Expert: Leo Lingham - 9/28/2008

Question
1. "Generation and development of technologies is important for a country's economy."Comment.
2.a. Why is the need for technology information felt in a company? Give illustration.
 b. What are the criteria for evaluation of R&D projects in a company.

Answer
MALAMANI,
HERE  IS SOME  USEFUL  MATERIAL.
REGARDS
LEO  LINGHAM
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1. "Generation and development of technologies is important for a country's economy."Comment
When we look back at the 1990s, from the perspective of say 2008, the nature of the forces currently in train will have presumably become clearer. We may conceivably conclude from that vantage point that, at the turn of the millennium, the WORLD  economy was experiencing a once-in-a-century acceleration of innovation, which propelled forward productivity, output, corporate profits, and stock prices at a pace not seen in generations, if ever.
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On the one hand, the evidence of dramatic innovations--veritable shifts in the tectonic plates of technology--has moved far beyond mere conjecture. On the other, these extraordinary achievements continue to be bedeviled by concerns that the so-called New Economy is spurring imbalances that at some point will abruptly adjust, bringing the economic expansion, its euphoria, and wealth creation to a debilitating halt. This evening I should like to address some of the evidence and issues that pertain to these seemingly alternative scenarios.
What should be indisputable is that a number of new technologies that evolved largely from the cumulative innovations of the past half century have now begun to bring about awesome changes in the way goods and services are produced and, especially, in the way they are distributed to final users. Those innovations, particularly the Internet's rapid emergence from infancy, have spawned a ubiquity of startup firms, many of which claim to offer the chance to revolutionize and dominate large shares of the nation's production and distribution system. Capital markets, not comfortable dealing with discontinuous shifts in economic structure, are groping for sensible evaluations of these firms. The exceptional stock price volatility of most of the newer firms and, in the view of some, their outsized valuations, are indicative of the difficulties of divining from the many, the particular few of the newer technologies and operational models that will prevail in the decades ahead.
How did we arrive at such a fascinating and, to some, unsettling point in history? The process of innovation, of course, is never-ending. Yet the development of the transistor after World War II appears in retrospect to have initiated an especial wave of innovative synergies. It brought us the microprocessor, the computer, satellites, and the joining of laser and fiber-optic technologies. These, in turn, fostered by the 1990s an enormous new capacity to disseminate information. To be sure, innovation is not confined to information technologies. Impressive technical advances can be found in many corners of the economy.

But it is information technology that defines this special period. The reason is that information innovation lies at the root of productivity and economic growth. Its major contribution is to reduce the number of worker hours required to produce the nation's output. Yet, in the vibrant economic conditions that have accompanied this period of technical innovation, many more job opportunities have been created than have been lost. Indeed, our unemployment rate has fallen notably as technology has blossomed.
One result of the more-rapid pace of IT innovation has been a visible acceleration of the process of "creative destruction," a shifting of capital from failing technologies into those technologies at the cutting edge. The process of capital reallocation across the economy has been assisted by a significant unbundling of risks in capital markets made possible by the development of innovative financial products, many of which themselves owe their viability to advances in IT.
Before this revolution in information availability, most twentieth-century business decisionmaking had been hampered by wide uncertainty. Owing to the paucity of timely knowledge of customers' needs and of the location of inventories and materials flowing throughout complex production systems, businesses, as many of you well remember, required substantial programmed redundancies to function effectively.
Doubling up on materials and people was essential as backup to the inevitable misjudgments of the real-time state of play in a company. Decisions were made from information that was hours, days, or even weeks old. Accordingly, production planning required costly inventory safety stocks and backup teams of people to respond to the unanticipated and the misjudged.
Large remnants of information void, of course, still persist, and forecasts of future events on which all business decisions ultimately depend are still unavoidably uncertain. But the remarkable surge in the availability of more timely information in recent years has enabled business management to remove large swaths of inventory safety stocks and worker redundancies.
Information access in real time--resulting, for example, from such processes as electronic data interface between the retail checkout counter and the factory floor or the satellite location of trucks--has fostered marked reductions in delivery lead times and the related workhours required for the production and delivery of all sorts of goods, from books to capital equipment.
The dramatic decline in the lead times for the delivery of capital equipment has made a particularly significant contribution to the favorable economic environment of the past decade. When lead times for equipment are long, the equipment must have multiple capabilities to deal with the plausible range of business needs likely to occur after these capital goods are delivered and installed.
With lead times foreshortened, many of the redundancies built into capital equipment to ensure that it could meet all plausible alternatives of a defined distant future could be sharply reduced. That means fewer goods and worker hours are caught up in activities that, while perceived as necessary insurance to sustain valued output, in the end produce nothing of value.
Those intermediate production and distribution activities, so essential when information and quality control were poor, are being reduced in scale and, in some cases, eliminated. These trends may well gather speed and force as the Internet alters relationships of businesses to their suppliers and their customers.
The process of innovation goes beyond the factory floor or distribution channels. Design times and costs have fallen dramatically as computer modeling has eliminated the need, for example, of the large staff of architectural specification-drafters previously required for building projects. Medical diagnoses are more thorough, accurate, and far faster, with access to heretofore unavailable information. Treatment is accordingly hastened, and hours of procedures eliminated.
Indeed, these developments emphasize the essence of information technology--the expansion of knowledge and its obverse, the reduction in uncertainty. As a consequence, risk premiums that were associated with all forms of business activities have declined.
Because the future is never entirely predictable, risk in any business action committed to the future--that is, virtually all business actions--can be reduced but never eliminated. Information technologies, by improving our real-time understanding of production processes and of the vagaries of consumer demand, are reducing the degree of uncertainty and, hence, risk. In short, information technology raises output per hour in the total economy principally by reducing hours worked on activities needed to guard productive processes against the unknown and the unanticipated. Narrowing the uncertainties reduces the number of hours required to maintain any given level of production readiness.
In economic terms, we are reducing risk premiums and variances throughout the economic decision tree that drives the production of our goods and services. This has meant that employment of scarce resources to deal with heightened risk premiums has been reduced.
The relationship between businesses and consumers already is being changed by the expanding opportunities for e-commerce. The forces unleashed by the Internet are almost surely to be even more potent within and among businesses, where uncertainties are being reduced by improving the quantity, the reliability, and the timeliness of information. This is the case in many recent initiatives, especially among our more seasoned companies, to consolidate and rationalize their supply chains using the Internet.
Not all technologies, information or otherwise, however, increase productivity--that is, output per hour--by reducing the inputs necessary to produce existing products. Some new technologies bring about new goods and services with above average value added per workhour. The dramatic advances in biotechnology, for example, are significantly increasing a broad range of productivity-expanding efforts in areas from agriculture to medicine.
Indeed, in our dynamic labor markets, the resources made redundant by better information, as  indicated earlier, are being drawn to the newer activities and newer products, many never before contemplated or available. The personal computer, with ever-widening applications in homes and businesses, is one. So are the fax and the cell phone. The newer biotech innovations are most especially of this type, particularly the remarkable breadth of medical and pharmacological product development.
At the end of the day, however, the newer technologies obviously can increase outputs or reduce inputs and, hence, increase productivity only if they are embodied in capital investment. Capital investment here is defined in the broadest sense as any outlay that enhances future productive capabilities and, consequently, capital asset values.
But for capital investments to be made, the prospective rate of return on their implementation must exceed the cost of capital. Gains in productivity and capacity per real dollar invested clearly rose materially in the 1990s, while the increase in equity values, reflecting that higher earnings potential, reduced the cost of capital.
In particular, technological synergies appear to be engendering an ever-widening array of prospective new capital investments that offer profitable cost displacement. In a consolidated sense, reduced cost generally means reduced labor cost or, in productivity terms, fewer hours worked per unit of output. These increased real rates of return on investment and consequent improved productivity are clearly most evident among the relatively small segment of our economy that produces high-tech equipment. But the newer technologies are spreading to firms not conventionally thought of as high tech.1
It would be an exaggeration to imply that whenever a cost increase emerges on the horizon, there is a capital investment that is available to quell it. Yet the veritable explosion of high-tech equipment and software spending that has raised the growth of the capital stock dramatically over the past five years could hardly have occurred without a large increase in the pool of profitable projects becoming available to business planners. As rising productivity growth in the high-tech sector since 1995 has resulted in an acceleration of price declines for equipment embodying the newer technologies, investment in this equipment by firms in a wide variety of industries has expanded sharply.
In the event, overall equipment and capitalized software outlays as a percentage of GDP in nominal dollars have reached their highest level in post-World War II history.
To be sure, there is also a virtuous capital investment cycle at play here. A whole new set of profitable investments raises productivity, which for a time raises profits--spurring further investment and consumption. At the same time, faster productivity growth keeps a lid on unit costs and prices. Firms hesitate to raise prices for fear that their competitors will be able, with lower costs from new investments, to wrest market share from them.
Indeed, the increasing availability of labor-displacing equipment and software, at declining prices and improving delivery lead times, is arguably at the root of the loss of business pricing power in recent years. To be sure, other inflation-suppressing forces have been at work as well.

Of course, Europe and Japan have participated in this recent wave of invention and innovation and have full access to the newer technologies. However, they arguably have been slower to apply them. The relatively inflexible and, hence, more costly labor markets of these economies appear to be an important factor. The high rates of return offered by the newer Gtechnologies are largely the result of labor cost displacement, and because it is more costly to dismiss workers in Europe and Japan, the rate of return on the same equipment is correspondingly less there than in the United States. Here, labor displacement is more readily countenanced both by law and by culture, facilitating the adoption of technology that raises standards of living over time.
There, of course, has been a substantial amount of labor-displacing investment in Europe to obviate expensive increased employment as their economies grow. But it is not clear to what extent such investment has been directed at reducing existing levels of employment. It should always be remembered that in economies where dismissing a worker is expensive, hiring one will also be perceived to be expensive.
An ability to reorganize production and distribution processes is essential to take advantage of newer technologies. Indeed, the combination of a marked surge in mergers and acquisitions, and especially the vast increase in strategic alliances, including across borders, is dramatically altering business structures to conform to the imperatives of the newer technologies.2

Nonetheless, this seemingly beneficial state of affairs is not without its own set of potential challenges. Productivity-driven supply growth has, by raising long-term profit expectations, engendered a huge gain in equity prices. Through the so-called "wealth effect," these gains have tended to foster increases in aggregate demand beyond the increases in supply. It is this imbalance between growth of supply and growth of demand that contains the potential seeds of rising inflationary and financial pressures that could undermine the current expansion.
Higher productivity growth must show up as increases in real incomes of employees, as profit, or more generally as both. Unless the propensity to spend out of real income falls, private consumption and investment growth will rise, as indeed it must, since over time demand and supply must balance. (I leave the effect of fiscal policy for later.) If this was all that happened, accelerating productivity would be wholly benign and beneficial.
But in recent years, largely as a result of the appreciating values of ownership claims on the capital stock, themselves a consequence, at least in part, of accelerating productivity, the net worth of households has expanded dramatically, relative to income. This has spurred private consumption to rise even faster than the incomes engendered by the productivity-driven rise in output growth. Moreover, the fall in the cost of equity capital corresponding to higher share prices, coupled with enhanced potential rates of return, has spurred private capital investment. There is a wide range of estimates of how much added growth the rise in equity prices has engendered, but they center around 1 percentage point of the somewhat more than 4 percentage point annual growth rate of GDP since late 1996.
Such overall extra domestic demand can be met only with increased imports (net of exports) or with new domestic output produced by employing additional workers. The latter can come only from drawing down the pool of those seeking work or from increasing net immigration.
Thus, the impetus to spending from the wealth effect by its very nature clearly cannot persist indefinitely. In part, it adds to the demand for goods and services before the corresponding increase in output fully materializes. It is, in effect, increased purchasing from future income, financed currently by greater borrowing or reduced accumulation of assets.
If capital gains had no evident effect on consumption or investment, their existence would have no influence on output or employment either. Increased equity claims would merely match the increased market value of productive assets, affecting only balance sheets, not flows of goods and services, not supply or demand, and not labor markets.
But this is patently not the case. Increasing perceptions of wealth have clearly added to consumption and driven down the amount of saving out of current income and spurred capital investment.
To be sure, increases in wages in excess of productivity growth may not be inflationary, and destructive of economic growth, if offset by decreases in other costs or declining profit margins. A protracted decline in margins, however, is a recipe for recession. Thus, if our objective of maximum sustainable economic growth is to be achieved, the pool of available workers cannot shrink indefinitely.
We cannot predict with any assurance how long a growing wealth effect--more formally, a rise in the ratio of household net worth to income--will persist, nor do we suspect can anyone else. A diminution of the wealth effect, I should add, does not mean that prices of assets cannot keep rising, only that they rise no more than income.
A critical factor in how the rising wealth effect and its ultimate limitation will play out in the market place and the economy is the state of government, especially federal, finances.
There are many ways to address the all too real human problems that are the inevitable consequences of accelerating change. Restraining competition, domestic or international, to suppress competitive turmoil is not one of them. That would be profoundly counterproductive to rising standards of living.
We are in a period of dramatic gains in innovation and technical change that challenge all of us, as owners of capital, as suppliers of labor, as voters and policymakers. How well policy can be fashioned to allow the private sector to maximize the benefits of innovations that we currently enjoy, and to contain the imbalances they create, will shape the economic configuration of the first part of the new century.

FROM  THE ABOVE  ANALYSIS,  IT  IS VERY  CLEAR  THAT,
-the  technological  innovations   have  created  jobs/ wealth,
-the  jobs/  wealth  have created  improved  consumptions.
-the  improved  consumptions  improved  the  lifestyle  of  the people,
-which  in  turn  demanded  more  innovations   to  satisfy   the  expectations of the  people.
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What is Technology?
The term technology holds a very vast meaning and concept, which varies according to the use it is being put to. It involves the usage of tools which affects and controls the environment, and the ability to adapt to it.
Technology sometimes is also referred to the materials and objects which are used by the humanity for their daily purposes, such as the machines, utensils, which include the methods of organization.
Technology is so widespread, and its use is so vast that we cannot restrict it to any one particular field and its association in the improvement and development of any specific sector. Starting from the sciences, to the sports, peace and historical research technology has been the source of constant development and built up of the modern world.
Technology has greatly influenced the society and its lifestyle, it has not only been a source of ease and development of the world's economy due to latest advancements but it has also given way to the rise of a leisure class in this world.
Technology has also been a controversial point especially in the latest modern days, and advancements in the scientific world. The use of technology in wars, which has promoted the inventions of the most deadly arms and ammunitions, is a threat to man himself.
Technology also has some negative effects on the society and its surroundings, because technology gives rise to the by-products during the process of its use, the term pollution has risen which not only harms the nature, but also humans up to a large extent.
There have been various philosophical debates over the use of technology, and its advantages, and almost every time technology has been proved as a milestone for our success today.
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Importance of Technology

The use of technology in various fields has been so successful and beneficial for us to reach the standards we have in this modern world that it is difficult to summarize the importance of technology, which is never ending.
The importance of technology is seen and enjoyed in every phase of our life these days. When we talk on the phone, or internet, it feels very normal to us because we are in a situation where the blessings of technology are overwhelming. Communication was never so easy, and on our finger tips ever. The printing press, telephone, internet are all some of the latest technologies which have lessened the barrier of location for people in different parts of the world.
Technology has gone as far as even saving lives of the impossible cases of medical problems. These days hospitals and medical health care centers are using such complicated machineries that portray the advancement of the technological sector in this world. It is only because of the technology that lives are being saved every time.
The technological powers have now lead the people to research, and predict the natural disasters that could hit the globe causing life threatening experiences. Its importance is so widespread not only in our daily lives but also the major world issues that technology should be the most encouraged scientific education in the coming years.
The major advancement in technology is because of the increased scientific research these days. Science has been the pillar of technology and therefore it is considered to be the most looked upon subject in the modern world due to its technological success.
Therefore it is also a major benefit for the upcoming generations to continue with the hold of the most developed technological field going on these days.
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Impact of Technology in our daily lives

The basic lifestyle in every aspect of our daily lives, the kind of housings, our transport, fashion and entertainment all depend on technology. If we say, that it is time that the world has reached the pinnacle of advancement in these fields, it is worth mentioning that the only reason behind is the development in technology. Nothing has actually remained the same since the impact of technology has taken over our lives. It has been much better, easier and quicker. After all when was the last time someone took the headache of climbing up the stairs of a ten floor building, when the technology has presented us with the modern lift services, this is just one ordinary example of our everyday activities.
These days it is a matter of hours to travel from one part to other around the globe which was a fatal traveling attempt of years in the past. The food once stored over a block of ice for moderate temperatures, is left conveniently in refrigerators and freezers. The traveling which was done in days and weeks in the past, now only takes hours.
The inventions of computers have been a breakthrough in the field of technology. Since then all sorts of entertainment and work has started taking place over the computer and the internet. Gone are the days where we had to get bored and wait at home to be entertained only after leaving our house. Today we can sit on the couch with our laptop, and spend time on any of our interests over the internet.
Technology has basically changed the meaning of life and its struggle; comparatively every activity we indulge in is far more simplified than it was thousands of years ago.
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Importance of Technology in education

Technological achievements in the modern world are not only the convenience for the people around the globe, but also an incentive for the younger generations to review and develop their own thinking and ideas to advance the technology even further.
It is very important that every education, may it be from the lower primary to the PhD level should all include the trace of technology in the process according to the level most suitable.
One of the basic technological educations provided to students from the early primary stages is that of the computer sciences, which is in fact the soul of every other technology in the world. Some universities include the theoretical study of the computation and analyzing techniques and then promoting them to also practically understand their research and ideas. Computer programming is another basic level of teaching in every academic institution, so that the new generation can live up to the highly demanding technological world.
Even in any general education class, or activity the use of the technology is highly encouraged for a better understanding and wider approach of the students from their very initial learning years. The implementation of slideshows, computer research, and the involvement of latest gadgets and devices in the science subjects prepares the students for their upcoming challenge of living up to the expectations of the modern world solely dependant on technology.
Gone are the days when even the simplest data was recorded in a register manually in any business firm, may it be a multinational company or a small shop. The data is now entered in the computer which automatically sums up the total to give the bill. With this kind of lifestyle, if the children are not exposed to the technologies and their use, the generation will lag in the coming years and not be able to cope up and even help the promotion of technology brought this far by the modern world.
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Technology in Sports

There is no such field in our daily lives, which has been left unimproved by the modern technological achievements.
Even the games and sports have been so developed now that it is totally incomparable to the ways and techniques used in the sports originally. Technology has actually reshaped the sports in this modern world.
Most importantly, the sports are now played in huge specially built stadiums as per the requirements of the sports, sometimes in centrally air-conditioned environment. There are now millions of spectators gathered at the same place with specially arranged seating arrangements without any chaos or destruction. The stadium also has huge scoreboards working under digital technology, with the automatic score updates. The modern cameras are fixed in the stadium which has lead to the ability of viewing the replays and thus deciding on the perfect decision; this has not only improved the standard of the sports but has also brought about fairness to the game. This is the modern day technology.
Technology has helped in improving the equipments of all kinds of sports to a very large extent. This has been the direct consequence of the sports being very competitive and thus the urge for better equipments. Originally the randomly chosen tress barks for the cricket match are now replaced as the properly constructed bats, with a comfortable rubber covered handles. The same is the case with games like Golf, Soccer, and Hockey etc.
The proper protection accessories are now worn by the players for their individual safety.
As technology has lead to the most professional medical practices, the knowledge of the human body has deepened. This has lead to the instructions for the athletes for a proper balanced nutritional diet for their best performance.
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2.a. Why is the need for technology information felt in a company? Give illustration.
TECHNOLOGY  INFORMATION   means  information about
the  various  technologies  available  for  the  company  to use.  The  company
needs  the  information  for-- technology  assessment  and  technology  procurement.

TECHNOLOGY    ASSESSMENT  MEANS
an unbiased review of an organization's technology needs. A comprehensive, independent assessment --- the first step in development of a technology plan.
IN OTHER  WORDS,  THE   ASSESSMENT  ANSWERS  THE  FOLLOWING  QUESTIONS.
• Are you comfortable your current technology investments are in line with your business goals and objectives?
• Does your current technology deliver clear bottom-line benefits for your company?
• Are you confident that you can build a business case to evaluate new technology and deploy it in your business?
• Are the benefits of  THE  TECHNOLGY   in your business easily quantifiable when compared to cost?

Technology Assessment will
thoroughly evaluate the strengths and weaknesses of the current  technology  infrastructure and processes. It will
also examine key aspects of how technology is used in your organization. This assessment is a
great way to gain insight into how your the  current  technology  is functioning, and to gain perspective on potential
profitability benefits of implementing certain new technology solutions in your business.
Then plan the most effective solution to address  specific business issues, developing a business
case and creating an implementation strategy to achieve the desired results and ROI.
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THIS  TECHNOLOGY   ASSESSMENT  IS  VITAL  FOR  ALL BUSINESSES,
ALL  BIG, MEDIUM   AS  WELL  AS  SMALL ONES.

THE  ASSESSMENT  PROVIDES  THE  ROADMAP  FOR
-discovering  a  suitable/ appropriate  technology  for  the  business.
-PROCURE  THE  RIGHT  BLEND  OF  TECHNOLOGY.
-able  to  align  with  the  business  goals
-able  to  line  w.ith  the  business  objectives.
-provide  the  right  infrastructure.
-create  the  right  implementation  strategy
-help the  company  stay  competitive  in  the  market
-help  the  company  develop a  productive  culture.
-help the  company's marketing  to  use  the  technology  factor  in  their  program.
-finally  help  to  improve  the  market  share / sales.
-which  means  more  profit / return  on  investment.
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b. What are the criteria for evaluation of R&D projects in a company.

1.R&D  PROJECT  LENGTH.[TIME  PLAN]
2.MANPOWER  REQUIREMENTS.
3.MILESTONES.
4.DELIVERABLES
5.BUDGET
6.FINANCING  PLAN
7.The evaluation and selection process is based in the following main criteria:
Scientific merit and originality, methods and expected results;
Scientific merit of the research team and its qualifications for the particular project;
Feasibility, work program and budgetary adequacy.
8.The application of the evaluation criteria takes into account, among others:
The results of the same team obtained in previous projects and its relation to the funding received;
Internationally referenced scientific production;
Non juxtaposition of objectives with respect to other ongoing projects, irrespective of funding source, involving the same team members;
Research opportunities for young researchers;
Budget restraint with respect to the proposed activities and other funding available to team members
updating and/or upgrading computing equipment, and
other justifiable expenditures.

9.CUSTOMER / MARKET  PERSPECTIVE   MEASURES.

10.FINANCIAL  PERSPECTIVE  MEASURES.

11.INNOVATION  PERSPECTIVE  MEASURES.

12.INTERNAL  BUSINESS  PERSPECTIVE  MEASURES.

13.PROBABILITY  OF   SUCCESS.

14.PATENTABILITY.

15.PROFITABLITY  IMPACT  ON  THE  BUSINESS.
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