APPENDIX B
PROCESSES OF TECHNOLOGICAL INNOVATION

Louis G. Tornatzky and Andrew C. Lemer

The study of technological innovation is a diverse and growing field. Terminology and theories describing the factors influencing the production and application of new technology differ among observers and researchers in the field, and few studies specific to building technology have been made. The committee undertook a brief review of the field to provide a common basis for its discussions.

In the most general terms, innovation is the introduction of a new idea (Mish, 1985). This introduction entails the production of new information and the diffusion of that information to people who can use it to solve problems, to see the world in a new way, or to enhance their efficiency, effectiveness, or living quality.

In a more specific application, technological innovation refers to the process in which a new idea is embodied in tools, devices, or procedures that are of practical value to society. Typically thought of as a new product, technological innovation may also be a new process of production; a substitution of a cheaper material, newly developed for a given task, in an essentially unaltered product; or the reorganization of production, internal functions, or distribution arrangements, leading to increased efficiency, better support for a given product, or lower costs.

Technological innovations often involve both tools and procedures, products and processes, interacting in new ways. Known drugs may be found to be successful in treating new illnesses, or changing the production line may yield improved rates of production. Many of the construction industry's technologies involve such combinations of hardware and software.



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The Role of Public Agencies in Fostering New Technology and Innovation in Building APPENDIX B PROCESSES OF TECHNOLOGICAL INNOVATION Louis G. Tornatzky and Andrew C. Lemer The study of technological innovation is a diverse and growing field. Terminology and theories describing the factors influencing the production and application of new technology differ among observers and researchers in the field, and few studies specific to building technology have been made. The committee undertook a brief review of the field to provide a common basis for its discussions. In the most general terms, innovation is the introduction of a new idea (Mish, 1985). This introduction entails the production of new information and the diffusion of that information to people who can use it to solve problems, to see the world in a new way, or to enhance their efficiency, effectiveness, or living quality. In a more specific application, technological innovation refers to the process in which a new idea is embodied in tools, devices, or procedures that are of practical value to society. Typically thought of as a new product, technological innovation may also be a new process of production; a substitution of a cheaper material, newly developed for a given task, in an essentially unaltered product; or the reorganization of production, internal functions, or distribution arrangements, leading to increased efficiency, better support for a given product, or lower costs. Technological innovations often involve both tools and procedures, products and processes, interacting in new ways. Known drugs may be found to be successful in treating new illnesses, or changing the production line may yield improved rates of production. Many of the construction industry's technologies involve such combinations of hardware and software.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building Technological innovation can also be an improvement in instruments or methods of making or doing innovation (Kline and Rosenberg, 1986). Industrial research facilities such as the telephone industry's Bell Labs have been recognized as major contributors to innovation in electronics. New technology that is not used is not innovation. Paradoxically, even technology that is well known and widely used in some industries or nations may still be new and innovative in a different setting. Many years can sometimes be required for new ideas and information to diffuse from one place or application to another. Such technology is still "new" to the society that receives its benefits. Although many people have come to regard new technology solely as the result of increasingly revolutionary discoveries in science and in our understanding of how things work, adaptations and new applications of older knowledge may also lead to innovation. Successful new technology and innovation tend to be inspired by the practical needs of individual people or enterprises, or the needs of many individuals expressed in market demand or social policy. Technological innovation may also be initiated by scientific invention—new discoveries and developments—but "market pull" is widely felt to be more influential than "technology push" as a force for innovation. The time between invention and innovation may be long. Whereas technological creativity tends to be "down-to-earth, with such mundane characteristics as dexterity and greed at the center of the act" (Mokyr, 1990), it shares with other forms of creativity an "occasional dependence on inspiration, luck, serendipity, genius, and the unexplained drive of people to go somewhere where none has gone before." The climate within which this creativity can occur, and innovation flourish, is said by many observers to be fragile and highly sensitive to social and economic conditions. On the whole, the forces opposing technological progress have been stronger than those striving for changes, and the study of technological progress is therefore a study of cases in which rare circumstances have permitted ''the normal tendency of societies to slide toward stasis and equilibrium" to be broken (Mokyr, 1990). Innovation is not necessarily good, and in any case, is of little value for its own sake (see box). Rather, innovation is an instrument to achieve broader goals of improved economic productivity, stronger competitive stance in international markets, and improved quality of life. Neither organizational theory nor empirical research supports the notion that innovative individuals or groups will unequivocally be more productive (Tornatzky, et al., 1990). Nevertheless, the absence of innovative adaptation to an environment characterized by rapid change is a reliable indicator of future decline and possible extinction for economic enterprises as well as biological species. In general, technological innovation takes work (see box). Invention may spring from either focused action or accidental discovery, but innovation requires conscious effort to apply new technology. The motivation for that

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The Role of Public Agencies in Fostering New Technology and Innovation in Building INNOVATION IN PERSPECTIVE In this technological age, innovation of often cited by the popular press and public policymakers as an essential element of our international competitiveness and quality of life. However, by simple definition, innovation is simply the introduction of something new—a new idea, method, or device—and it is not necessarily clear, as the term is innovation in not necessarily good, what are the indicators or measures of "goodness" that may be applied to judge whether a new idea, method, or device is a valuable innovation? The economic literature generally uses growth in productivity as a measure of technology's contribution to an activity. New ideas and methods termed "innovative" tend to be those felt to improve productivity, either by reducing the resources required to accomplish some end or by facilitating the production of new goods of services. Many people would probably acknowledge radar and computer-aided design systems as innovation, while few would readily do so for hazardous wastes associated with construction. The judgment of value may sometimes seem ambiguous: The year 1915 marks the introduction of both Einstein's general theory of relativity and processed cheese. Bulliet attributes to the invention of the camel saddle, sometime between 500 and 100 B.C., the camel's gradual displacement of wheeled transport in the Middle East and a subsequent lasting bias that was still visible centuries later in the dearth of wheelbarrows on construction sites in Tehran (Bullet, 1975). conscious effort is typically economic. Historically, Western technology has developed primarily in an economic context and has often been regarded as merely an outgrowth of economic needs and institutions (Rosenberg and Birdzell, 1990). Economic and technological factors are intertwined, perhaps inextricably, in the innovation process, but the possibility of achieving improved safety or other benefits not immediately measured in monetary terms often provides the incentive for innovation. The committee notes that lessons from studies of innovation in several fields suggest that users' needs are an important source of innovation.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building WORKING FOR INNOVATION In the beginning there is just you, a field, and some lettuce seeds. You prepare the field, sow the seeds, tend the plants and reap 20 heads of lettuce. Then from the sky falls a rake. There is still you, a field and some lettuce seeds, buy using the rake has allowed you to double your production. That is the launch provided by technology. So said Susan Lee (1991) in her review of Joel Mokyr's book on technological creativity and economic progress, The Lever of Riches. But Mokyr argues there is no free lunch. According to Mokyr (1990), dependence on inspiration, luck, serendipity, genius, and the unexplained drive of people to go somewhere where none has gone before." People striking out into uncharted territory discover new ideas, and innovation results when people work and take the risks to put these new ideas into practice. "Sustained innovation requires a set of individuals willing to absorb large risks, sometimes to wait may years for the payoff (if any). It often demands an enormous mental and physical effort on the part of the poineers." Mokyr suggest that risks aversion, leisure preference, and time preference influence the willingness of people at any particular time and place to make this effort, and these factors are thus of major importance in determining the rate of innovation in a particular society. DESCRIBING INNOVATION AS A PROCESS Technological innovation has been described often as a linear process of distinct stages or phases: innovation begins with scientific discovery, proceeds through development of practical applications of this discovery, and finally achieves success as dissemination and implementation at the hands of users (see Figure B-1). This linear model is overly simplified. In fact, the innovation process may be quite nonlinear, drawing repeatedly on basic knowledge, responding to newly perceived needs, and modifying earlier concepts of the tool, device, or procedure that eventually evolves (Tornatzky et al. 1990). Nevertheless, the progress of innovation requires, first, understanding of the basic principles and processes that permit manipulation of the physical

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The Role of Public Agencies in Fostering New Technology and Innovation in Building environment, and then the interaction of often complex social forces through which this understanding is to be put to use. Innovation overall may occur through the effect of small advances that cumulatively prove decisive in productivity growth or through great leaps of discovery that represent radically new ideas without clear precedent. Some argue that almost all innovation is a result essentially of the former, in that every major invention is followed by a period of learning and application that accounts for the bulk of growth. In any case, the large discoveries and small steps of exploration are complements, not substitutes (Mokyr, 1990). Solving seemingly mundane problems requires real creativity and can produce big payoffs. Figure B-1 Alternate views of the technology innovation process.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building NEED IS THE STARTING POINT In almost all cases of successful innovation, some unmet societal need is in the mind's eye of the innovator. However, in the quest for understanding of technological innovation, it is inventions, whether in small steps or great leaps, that have been the focus of illuminating case studies. Few generally accepted lessons about how invention occurs have emerged, but most of these stories share one important characteristic: a person or team of people, intimately familiar with both the new technology at hand and the potential for gain in applying that new technology, is pivotal (Kash, 1989). Sometimes the invention or new idea occurs to an individual or small group, such as Henry Ford's creation of a mass production assembly line for automobile manufacturing or the invention of nylon in a corporate research laboratory. At other times, the new idea emerges in a more diffused fashion, and it may even be difficult to identify precisely what the invention is. The constant search for improvement (termed keizen in Japanese) is such a diffuse source, producing apparently substantial benefits for Japan's auto industry. Generally speaking, invention is more likely to be encouraged when the inventor can capture the benefits of his or her work through licensing fees, product sales, or fees for services. Integrated consideration of design and production concerns seems to favor innovation. Design has been defined as the ''process of applying scientific and technical principles to meet requirements for suitable arrangement, appropriate use, convenience, ease and economy of manufacture, and acceptable appearance" (Pye, 1964). As practiced in industry, particularly with regard to consumer products, design is closely tied to the production and marketing efforts that lead to commercial success and the broader adoption of new ideas in the marketplace. Such close ties are the exception in most segments of the building industry, and the typical separation between designer and construction contractor hinders innovation. DIFFUSION OF NEW TECHNOLOGY INTO USE After invention has occurred, the new technology must enter practice to become effective innovation. If successful, the new idea may spread or be communicated to other users. New ideas may spread to other fields as well, spawning subsequent generations of innovation. For example, flat cable technologies developed initially for aerospace applications later became innovations in building controls and office automation.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building An important aspect of this spreading is incorporating the user's perspective in the new technology's application. Few technologies are "self-executing" in the sense that users can readily understand how to adopt them effectively to achieve benefits. Technologies that are particularly complex, different from those currently used, or costly to adopt may call for considerable adaptation and accommodation by the users. This is especially so when the user is a group or organization, rather than an individual (see Figure B-2); (Tornatzky et al., 1982; Tornatzky et al., 1990). Figure B-2 The context for adoption of new technology (from Tornatzky et al, 1990). The spreading of innovation into broad practice is frequently termed discipline and has become a subject of much study (Rogers, 1986). The study of diffusion as a discipline evolved after World War II, spreading through application in such fields as agriculture, medicine, education, transportation, and others.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building The study of diffusion suggests (Grubler, 1990) that innovations, even those embodied primarily in hardware and production techniques, are intrinsically interrelated to organizational and social adaptation processes. Once innovations appear and demonstrate potential technical and economic viability, they are put forward for societal "testing." They are either refused or accepted and, if accepted, begin to spread and interact with existing techniques that satisfy the same human need. Innovations that prove to be better adapted to the technical, economic, and social requirements imposed by society and its economy will gradually replace existing techniques and practices. When a distinct effort is made to encourage diffusion of new technology, particularly new technology resulting from the discoveries and inventions of a particular institution, the effort is often termed technology transfer. Gatignon and Robertson (1986) propose, from a marketing perspective, five factors influencing the filtering and persuasive effect of information transfer: (1) availability of positive information (negative information has much greater impact); (2) credibility of information (viewed as 'objective' or from influential sources); (3) consistency of information (greater consistency has higher impact); (4) type of information source (media or personal contact; the latter is more influential); and (5) personal characteristics of the individuals involved in the process. For example, initial negative experience with digital Heating, Ventilating and Air Conditioning controls in U.S. Army installations, attributable in substantial measure to inadequate training of maintenance personnel, has made it very difficult to consider such devices in current military construction. Formal programs of technology transfer that depend primarily on written materials are often less productive than those that encourage direct and frequent contact between the sources of new ideas and the potential users of those ideas. ROLE OF RESEARCH Research, a conscious and directed effort to develop new things, may not be necessary to innovation, but it facilitates the process. The early and overly simplified "linear model" of innovation described the bringing of new ideas into use as a progression from research to development to production to marketing. Although the linear model is still used in discussion, many investigators agree that it should be consigned "to the scrap heap of history" (Ziman, 1991), and alternatives have been proposed to reflect better the complex interactions of researchers and users of research (see Figure B-1). The "chain-linked model'' focuses more on the potential market demand for an innovation as a motivator of invention or design. Research in this latter model is an ongoing stream of activity in parallel with product development, production, and marketing.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building Research is seen to contribute, in principle, to all other stages of the process (Kline and Rosenberg, 1986). Other models incorporating feedback from later stages in the sequence to earlier ones are said to reflect the real relationships that operate in a major corporation and within the community of scientists and engineers seeking new technology. Some analysts have also tried to consider the ways in which research and development activities in other fields can spur innovation, as reflected in the 'composite model' illustrated in Figure B-1. One writer suggests that the sources of innovation are better comprehended as nodes in a multilayered and interconnected "neural network" that includes many diverse ideas and disciplines (Ziman, 1991). Some observers assert that the contributions of science to economic growth and industrial technology began in the late eighteenth century. The pressures for economic gain—through exploration and industrialization—drove the engineering innovation of that period that underlay much of Europe's Industrial Revolution. The success of efforts to explain natural phenomena with theory inaccessible to those who lack special training, and the creation of industrial research laboratories capable of extending theory, have brought science into the economic sphere and made its advance inseparable from that of industrial technology in Western economies (Rosenberg and Birdzell, 1990). The value of research as a source of innovation is difficult to estimate, as is the likelihood that innovation will occur under any given set of circumstances. It is reported (Rosenberg, 1986), for example, that Charles H. Duell, then commissioner of the Patent and Trademark Office, recommended to President McKinley at the beginning of the twentieth century that the agency should be closed down, because "everything that can be invented has been invented." This extreme example illustrates the persistent underestimation of future technological change. However, experience shows (e.g., Mansfield, 1968) that technological innovation draws on the fundamental knowledge produced by research. Moreover, as the technological content of new products and processes increases, the relationship between innovating organizations and basic science research becomes more active. Such observations are strong circumstantial evidence that research is a solid contributor to technological innovation, and some writers suggest that the industrial research laboratory, specifically established to facilitate exploitation of scientific knowledge for industrial purposes, is "one of the most important institutional innovations of the twentieth century" (Rosenberg, 1986). The contribution of research to innovation may be limited by the characteristics of the people involved in both the research and its application. Technical specialists seem to be typically capable of extending and improving methods of their own expertise and applying them to new uses. Any competent specialist is then likely to be reasonably good at anticipating the kinds of

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The Role of Public Agencies in Fostering New Technology and Innovation in Building performance improvements that can be teased out of a given technology. This capability may well be the primary basis for innovation in the construction industries, which traditionally occurs primarily on the job site. However, the very nature of an expert's education and professional experience is likely to disqualify that person from developing very new technologies based on different principles or even from appreciating the potential significance of new principles. Forming cross-functional or multidisciplinary teams that bring together individuals with differing perspectives is one means for overcoming this limitation. The individuals in such teams may see new ways of applying the principles and practices that, to their associates in other fields, are standard and lacking in the potential for innovation (National Research Council, 1991). REFERENCES Bulliet, Richard W. 1975. The Camel and the Wheel. Cambridge Mass: Harvard University Press. Gatignon, H. A. and T. S. Robertson. 1986. Integration of consumer diffusion theory and diffusion models: New research directions. In Innovation Diffusion Models of New Product Acceptance, V. Mahajan and Y. Wind, eds. Cambridge, Mass.: Ballinger. Grubler, A. 1990. The Rise and Fall of Infrastructures: Dynamics of Evolution and Technological Change in Transport. Germany: Physica-Verlag Heidelberg. Kash, D. 1989. Perpetual Innovation. New York: Basic Books. Kline, K., and N. Rosenberg. 1986. An overview of innovation. In The Positive Sum Strategy: Harnessing Technology for Economic Growth, National Research Council, 1991, Landau, R., and N. Rosenberg, eds. Washington, D.C.: National Academy Press. Lee, S. 1991. Technology: A free lunch for all. Wall Street Journal, March 4, A7. Mansfield, R. 1968. Industrial Research and Technological Innovation: An Economic Analysis. New York: W.W. Norton. Mish, F. C., ed. 1985. Webster's Ninth New Collegiate Dictionary. Springfield, Mass.: Merriam Webster. Mokyr, J. 1990. The Lever of Riches: Technological Creativity and Economic Progress. New York: Oxford University Press. Pye, D. 1964. The Nature of Design. London: Studio Vista Press. Rogers, E. M. 1986. Three decades of research on the diffusion of innovations: Progress, problems, prospects. Paper presented at the Conference on Innovation Diffusion, Venice, March 18–22.

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The Role of Public Agencies in Fostering New Technology and Innovation in Building Rosenberg, N. 1986. The impact of technological innovation: A historical view. In the Positive Sum Strategy: Harnessing Technology for Economic Growth, Landau, R., and N. Rosenberg, eds. Washington, D.C.: National Academy Press. Rosenberg, N., and L. E. Birdzell, Jr. 1990. Science, technology and the Western miracle. Scientific American 263(5):42–54. Tornatzky, L. G., and M. Fleischer, et al. 1990. The Process of Technological Innovation. Lexington, Mass.: Lexington Books. Tornatzky, L. G. and K. Klein. 1982. Innovation characteristics and innovation adaption-representation: A meta-analysis of findings. IEEE Transactions on Engineering Management (EM29):28–45. Ziman, J. 1991. A neural net model of innovation. Science and Public Policy 18(1):65–75.

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