in production of manufactured goods
• 3 – Expansion of chemical industry, increased communication with telephones
• 4 – Oil and application of electricity to industrial processes
• 5 – Second half of 20th century – rapid development in electronics, communications, pharmaceuticals, biotechnology

Question 5

Information and Communications Technology (ICT)

Answer 5

• Encompasses all forms of technology used to create, store, exchange and use information in its various forms
• Machines – computers, telephone exchanges, robots, satellites
• Digitalization is breaking down barriers between different forms of media

Question 6

Web 2.0

Answer 6

• Creates a global system that makes it easier for B2B and B2C interactions
• Can use Web 2.0 to communicate with employees and invite customers to rate products and provide recommendations
• Social media gives insight into how to position products, create new products and decide on pricing strategies

Question 7

The cloud

Answer 7

• Allows business to use software on the internet
• Company data can be stored on cloud
• Reduced costs needed to spend on IT personnel and infrastructure
• Disadvantage – very dependent on it, negative consequences if it is hacked

Question 8

Innovation

Answer 8

• Who innovates? The medium to high technology sectors account for most R&D and contribute to large shares of sales of new and improved products
• What motivates businesses to innovate?
  o Intensity of competition – increasing competition from emerging markets, globalization, reduction in barriers
  o Customer/suppliers
  o Government policy – policies to remove barriers, can cut costs associated with innovation
• Opportunities: New goods/services, freezing out competitors, increase productivity, reduce costs
• Threats: Not good for firms who cannot manage change effectively, creative destruction – when firms are not prepared for new technology that will lead to them going out of business
• Protecting technology
  o Methods: patents, designs, trademarks, copyright
  o Problems: cost, multiple applications, differing protection periods