How Emerging Technologies Can Affect an Industry - Case Study Example

Cover Page Introduction The significance of emerging technologies cannot be underrated with modern technological innovations driving business trade in almost all sectors from health, entertainment, military, communications, agricultural, and manufacturing industries radically affected by innovative tools that have simplified and opened new digitised avenues. Modern technological innovations have allowed firms like Google, Microsoft, Amazon and eBay to employ technology as their core competency that employs negligible traditional tangible merchandise that conventionally undertake the usual production processing. This study therefore seeks to explore the various factors affecting the spread of emerging technology-based firms within the current global economic climate. The study will nevertheless focus on the changes within telecommunications sector which are quite significant amongst other emerging technologies whereby the traditional phone companies were definitely dislodged by emergent firms riding on fresh innovative gadgets that are able to integrate the latest features while being relatively inexpensive compared to the conventional sets. Definition The Mack Center for Technological Innovation at the Wharton School describes emerging technology as ‘a science-based innovation with the potential to create a new industry or transform an existing industry’ (Mack Center, 2010). These include sole inventions like fibre-optics or series of innovations that assemble or create hi-tech structures like the internet. Although new technologies emerge as amazingly fresh changes, they are nonetheless the product of many years of research by scientists who labour to master the products. Paradoxically, although they may later be unequivocally praised, these fresh radical technologies are sometimes pessimistically viewed with most investors shunning them as too futuristic and unworkable. Wireless technology and digital photography are some of the fresh innovations that were initially viewed with widespread scepticism. To finally introduce these fresh technologies in the market, the Mack Center outlines three phases that they must undergo. These include: scientific progress or penetration, procedural execution (as well as appraisal), and business introduction. The unearthing of giant magnetoresistance (GMR) in the 1980s has yet to be fully realised despite the huge potential in revolutionising the computer hardware components like the hard disk and memory cards in the high precision nanotechnology or miniaturization based science now known as spintronics (Frost & Sullivan, 2005). Figure 1 Source: Mark Center (2010) Competitive Advantage through Emerging Technologies Innovative technologies have variously been acknowledged as offering firms a competitive advantage in marketing their products over key rivals (Thomond and Lettice, 2002). In the health sector, new emerging technologies have radically changed the sector or industry. These innovative technologies comprise of all kinds of digitisation, monitoring devices for individuals and appliances, prescription delivery procedures, patient tracking methods, progress in biotechnology, nanotechnology, and perioperative schemes that at present are still unproven (Catalano and Fickenscher, 2007). Some new technologies have thus been known to radically tilt the business environment through emerging innovations that render the previously dominant technology absolute. Examples include: sailing ships and air transport; floppy disks vis-à-vis CDs/DVDs; minicomputers and mainframes; photo films in relation to digital photography; landlines in comparison with mobile telephony etc. Consequently, there emerged the concept of disruptive technologies introduced by Christensen (1995) In Thomond and Lettice (2002) whereby radical advances emerges by generating fresh simpler technologies that radically disrupts the prevailing market environment. The key to enhanced business sector alignment with emerging technologies is to constantly expend on safety measures in addition to precautionary and client service improvements. Emerging fresh technologies are typified by e-commerce which is described by Andam (2005) as the conversion of a firm’s procedures to convey extra client value during the application of technologies, values and computing concepts in the fresh trade environment. In this regard, the integration of information and communications technology (ICT) in business has altered trade among firms in addition to transactions involving their clients. The application of ICT in business has also enhanced their competence, greater client connection, and allowed collective modifications, besides leading to abating expenditures. Contemporary businesses have thus integrated the swift transformations in ICT as the information and communication segment changes necessitate modern organisations to incorporate this processes, which have not only are technically superior, but also client- focussed. The significance of a structure based ICT platform to propagate business services has thus seen the emergence of Web 2.0 an e-Information scheme that uses innovative technologies in client focussed policy essentially altering the manner services and other business are done. The fundamental inspiration of (Web 2.0 technologies) is exploiting shared aptitude of diverse experts or adept to generate higher or complex systems [figure 2]. Figure 2 Nevertheless, according to IT giant IBM, emerging divergent technological changes elicit the need for IT uniformity and control, which inevitably may appreciably influence trade competence and escalate overheads (Ibm.com, 2010). There is therefore a need to align innovative fresh technologies with the business objectives of the industry by having the requisite relevant innovations congruent. The capacity to embrace changes in contemporary business environment is their critical for continued existence and development. Negative/Disruptive Impacts In the rush to launch the products, several negative factors are overlooked. These basic apparent concerns are frequently ignored or forsaken in the undue focus of the firm on the fast-moving, severe, tough, facts-focussed environment of the emerging technology business. These firms are predisposed to be job-oriented and are resolute on attaining the maximum forthcoming rewards in their expansion progression, instead of a holistic attitude (Miller and Pekoe, 2010). New firms should therefore concentrate on their competencies rather than being overly ambitious and hence failing in reaping from their patented technology. The reverse side of the enthusiasm that greets emerging technologies is when the fresh innovations seem to generate more problems than solutions. This is where they disrupt or interrupt the flow of inexpensive products by introducing fresh costly products. Other ways are when the technology inversely leads to loss of jobs, enhances poverty, and disrupt food flows among other [figure 3]. Emerging technologies have also been accused of perpetuating global income and poverty inequalities as skill-biased technological renovation takes place, IT jobs are relocated to other centres globally and the impact of biotechnology although intensifying food productions has adverse effects on peasant farmers in developing countries (Cozzens et al. 2006) Figure 3 Adapted from Christensen (2003) The modern global financial structure has progressed into a borderless worldwide business scheme, largely fuelled by hi-tech innovation in electronic commerce (E-commerce) and subsequent vastly developed internet technologies. Nevertheless, Miller and Pekoe (2010) assert that nascent firms that ride on the back of emerging technologies tend to be brittle in the face of the highly competitive market environment since they are plagued by inexperience and low financial backing. Consequently, Andam (2005) asserts that e-commerce has levelled the playing field in business trade for various merchandise and services such that with practised cautious tactics, tiny and average size firms are capable of vying capably with the big and more reputable corporations. According to a Forrester Research approximation, global e-commerce business in 2008 was at $204 billion with an anticipated expansion of up to $335 billion by 2012. In the US which is the worldwide leader in online transactions, E-commerce made up over six percent of all commercial trade (Barke et al, 2008). National boundaries are thus fast weakening as the internet interconnects the global business traders allowing mercantile sale admittance ubiquitously internationally. In the UK, just about 90 percent of companies presently use it, even as one-fifth contends they can hardly endure without it (Chaffey, 2009). Phone Communication Systems and Emerging Technologies The onset of innovative telephony gadgets was initially heralded by cordless phone sets that applied wireless tecgnology for short voice transformation across the room and later in automobiles. Although this were breakthrough technical features that still applied analog signals, the major phone corporations were not overly concerned gradually integrating this innovations, however the changes into digital signals heralded the first real threat to the industry (McInturff, 2010). Neverthelss the phone companies were slow to embrace the changes as even the new innovations like fax machines and later internet still used the same phone technology. With time satelite technology made digital contact real as mobile phone gadgets though like new technologies very expensive started edging out the old analog machines (MIT, 2010). The new milinium was the rallying call for numerous emerging technologies from nanotechnologies to the semiconductor industries among others that finally crowned the digital revolution in the 21st century and the death knell for the conventional phone companies which thereafter struggled to sustain their now fragile phone market (Cozzens et al. 2006). Firms like Western Union, Telkom, IT & T were now replaced by mobile phone producing giants like Finnish firm Nokia, Motorolla and Sumsung as the market for the tiny gadgets exploded with innovations driving freshers flashier and snaggy phones innovations. The new communications quickly integrated the other emmerging technologies like mobile internet browsing, mobile marketing, short message services (SMSs), digital photography and now online social marketing forums to effectively drive the older bussiness into the doldrums. Mobile Commerce Analysis A survey by Cisco Internet Business Solutions Group (IBSG) in 2008 indicated how cellphones have nowadays emerged as a key marketing conduit for both digital and online dealings. This embrace either via the short messaging service (SMS) or the currently smart compacted internet screening via their mobile phones (See Figure: 3) (Barke, 2008). Figure 4 Source: Cisco.com According to the Cisco IBSG appraisal, there are thrice as many mobile-phone consumers (3.3 billion) as there are internet customers (1.3 billion) globally. Mobile phone technology has enabled the use of SMS, internet interface and other services to advance e-commerce to the next level. Thus phone communication innovations can be described as some of the most disruptive emerging technologies in the new millennium having surpassed and totally disseminated the traditional telephone networks. This has meant the industry which was slow to integrate the new inventions has not only lost its market but being rendered insolvent due to the relative easier usage of the new inventions, more capacities and ability to integrate other emerging technologies at much lower cost. Emerging Technologies and Modern Business Strategies Despite the potential of biotechnology firms introducing high-end evolving innovations, the firms have not been very successful in business, with there performance being very poor when contrasted to the other sub-sectors like pharmaceuticals which has flourished on the back of innovative products. Conversely, biotech firms have declined in value at the NASDAQ index by 68 percent while the pharmaceuticals only lost 16 percent in 2008 (Wahba, 2008). This trend has prevailed largely due to poor public sentiment against their products constantly being aligned with human cloning techniques despite the obvious non-human element and potential advantages to the human race. Thus biotechnology can be termed in some quarters as disruptive technology as elucidated. To survive in the market, biotechnology firms have been forced to initiate mergers with other established corporations since their technology is not fully embraced by investors as an enduring venture (Feldman, 2003). Nevertheless, Papadopoulos (2008) still asserts that for those biotechnology companies intending to launch their company in the public equity markets by attracting the large investors, a minimum of $300 million is mandatory to induce genuine interest from the big corporate firms. However other technologically reliant firms have largely being able to successfully use the equity market to raise funds for greater expansion. These include the IT based firms, Apple and Google that entered the market after only a few years in existence but managed to raise huge capital. Notwithstanding that financial analysts offer a depressing forecast for biotech firms initiating initial public offers (IPO’s) with a common consensus that financiers have a penchant to undertake investments mostly on the established fully developed firms rather than new deals, Pukthuanthong conversely states that past data suggest that between 1980 and 2000, biotech opening day market capitalization per IPO firm grew by 275% or $163 million to $612 million with albeit a modification on price increases (Pukthuanthong, 2005). This growth is mainly owing to the augmentation on research and development in the companies, intensifying at an annual rate of $1.79 million in 1980 to $4.28 million yearly in 2000. The pessimistic view of the companies’ solvency is due to the use of US accounting rules or GAAP which necessitate the delayed costs to be integrated in the income statements instead of being amortised into outflow over time. Subsequently, Osterwalder and Pigneur (2002) have proposed a broad e-business model encompassing four main quadrants: merchandise innovation, communications administration, client rapport and monetary facet which they have named e-Business Model Ontology. Figure 5: Business Logic Triangle Source: Osterwalder & Pigneur (2002 The foundation of this model is the traditional business model (Figure: 5) which depicts the reasoning behind a business system, the theoretical and edifice execution of a commercial scheme and as the underpinning for the operation of business methods. The level of multiplicity mandatory in form of expertise and capital to manage on the modern market situation necessitates firms to join forces and broaden the risk through economies of scale. The technology, promotion, and other expertise required to trade in high-tech world markets often surpass the capacity of a single firm. The investment outlay needed is out of reach of most companies (Miller and Pekoe, 2009). Likewise, the EU advocates for an unremitting upgrading of a company’s ICT systems and IT dexterity to benefit from of the swiftly enhanced software and processes in the market. Corporations should integrate the ERP (Enterprise Resource Planning) schemes which outline the core podium for information swapping and induction of e-business and e-commerce (European Commission, 2008). One of the major benefits of embracing ‘business-to-business (B2B) e-commerce is express trading whereby business are now able to transact directly with each other thus removing the frequency of go-betweens or brokers. This effectively generates reduced outlay as the additional costs are eliminated when e-commerce serves both the consumer and company at least overheads to either of them. Other benefits in e-commerce are accessibility of alternatives in fee dealings as the sole online marketing medium offers unlimited market for traders and clients alike plus a range of prices. Similarly the supply-side of business owners are capable of teaming up their capital in efficient economies of scale as they are can seek for cheaper supplies (Andam, 2005). Conclusion Emerging technologies offer the prospect of enhancing the quality of life for all living things with careful harnessing of the innovation and ingenuity from the skilled persons. The emergence of the cellphones as easily accessible while being loaded with many features from the emerging technologies has completed ‘disrupted’ the conventional phone industries as the new firms in the industry embrace modern business trends enhanced by IT and online technologies. Consequently the greatest winner has being the customer unlike in other real disruptive sectors which perpetuate inequalities. Nevertheless, the emerging technologies are capable of disrupting trade not only via innovative objects and growth but as well as by transforming client outlook and business circumstances, but this should not be the yoke that hinders the progress of the sector. To this end modern business technologies like mobile phones, e-commerce and the internet should be aptly harnessed to enhance the development. References Andam, Z. R. (2005). e-Commerce and e-Business. Manila/Kuala Lampur: UNDP-APDIP. Barke, C. M. (2008). Cisco E-commerce Study Reveals Mobile Phone to Be New Fourth Channel for Revenue. Retrieved November 17, 2010, from Cisco Systems Inc.: Bellows, R. A. (2001). Emerging technologies and concerns in the beef industry. Proceedings of the Western Section ASAS, 2000. Miles City, MT: American Society of Animal Science. Catalano, K. and Fickenscher, K. (2007). Emerging technologies in the OR and their effect on perioperative professionals.(operating rooms). AORN Journal . Cozzens, S. 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(2002). Disruptive Innovation Explored. Concurrent Engineering Conference Proceedings July 2002. Cranfield, England: Cranfield University. Wahba, P. (2008). Biotech IPOs Dying on the Vine. Retrieved November 16, 2010, from USA Today: Read More