MGMT1101 Lecture 7: MGMT1101 Week 7
Week 7: Digital divides: Technology diffusion and innovation
1. How does technology change impacts businesses?
Disruption innovation:
• Existing successful products blind companies to innovative possibilities. They meet current
ustoers eeds.
• New disruptive entrants view markets differently. They secure a foothold in emerging
markets not found appealing by established companies.
• Describes a process by which a product or service takes root initially in simple applications at
the bottom of the market, then relentlessly moves up market, eventually displacing
established competitors
• Disruptive technologies introduce a very different package of attributes from the one
mainstream customers historically value i.e. they are not perfect for the existing mainstream
customer
• Revenue and cost structures play an important part, disruptive technologies look financially
unattractive
• 4 characteristics of successful innovation: simplicity, convenience, accessibility, and
affordability
In summary:
• good managers liste to their ustoers ad tailor their produts to their ustos existig
needs
• successful incumbents, or leading firms, forecast technological trends, assess profitability of
products that are launched based on these trends for existing customers. BUT, the focus on
needs of the existing customer makes them ignore emerging technologies that do not meet
the needs of the existing customers
2. Some aspects of securing knowledge/IP/technology and TRIPS
Diffusion of technology:
Intellectual Property (IP): products of the human mind, ownership is predicted by law.
• Patents: grants inventor of a new product or process exclusive rights for a defined period to
manufacture, use or sell that invention
• Trademarks: designs and names, which merchants use to differentiate their products
• Copyright: exclusive legal rights of composers, authors, artists, to publish and dispose of
work as they like
IP Protection: wide national variants
• Legal systems:
o Common vs civil law
o Effectiveness of law enforcement
• Cultural values: different perceptions of property and property ownership
• Level of economic development
TRIPS
• TRIPS (Trade related aspect of intellectual property rights) reinforces existing conventions on
IP, administered by World Intellectual Property Organisation (WIPO)
o Patents, industrial designs, trademarks etc.
o How states should give adequate protection to IP rights and to enforce those in their
own territories
o How to settle disputes between WTO member countries
o Special arrangements during transition to a new system
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