Technological Development in Industry: A Business-Economic Survey and Analysis

 


An ISR Technology, management & business growth study


This book examines technological change in manufacturing firms and industries.

It covers origins; how new technologies affect jobs, firms, and industries; and major business-economic and other change influences.

In addition to reviewing the findings of published research on the subject, the book presents detailed original case studies of the introduction and utilization of new technologies in a wide range of firms in engineering, construction, food and drugs, textiles, petrochemicals, and other industries.

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CONTENTS

1. Technological Development in Industry: an Overview

Introduction* The sources of technological innovation* The impact of technology on industrial organization* Technology, society, and economic development*Technology and the growth and performance of manufacturing enterprises* The twenty-five firm survey*

2. The Economics of Technological Development

Introduction: economic theories of innovation* The significance of market and firm size* Other economic influences on technological development and business growth* Economic aspects of business growth, performance, and technological development in engineering* The economic costs and benefits of new technologies* The twenty-five firm survey*

3. Technological Development and Organization (1): General 

The impact of technology on the organization of industrial firms*The impact of organization on industrial technological development* Organization and the general growth and performance of firms* “Lean” manufacturing: the Toyota production model* The twenty-five firm survey*

4. Technological Development and Organization (2): Change Management, Job Satisfaction, and Productivity

Theories and research: an overview* The twenty-five firm survey* Engineering* Textiles* Chemicals and petroleum* Ocean tankers* Civil engineering and construction*

5. Technological Development and Organization (3): Twenty-Five Company Case Studies

In-depth analyses of firms in the engineering, civil engineering and construction, textiles, food and drugs, chemicals, and petroleum industries*

6. Trade Unions and Technological Development

Introduction* Trade unions and new technologies in the engineering, textiles, petrochemicals, and civil engineering and construction industries*

7. The Political and Legal Environment

Introduction* Current concerns*Government impacts on the engineering, pharmaceuticals, chemicals, and textile industries*

8. Education, Training, and Technological Development

Introduction and overview* Attempts to encourage more school leavers and college graduates into manufacturing* Education, training, and technological development in the twenty-five firm survey* The cases of engineering, textiles, and chemicals*

9. Technological Development, the Labour Market, and Employment

Technological labour supplies and supply shortages*Salaries and other benefits in attracting, motivating, and retaining employees* The twenty-five firm survey*

10. Finance and Investment in New Technology

Introduction: the contribution of investment to technological development*Investment in new technology in Britain* Banks, venture capitalists, and the stock market as sources of finance for new technology*

PRICE & SPECIFICATIONS


Print book

2nd. Revised edition 2003. New impression 2011

ISBN 9780906321294

122 two-column pages

Hardback

Price £74.95 including free postal delivery

E-book

E-book format price £16.15 (British pounds 16.15)

E-book ISBN 9780906321652


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SAMPLE PASSAGES

 A survey of the technological development process in 25 British manufacturing firms in six industries … found a wide range of factors had facilitated and hampered the introduction of new technologies. The survey examined the impact of new technologies on the production organizations of firms as well as wider social causes and concomitants of the process.

Most of the analysis related to the development of new technologies by already established plants. However, in a number of cases the significant technological changes concerned had entailed the creation of greenfield plants. The latter were usually a way around major physical environmental, trade union, or other obstacles to change on established sites. The technological developments covered several decades in the second half of the 20th century. In most cases, it was possible to obtain information on the origination of the changes – or on which parties had initiated the developments and the reasons – and on consultation/communication and other aspects of managing/implementing the changes.

Major business-economic and wider social obstacles to effective industrial technological development identified in the survey included… (page 14)

 In the engineering firms in the survey, there had been significant changes in the material inputs employed. In one firm engaged in the fabrication of large structures from individually designed sheet and foundry assemblies, recent product developments had meant a significant increase in use of nickel chromium for elevated temperature, new lightweight insulating materials, new burners or different fuels with greater efficiency, and more-sophisticated instrumentation and control devices. However, neither in this firm nor in the engineering industry at large were there any inherent structural market problems or obstacles to acquiring the necessary physical inputs. The main supply problems occurred during general business upturns and periods of inflation. Prices went up in industrial boom periods. Firms might be very much at the mercy of suppliers as far as prices and delivery dates were concerned. Inflation also caused firms major problems. Inflation introduced a significant amount of uncertainty or unpredictability into the contract sales process. The length of time of manufacture or the production cycle of many engineering firms was relatively long. Inflation could especially cause problems when firms had signed fixed-price contracts with customers abroad.

Finally, the construction industry’s demand for raw materials and components had changed considerably in type and quantity because of the new building methods. Construction methods in general responded to the price and availability of materials – although the process was somewhat circular. Short-term fluctuations in price and availability led to the adoption of a particular set of techniques at the time and/or job redesign to allow more-economical construction… (pages 31-32)

 The firms in the survey represented all the major types of industrial production system: one-off, small batch, large and mass batch, and continuous process. The firms concerned had the managerial and wider organizational features typical of these production systems. In particular, the large batch producers tended to be more functionally oriented, more hierarchical in their communications, and to have smaller management teams. By contrast, the one-off and small batch firms tended to be more project-oriented and open in their communications.

However, one major mass-producing engineering firm had an extremely open pattern of union-management communication. Meanwhile, one continuous process chemical manufacturer had a relatively closed one. This underlines the importance of such things as culture and management policies and goals in shaping the organizational structures and operations of firms.

Finally, there did not appear to be any relationship between production system type and overall rate of technological innovation in firms… (pages 36-37)

 Skill differentials have narrowed considerably within the construction workforce because of technical-production system change. The number of jobs calling for craft skills has declined. However, there has been a simultaneous increase in general levels of required competence.

Equalization of rates of pay has also accompanied the equalization of skills among the workforce. The craft unions have tended not to insist on maintaining differentials in the construction industry. The cultural tradition is that performance rather than status should determine earnings. In any case, the basic structures and operations of the industry allow little or no opportunity for establishing long-term group relativities.

Nonetheless, traditional craft job expectations have remained. These have delayed some advances in building design and technology that could have made use of less specialized craftsmen.

The tasks involved in producing a building have become much more closely specified and considerably less dependent on the skills and knowledge of manual employees. Planning and materials control functions have increasingly come within the province of professional managers. Meanwhile, supervisors have become mainly responsible for man management – a function not highly regarded by the workforce. In the firm in the survey, the continued existence of the foreman grade seemed to owe more to tradition than to organizational utility… (page 53)

 The 25-firm survey included 11 mechanical engineering firms.

The range and extent of technological development in these firms had not been as great as in textiles, construction, or chemicals. Further, the motives for change had been somewhat different. Major objectives of engineering firms’ managements had been the reduction or elimination of human error and the transfer of primary responsibility for rates of production from workshops to the offices.

Compared to textiles, the amount of labour saved through technological change had been small. Compared to chemicals and construction, the alteration in overall methods of production had been slight.

In many of the engineering firms in the survey, product developments had been a more significant feature of the recent production change process than technological developments (i.e., changes in plant, machinery, or equipment). Further, the development process had often consisted in raising existing products and techniques to new and higher capability standards – rather than inventing radically new products or means of producing them.

Customers and competition were the main spurs behind innovative activity. Firms’ own R&D departments and the influence of journals and exhibitions were of secondary importance. The R&D departments in the engineering firms were mainly development departments. For pure research purposes, firms tended to rely on outside contacts with specialist research organizations… (page 57)

 The most significant change in the trade union representation of engineering employees over the previous 2-3 decades had been the growth of the white-collar staff unions. In one firm (a typical case) out of a total of some 600 employees approximately half were now white-collar and half blue-collar or manual – compared with a previous ratio of roughly 1/3 white to 2/3 blue.

However, changes in trade union composition or representation in engineering did not only stem from technical-production changes. The unionization of white-collar staff in British manufacturing industry generally had owed much in recent years to outside trade union proselytizing and growing fears on the part of salaried staff about unemployment and loss of pay and other differentials vis-à-vis production workers.

In none of the engineering firms was there significant trade union opposition to technological change as such. No labour ultra-conservatism of the Luddite variety was evident in any firm in the survey. Moreover, in the engineering firms job demarcation disputes or conflicts over the inter-union allocation of production tasks were not as important as disputes over differentials (e.g. between supervisory staff and manual unions) and over the allocation of desired overtime working.

In one of the engineering firms, there had been several instances of the blocking of technical developments by the unions. The unions had opposed the installation of pneumatic mould rammers because these devices shook the operatives. There was resistance to de-sulpherized iron working where operatives were fearful of positive health hazards (and, according to management, wanted to gain increased financial compensation for this work).

The persistence of old informal ideas about a  fair day’s pay  and work-group opposition to potential rate busting had frustrated the effective utilization of certain high-capacity machinery and methods. Nonetheless, there had been acceptance of the latter because of their contribution to quality control… (page 78)

 In the mid-20th century, other major politico-legal influences on technological development in the textile industry were government-sponsored schemes to buy-out surplus capacity and obsolete equipment in old firms and offers of grants for new factory creation in Development Areas. Government-stimulated greenfield plant developments were common in the textile industry. In the firms in the survey, government regional aid policies had affected their decisions on the location of advanced new spinning, weaving, finishing, and other factories.

However, offsetting subsidy benefits, there were government-imposed costs and other problems.

Official minimum wage controls or incomes policy had adversely affected one of the textile firms in the survey. Over the years, there had been a steady devolution of wage negotiations to plant level in this firm (by mutual agreement with the unions).  As in the United States, it was advantageous to have plant-level negotiations in the more modern (chemicals, allied products) areas because plants tended to differ widely. However, the intrusion of national political considerations into wage negotiations in the 1970s had made for re-centralization. Going back to national negotiations would make productivity bargaining related to new technological and production developments at plant-level more difficult… (page 91)

 In many areas, developments in manufacturing technology tend to be somewhat slow. The bulk of the labour force in (say) engineering does not face a requirement for constant and repeated retraining for new occupations – even though there is a requirement for additional training to meet the diversity if not the pace of technical change.

With automation generally, plant and process setting up and programming activities become more important than ongoing control behaviour. Nonetheless, machines still cannot do many perceptual activities – for example, judging quality and recognizing patterns. People still have to do these.

In situations where it is possible to release operatives from on-line control, there is still usually a requirement for human beings to monitor and check plant or processes. Maintenance and repair skills also become of generally increased importance with automation. (5)

In the 25-firm survey, firms varied considerably in the in-service training and retraining they provided. They also differed widely in their use of local technical college and training organization facilities and in their evaluations of the relative merits of internal and external education/training.

The findings of the survey tended to support the thesis of a positive relationship between innovativeness and the employment of professionals-university graduates in key positions in firms. However, it was important not to confuse cause and effect here.  Large, well established and technologically progressive firms tended to attract and retain professionals/university graduates in larger numbers in the first place. Persons with comparatively limited formal technological etc. education and training had also started and built-up many excellent firms.

The survey findings also supported the thesis that the most highly sophisticated automated processes tended to affect only a small part of the total organization – and that there was often exaggeration of the level of skill and training required of workers in automated plants… (page 95)

 In the survey, the acquisition of human resources or labour (rather than materials, cash, or components) was the most significant and widespread problem on the input side of firms.

Many engineering, textiles, and pharmaceutical firms had chosen the location of their operations because of labour availability – rather than physical proximity to clients or easy access and transportation. However, this did not apply where the construction and petrochemicals industries were concerned. There were also significant differences in this respect within firms. For example, one large engineering group had located chemical storage facilities in the Northeast because of easy port access and a desire to minimize transportation and storage costs. However, most of the engineering operations of the group were located in areas of relative labour abundance.

None of the engineering firms in the survey had acute general labour recruitment problems, even when they were located in full employment areas. However, almost all experienced qualitative shortages of  good engineering skills .

For some years, the numbers and performance of applicants for craft apprenticeships had been in decline. Manufacturing employment in general and engineering and craft apprenticeships in particular had become significantly less attractive to school-leavers and their parents. Financially and in other respects, the tertiary or service sector ( office jobs ) seemed better. On top of this, widening opportunities for full-time tertiary education had creamed off substantial numbers of potential recruits at the school-leaver stage.

As far as wages were concerned, pay differentials between skilled and unskilled workers had steadily diminished over the years. It was no longer the case that, for example, skilled artisans could earn up to 50% more a week than their unskilled counterparts. This basic lack of financial incentives had been a major factor behind the reluctance of many school-leavers to devote years of study and effort on apprentice pay to acquiring a craft certificate… (page 101)

 The average British high-tech investment fund fell in value by 85% between March 2000 and March 2003. In America, the technology-oriented NASDAQ composite share price index plummeted by almost 3/4 over this period. Numerous high-tech companies with bombed-out share prices found they could not raise any more outside equity capital. They had to resort to living off their cash reserves, outsourcing, or drastic cost cutting in order to conserve cash and avoid bankruptcy. The market eventually bottomed out. However, the full recovery of technology share prices and investment losses would take years to achieve.

In the long-term, dividends are the main factor in equity investment returns. Some companies may enjoy buoyant share prices for long periods despite poor business financial performance. However, to continue to attract equity investment support, companies will eventually have to generate real returns to the shareholders-owners. Otherwise, their share prices will stagnate/fall and the investors will lose their capital.

After the bursting of the high-tech share price bubble, the remaining listed companies in the sector came under strong pressure to start earning and pay real dividends. Stock market analysts and investors returned to the traditional, proven methods of evaluating companies and business investment opportunities. Increasingly, companies had to show the market hard evidence of growth and performance – e.g. in the form of increased sales turnover, cash flows and reserves, dividend yields, price-earnings ratios, and share purchases by directors in their own companies… (page 112)

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