Technology’s value creation: Emerging, enabling, embedding
Technology has been conceptualised in many ways, ranging from scientific and engineering knowledge to business enterprise “production functions” to physical artifacts that fulfill a particular purpose. These different conceptualisations underscore technology as a multifaceted construct that encompasses production know-how, problem solving, and functionality.
Although new technologies present significant opportunities for value creation, the realisation of those opportunities varies across firms, industries, and technologies over time. An understanding of the sources of this variation can help firms with their strategic decision making and offer guidance to policy makers on how they can facilitate technological progress to help spur economic growth. It requires recognising the important distinction between invention and innovation that goes back to Schumpeter (1934). Whereas inventions represent scientific discoveries that encompass new knowledge within a technological domain, innovation represents the subsequent commercialisation of those inventions so as to create value—and, hopefully, capture some of it as well.
Therefore, situating the technology in its commercialisation context and identifying the features that can have a significant impact on its value creation are pivotal to understanding how firms and policy makers can contribute to technological progress and generate superior performance.
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Rahul Kapoor and David J. Teece. 2021. Three Faces of Technology’s Value Creation: Emerging, Enabling, Embedding.