The technology used by a business could affect its competitiveness significantly. This does not mean that you have to use the latest technology. For small business in particular, the latest might not be the appropriate one to use.
For example, the latest technology could require heavy investment that the small business could not afford. It might also result in high production volumes that the small business would not be able to sell. The business might be able to do far better by using locally available labor to assemble cheaper imported components, to cite just one possibility.
One alternative often used by small businesses is innovation. Innovation could involve:
- New inventions – Products, components, processes or materials
- Reconfiguration -Existing products are improved through design changes or new products are configured with existing components
- Method changes – Existing ways of doing things are modified for achieving cost savings and/or better quality
The last two possibilities could be described as Value Engineering, which we discuss towards the end.
Examples from real world:
- Invention of a new component, the transistor, slashed the costs of a number of products
- The Personal Computer was the result of configuring existing components in a new way
- Assembly line manufacturing enabled mass production of the automobile and dramatically lowered costs
What Technology Involves
Basically, technology involves making useful products using raw materials, components and scientific knowledge. For example,
- The new material, plastics, gave rise to a whole new range of products
- The new component, microchip, enabled production of tiny devices that had more power than the huge contraptions of earlier days
- Using knowledge of how light works, many products such as cameras, microscopes, vision aids (including night vision aids) were developed
Fields like biotechnology and nanotechnology are leading us to a new dimension in our search for new and better products.
Technology for Your Small Business
You have researched the market and found a product that has excellent market potential. Using right technology you could achieve a competitive advantage through:
- Lower cost of production, or
- Offering better quality
How do you go about finding the right technology?
Patent offices are a good source for technology. Patents are fully documented, explaining the principles and full details of the practice. If you purchase a patent, you get very detailed information. Go to the Web sites of patent offices and search for patents on the product you are interested in.
Given below is a list of patent office websites in different countries:
- US Patents
- Canadian Intellectual Property Office
- UK Patents
- Australian Patent office
- New Zealand Patent office
Another source is your national research labs. Go to a search engine like Google, type ‘research lab’ into the search box and press Enter key. You would get a list of research laboratory Web sites. Click on the links to Web sites that interest you.
Go through the search results until you find labs that deal with the kind of technology you are looking for. If necessary, repeat the process with other search engines and Web directories like Yahoo. A painstaking search should help you find one suited to your needs.
You could also go to the nearest office of your government’s small business support center and meet a person dealing with technology support. The person would be able to guide you to sources for the technology you are looking for.
Technology publications like TechReview published by MIT would keep you in touch with latest developments, and also tips for commercializing technology.
Commercialization of Technology
New technologies need to be “commercialized” before they could be used in business. Commercialization would typically involve:
- Developing a marketable product using the technology
- Ensuring that the product does not violate any patent, does not cause serious environmental problems and is not hazardous to the users
- Scaling up the lab model technology to a production environment, solving any problems that arise
- Moving the product to the market and achieving high volumes
- Raising the finance necessary to do all of the above
Commercialization becomes necessary if you are in one of the following situations:
- You have acquired new technology that has not yet been tested in a production environment, or in the market.
- You have researched and developed a new technology yourself.
The technology support person at your small business support center should be able to guide you in commercializing new technology. This person might also point you to sources of government assistance for such commercialization.
You should carefully investigate how the selected technology is going to help your business. Would it help you make higher quality products at a cost that would yield a profit margin? Or would the technology enable you to reduce costs of production? In a business context, technology is useful only if it does one of these things.
Many products have features that do not provide any real value. If these features are eliminated, it might be possible to make the product at a lower cost.
Value is determined by customer preferences. If most customers do not perceive any benefit from a certain feature, that feature could be said to be redundant.
This is only a simplistic example of value engineering. In actual practice, value engineering looks not only at product features, but also at such things as methods of production, materials used to make the product, equipment and services that go into the production process and the ways of delivering the product to the customer. All these are critically examined for redundancies and possibility of lower cost substitutions.
Any changes must not affect required standards for performance, quality, reliability and safety. It is quite possible that the standards could be maintained even when lower cost alternatives are used. The exercise to identify such changes is the function of value engineering.
Value engineering looks at all the elements of existing ways of doing something and checks whether any of these can be changed to achieve lower costs or better quality. Both lower costs and better quality provide a competitive advantage to the business.