TECHNOLOGY ,INNOVATION AND KNOWLEDGE ECONOMY

What is technological innovation?

Technological innovation
OECD: A technological product innovation is the
implementation/commercialization of product with improved performance
characteristics such as to deliver objectively new or improved services to the
consumers.
A technological process innovation is the implementation/adoption of new or
significantly improved production or delivery methods. It may involve changes in
equipment, human resources, Working methods or a combination of these.
According national knowledge commission of india,innovation is defined as a
process by which varying degree of measurable value enhancement is planned
and achieved ,in any commercial activity. This process may be a breakthrough or
incremental, and it may occur systematically or sporadically in a company; it
may be achieved by :
1. Introducing new or improved goods and services and/or
2. Introducing new or improved operational processes and/or
3. Implementing new or improved organisational/ managerial processes.
The most notable dimensions of technological innovations are:

Radical innovations and incremental innovation( new or old product or

process)
Product innovations and process innovations

Technological innovation is just form of innovation. Innovation may take place in

any other functional area of management such as marketing innovation, financial
innovation and organizational innovation, among others.
Technological innovation has been assuming increasing importance as means of
competition between nations across world. This is because it can induce growth
to individual firm at micro level and give new direction to industry growth at
macro level.
Uses of technological innovation

Increase productivity and national competitiveness

Increase economic growth

What factors determine technological innovation?

Demand pull i.e market demand(what customer needs)

Technology push(accordingly innovate)

Technological Innovation in SMEs

What are the pre-requisites for SMEs innovations? How do innovations benefit
SMEs?
External support for SMEs innovation are pre-requisite. External support can
emerge from vertical linkages or horizontal linkages. In general only small
fraction of SMEs have technical managerial and financial resources, employee
skills and knowledge and patent issues also reduce their growth. To overcome
this internal constraints , external support would need.
Vertical linkages refer to suppliers and customers . customers means large
firms(MNCs).
Which provide scope for inter-firm linkages-linkages between SMEs and large
firms.
Horizontal linkages are government institutions or research institutions.
Importance of SMEs innovation

Cost reduction
Quality improvement
Product improvement
New product development
Internalization and ultimately,leading to sales growth.

Indian SMEs

India is second largest and diversified base next to china in the global
economy today.
It generates large employment and exports.

What should be done to improve SMEs sector?

Constant surveys and take necessary steps

Champion innovators from SMEs sector should be identified from
different regions and enable them to periodically communicate their
achievements to other SME entrepreneurs.
Vertical and horizontal linkages should be promoted.
Engineering students projects should be linked to local SMe technical
problems towards ascertaining solutions.

Yojana august issue 2014: aarticle: Innovation and globalization