1: Considering exporting > The
various environments you will encounter abroad
> The technological environment
Technology can be defined as the method
or technique for converting inputs to outputs in accomplishing
a specific task. Thus, the terms 'method' and 'technique'
refer not only to the knowledge but also to the skills
and the means for accomplishing a task. Technological innovation,
then, refers to the increase in knowledge, the improvement
in skills, or the discovery of a new or improved means
that extends people's ability to achieve a given task.
High technology has become like
a force of nature. It transforms the economy, schools,
consumer habits, the very character of modern life.
Investors pour money into it; parents urge their
children to study it; communities vie to attract
its factories; decorators adopt it as a style;
politicians push it as a panacea.
(Source : Science Digest
Technology can be classified in several ways.
For example, blueprints, machinery, equipment and other
capital goods are sometimes referred to as hard technology
while soft technology includes management know-how, finance,
marketing and administrative techniques. When a relatively
primitive technology is used in the production process,
the technology is usually referred to as labour-intensive.
A highly advanced technology, on the other hand, is generally
Changes in the technological environment
have had some of the most dramatic effects on business.
A company may be thoroughly committed to a particular type
of technology, and may have made major investments in equipment
and training only to see a new, more innovative and cost-effective
Indeed, the managing director of a multinational
organisation manufacturing heavy machinery once said that
the hardest part of his job had nothing to do with unions,
pay or products, but with whether or not to spend money
on the latest technologically improved equipment.
Computer technology has had an enormous impact
on education and health care, to name but two areas affected.
The advancements in medical technology, for example, have
contributed to longevity in many societies. In addition,
the introduction of robots in many factories has reduced
the need for labour, and the use of VCR's and microcomputers
has become commonplace in many homes and businesses.
Unfortunately, there is a negative side to
technological progress. The introduction of nuclear weapons,
for example, has made the destruction of the human race
a frightening possibility. In addition, factories using
modern technologies have polluted both air and water and
contributed to various environmental and health-related
Technology is a critical factor in economic
development. Because of the advances of international communication,
the increasing economic interdependence of nations, and
the serious scarcity of vital natural resources, the transfer
of technology has become an important preoccupation of
both industrialised and developing countries. For many
industrialised countries, the changes in the technological
environment over the last 30 years have been immense particularly
in such areas as chemicals, drugs, and electronics. It
is vital that organisations stay abreast of these changes
- not only because this will allow them to incorporate
new and innovative designs into their products, but also
because it will give them a firmer base from which to anticipate
and counteract competition from other organisations.
When the Gillette company developed a superior
stainless steel razor blade, it feared that such a superior
product might mean fewer replacements and sales. Thus,
the company decided not to market it. Instead, Gillette
sold the technology to Wilkinson, a British garden tool
manufacturer, thinking that Wilkinson would use the technology
only in the production of garden tools. When Wilkinson
Sword Blades were introduced and sold quickly, Gillette
understood the magnitude of its mistake.
The transfer of technology is essential for
attaining a high level of industrial capability and competitiveness.
Multinational corporations are playing an increasingly
important role in technology transfer because they invest
abroad to expand production, marketing and research activities.
There is also a growing consciousness amongst governments
of the need to increase technology transfer to the developing
countries to help stabilise their economic and social conditions.
In spite of the many differences in social,
political, cultural, geographic and economic conditions,
there are some common characteristics in the technological
environments of developing countries. The most common technology
transfer from industrialised to developing countries has
been in agriculture and health care. As a result of improved
health care systems, infant mortality rates have been cut
while the incidence of once common diseases such as malaria
and typhoid has been reduced in Latin America, south-east
Asia and Africa (although the incidents of the AIDS virus
has increased alarmingly). Similarly, agricultural technology
has increased agricultural productivity in Brazil, India
and elsewhere. However, in most developing countries, technology
has made little impact on the productive systems, income
distribution and living conditions of the majority of the
Technology transfer is a complex, time-consuming
and costly process, and the successful implementation of
such a process demands continuous communication and co-operation
between the parties involved. Furthermore, technology transfer
cannot be effective if it experiences conflict with the
economic and social needs of the recipient country. The
agricultural development of north-eastern Brazil, for example,
was largely financed by international banks and financial
organisations in the 1960's. Much of this region had been
inhabited by Brazilian aborigines but it was owned by a
small number of wealthy landowners. The introduction of
large-scale mechanical agricultural technology in areas
of the tropical rain forest of the Amazon has caused serious
environmental damage such as erosion of tropical topsoil
and the destruction of the natural environment of numerous
birds and animals, and has displaced a large number of
the local inhabitants of the forests.
Technology transfer may become a serious
source of conflict between donor and recipient countries.
The recipient country may feel that the donor is trying
to dominate it through technology, capital and production.
Dependence on foreign technology can be viewed as a serious
threat to economic independence. Countries that export
technology may experience different problems. For the seller
of technology, the technology transfer can result in unemployment
in the home country and future loss of technological superiority.
For example, Japan transferred modern steel production
technology to South Korea in the early 1970's. As labour
and production costs in Japan increased, the Korean steel
industry began to take over a significant portion of the
previously Japanese-controlled international market. Some
Japanese executives are now complaining that the cost of
technology transfer has been much greater than the income
received through the sale of technology.
Technology can be transferred from person
to person, industry to industry and government to government,
although the government of any country generally plays
the most important role in facilitating or impeding the
transfer process. Contacts amongst students from different
countries are also a means of technology transfer as are
journals, books, technical and professional publications,
trade magazines and product pamphlets. Furthermore, multinational
corporations play an important role in technology transfer
by transferring information and technology from the parent
company to subsidiaries in other countries, training foreign
The future development of the international
business environment depends on numerous factors, including
the political en economic environment, the development
of technology, population growth, energy availability and
natural resource depletion. It can be expected that the
gap between the rich and the poor countries will increase
and that living conditions in many poor countries will
deteriorate even more. The rich countries will be obliged
to extend technology, food and financial assistance to
the poor countries and people in the advanced countries
will be engaged to an increasing extend
(Source: N F Matsuura,