Technological Environment

Presented By:•Adesh Thangden•Anmol Pasa Shrestha•Asish Tandukar•Chhitiz Shrestha•Dikshya Acharya

NepalDeveloping economy: transferring from rural

to urban and traditional to modern market oriented

Predominantly agricultural country, about 80 percent populations deriving their livelihood from this sector and the main source of gross domestic production (about 40%)

Literacy rate: 68.2% ( According to the UNDP report 2011)

Nepal’s economy at a glance

142 Cote D’Ivoire

$1,700

143 Kenya $1,600

143 Ghana $1,600

143 Benin $1,600

144 Tanzania $1,500

144 Zambia $1,500

145 Nepal $1200

145 Uganda $1,200

145 Haiti $1,200

145 Mali $1,200

145 Burkina Faso

$1,200

146 Rwanda $1,100

146 Burma $1,100

146 Ethiopia $1,100

1  QatarUS$ 91,379

2 Luxembourg 89,562

3 United Arab Emirates

57,744

4  Norway 56,9205  Singapore 56,797

6 United States 47,084

7 Switzerland 46,424

8 Hong Kong 46,333

9 Netherlands 42,447

10  Austria 39,71111  Denmark 39,41012  Australia 39,23113  Sweden 38,88514  Canada 38,84115  Germany 37,622

IntroductionTechnology includes all aspects of applied

science for achieving a practical purpose.Technology is viewed as a means of

combining four factors of production( land, labor, capital and knowledge) which increases the ability to create new product from combining these factors.

DefinitionsAccording to G. Jones And C. Hill : “Technology

is the combination of skills and equipments that managers use in the design, production and distribution of goods and services.”

According to R.W. Griffin (2007) :- “Technology is the set of processes and systems used by organizations to convert resources in to products or services”.

Business and TechnologyBusiness and technology are inseparable, and

complementary to each other.Technology advancement increases the

production, effective use of resources, and brings opportunity for upgrading business firms.

Technological change leads to improved production of goods and services

Business and TechnologyTechnology which are related to business are:-

Reduced running costsImproved productivityImproved competitivenessLower costs per unit of productImproved quality of service (e.g. speed of

service)Reduced wastage

Technology and Human FactorThere are 3 areas which make the effective

use of technology and they are: Production, Investment, &Innovation

The capability of technology revolves around its people.

Managers should be skillful for full utilization of technology.

Technology and Human FactorEmployee must have ability to acquire new

skills.Technology can cause impact on business

firm:• Shutting down of old business• Changes in occupational structure and• Displace of employees

Status of Technology in Nepalese Industrial SectorResearch and DevelopmentExports as Indicators of TechnologySkill base for TechnologyTechnology transfer

Research and DevelopmentR&D is generally dominated by

universities and government research agencies

Industrial sector basically classifies it as “Quality control and Production Engineering” activities

Most industries are dependent on imported and low grade technologies

Less focus is given to the importance of R&D Only 0.13% of GNP and GDP

activitiesR&D is classified tax deductible by

the government in theory only

Exports as Indicators of TechnologyTechnological status of a nation can be

measured by its export statusNepalese exports are mainly focused on raw or

semi-processed materialsMajor exports in the form of finished goods

include:CarpetsGarmentsLeather Products

This deficiency is primarily caused due to lack of efficiency and competitiveness

Skill base for TechnologySkill base for technology can be gauged by education

enrollment statisticsNepal has witnessed more than 5 decades of

educational enrollment yet, enrollment ratio is minimalThe nation needs

Mechanical skillsElectriciansIT ProfessionalsChemical TechniciansBusiness Entrepreneurs

Yet the required level of Human capital is well below the need.

Technology TransferThe most commonly used

modalities:

FDI via joint ventures, technical collaboration, import of machinery and equipment, technical assistance through human assistance

Other mechanisms -- through license, exchange patents, or a know-how agreement, personal contact etc.

Technology Transfer in NepalForeign Investment and Technology Transfer Act, 1992

The Act defines technology transfer as any transfer of technology to be made under an agreement between an industry and a foreign investor on the following matters:Use of any technological right, specialization,

formula, process, patent or technical know-how of foreign origin;

Use of any trademark of foreign ownership;Acquiring any foreign technical, consultancy,

management and marketing service

Status of Technology Transfer (as per 2007)

No. of projects approved

0

50

100

150

200

250

Upto

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Number of projects with foreign collaboration

Status…Scale of projects with foreign collaboration

146199

1151

0

200

400

600

800

1000

1200

Nu

mb

ers

Large Medium Small

Industry category

Status…Category of projects with foreign collaboration

Manufacturing89%

Energy-based3%

Agro-based3%

Construction4% Mineral-based

1%

Status…Status of foreign investment projects

Operational27%

Under construction

17%Licensed

8%

Approved42%

Cancelled5%Closed

1%

Science and Technology policyNepal adopted the science and technology

policy in 1989.Objective was to improve country’s S&T for

the over all development and scientific creativity.

Later S&T adopt new innovation and development of science and technology to increase production and productivity.

Science and Technology policyThe following strategies were adopted for the

sector:-• Development of technologies and services for priority

areas of socio-economic development.• Fulfillment of people’s basic needs. • Qualitative development of human resources

Three Year plan (2010/2013) focused on• Ensuring maximum utilization of the resources.• Developing and adopting appropriate technology

through mobilization of private sector. • Developing a mechanism to conduct research and

development activities.

Science and Technology policy• Contribution in the socio-economic

development of people.• Encouraging universities, concerned institutions

and individuals in scientific researches.

Information TechnologyInformation technology (IT) is a branch of

knowledge concerned with the development, management, and use of computer-based information systems.

The term "information technology", or IT, commonly refers to computers and computer networks but is also used to encompass other information distribution technologies such as television and telephones etc.

IT policy Government adopted Information technology

policy in 2000.The main objectives were:

To increase employment through reaching IT among the general public

To create knowledge based societyTo established knowledge based industry

IT in NepalIn Nepal, Mercantile Office System introduced

e-mail services in 1993.Mercantile Office Systems, the first Internet

Service Provider (ISP) in Nepal started its services since July 1995

Today there are about 30 ISPs in NepalIT mostly limited to urban areasYet due to low costs of computers nowadays,

it is spreading nation wide gradually

IT in NepalIn recent years, the use of Internet has

increased in the countryThe most web-effected areas of information in

Nepal are Education, Travel,Tourism, and Media

The past few years have seen an impressive growth in Internet use and web-based information dispersal in the country

IT in NepalToday, there are about 300,000 users of

Internet in the countryHowever, the majority of the internet users

are in the Kathmandu valley.Yet, it has much scope Nation wide

The End