Technology (from Greek τÎχνη, techne, "art, skill, cunning of hand"; and -λογία, -logia[1]) is the making, modification, usage, and knowledge of tools, machines, techniques, crafts, systems, and methods of organization, in order to solve a problem, improve a preexisting solution to a problem, achieve a goal, handle an applied input/output relation or perform a specific function. It can also refer to the collection of such tools, including machinery, modifications, arrangements and procedures. Technologies significantly affect human as well as other animal species' ability to control and adapt to their natural environments. The term can either be applied generally or to specific areas: examples include construction technology, medical technology, and information technology.
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Both definitions revolve around the same thing - application and usage.
Technology is an enabler
Many people mistakenly believe it is a technology that drives innovation.
Yet from the definitions above, that is clearly not the case. It is an opportunity
that defines innovation and technology which enables innovation. Think of the
classic "Build a better mousetrap" example taught in most business
schools. You might have the technology to build a better mousetrap, but if you
have no mice or the old mousetrap works well, there is no opportunity and then
the technology to build a better one becomes irrelevant. On the other hand, if
you are overrun with mice then the opportunity exists to innovate a product
using your technology.
Another example, one with which I am intimately familiar, are consumer
electronics startup companies. I've been associated with both those that
succeeded and those that failed. Each possessed unique leading edge
technologies. The difference was opportunity. Those that failed could not find
the opportunity to develop a meaningful innovation using their technology. In
fact to survive, these companies had to morph oftentimes into something totally
different and if they were lucky they could take advantage of derivatives of their
original technology. More often than not, the original technology wound up in
the scrap heap. Technology, thus, is an enabler whose ultimate value
proposition is to make improvements to our lives. In order to be relevant, it
needs to be used to create innovations that are driven by opportunity.
Technology as a competitive advantage?
Many companies list technology as one of their competitive advantages.
Is this valid? In some cases yes, but In most cases no.
Technology develops along two paths - an evolutionary path and a
revolutionary path.
A revolutionary technology is one that enables new industries or
enables solutions to problems that were previously not possible. Semiconductor
technology is a good example. Not only did it spawn new industries and products,
but it spawned other revolutionary technologies - transistor technology,
integrated circuit technology, and microprocessor technology. All of which provide
many of the products and services we consume today. But is semiconductor
technology a competitive advantage? Looking at the number of semiconductor
companies that exist today (with new ones forming every day), I'd say not. How
about microprocessor technology? Again, no. Lots of microprocessor companies
out there. How about quad core microprocessor technology? Not as many
companies, but you have Intel, AMD, ARM, and a host of companies building
custom quad core processors (Apple, Samsung, Qualcomm, etc). So again, not much
of a competitive advantage. Competition from competing technologies and easy
access to IP mitigates the perceived competitive advantage of any particular
technology. Android vs iOS is a good example of how this works. Both operating
systems are derivatives of UNIX. Apple used its technology to introduce iOS
and gained an early market advantage. However, Google, utilizing its variant
of Unix (a competing technology), caught up relatively quickly. The reasons for
this lie not in the underlying technology, but in how the products made
possible by those technologies were brought to market (free vs. walled garden,
etc.) and the differences in the strategic visions of each company.
Evolutionary technology is one that incrementally builds upon the base of revolutionary technology. But by it's very nature, the incremental change is
easier for a competitor to match or leapfrog. Take for example wireless
cellphone technology. Company V introduced 4G products prior to Company A and
while it may have had a short-term advantage, as soon as Company A introduced
its 4G products, the advantage due to technology disappeared. The consumer
went back to choosing Company A or Company V based on price, service, coverage,
whatever, but not based on technology. Thus technology might have been relevant
in the short term, but in the long term, became irrelevant.
In today's world, technologies tend to quickly become commoditized, and
within any particular technology lies the seeds of its own death.