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T890: Technology shaping and technology policy

Unit 2: Technology shaping and technology policy

This unit will introduce technology shaping and technology policy and related concepts. The shaping approach reframes our understanding of how technology innovation is produced today. Thus, technologies are not just out there, waiting to be discovered like a pebble on a beach, but are more complex. We will consider the dynamic relationship between technology shaping, technological innovation and technology policy. Emerging from this discussion will be a growing awareness that technology policy is now not only what governments do, but is an arena with many actors, both public and private, acting to influence the development of science and technology. Thus, we move from understanding technology policy as simple linear models to more complex systems as demonstrated in Rothwell’s reading in unit 1. The institutional and organisational arrangements that facilitate and nurture this will be discussed in unit 3.

Learning outcomes

By the end of this unit, you should be able to:

  • understand and be able to discuss critically ‘technology policy’ and ‘technology shaping’, and also associated concepts such as: ‘promotion and regulation of science and technology’; ‘social constructivist approaches to technology’ and so on

  • be familiar with key debates in these areas, such as: the relative importance of governments, markets and other institutions in promoting innovation; the extent to which increasing public concern about science and technology increases regulation and acts as a brake on innovation or helps shape more sustainable innovation; and whether technology and innovation can be shaped.

1 Technology shaping

Technology shaping emerged from the sociology of science. Research on technological innovation, as shown in unit 1, has a strong base in economic thinking – in particular, in arguments concerning the relative importance of market and non-market institutions in promoting innovation. The key arguments of economists of innovation focus on the need to get inside the ‘black box’ of technology. In other words, technologies cannot all be treated as the same thing. It is necessary to know what is inside the ‘black box’ to make decisions about how the technology developed (was shaped). It is also necessary to get inside the technology to appreciate its role at present, and how it may be developed in the future.

Economists of innovation have been criticised for their ‘economic determinism’ – i.e. that economic forces dominate the shaping of technologies. More generally, innovation specialists from the 1950s to the 1980s focused on how governments might get technology through state investment in science and technology or by buying it from others.

The social shaping of technology emerged partially as a counter to these economic approaches. At its heart was the argument that the social dimension needed to be more coherently integrated into studies of science and technology.

The social shaping of technology approach also arose as an alternative to the main concerns of social scientists until the 1980s: to understand the impact and effects of technology on society. As Mackenzie and Wajcman put it:

“This is a perfectly valid concern, but it leaves a prior, and perhaps more important, question unasked and therefore unanswered. What has shaped the technology that is having ‘effects’? What has caused and is causing the technological changes whose “impact” we are experiencing?”

Mackenzie and Wajcman (1985), p 2

Box 1 Technology Shaping

Technology shaping concerns the social factors that shape technological change. To what extent, and how, does the kind of society we live in affect the kind of technology we produce? What shapes technology? How does society shape technology?

These questions are based on an assumption and an argument: that technology is more than objects, it is also a set of human activities and refers to what people know as well as what they do – it is about knowledge. Thus, technology is a social process and is shaped socially.

Activity 7

Read the document below by Mackenzie and Wajcman, which is the introduction to a book they authored (1985).

Make notes on how the authors define technology, technological determinism, and then on how the authors approach the issue of social shaping of technology – in particular, the relationship between social shaping and economic shaping of technology.

Comment

One key aspect in Mackenzie and Wajcman’s argument is that relations between people (including gender relations) are what shapes the development of technologies – that shaping is about social relations and social processes. They make the usually buried observation that ‘the economic shaping of technology is, in fact, the social shaping of technology’ (p 15). The dominant approach to technological innovation before the work of Mackenzie, Wajcman and others, was on how governments might promote technology, via support of science and its application, and public support for companies developing innovation strategies. Mackenzie and Wajcman and others emphasized as well the other often micro forces, like technology developed to weaken trade unions and reinforce gender relations, that influenced the shaping of technology.

Activity 8

Read the blog posting and the related East African case study below entitled “Eco-toilets innovations serving the poor; waterless, odourless and productive”. Answer the following questions:

  1. In what ways did Kenyan society shape the innovation of the eco-toilet?
  2. How did the project manager, David Kuria, overcome Kenyans reluctance to pay for using the toilet?
  3. What innovative marketing initiatives have been tried to achieve wide adoption in the slums of Nairobi?

Toilet Parties in the Nairobi Slums

When I first journeyed to Kenya in 2004, celebrating the launch of a public toilet facility was one of the last ways I imagined spending a Monday morning - or any morning (or afternoon, or evening), for that matter. In fact, unless I had enjoyed an elephant's dose of mango juice and was on a 5 hour safari across the Great Rift Valley, I might not have had reason to celebrate a toilet at all.

Six years later, however, armed with the realization that an estimated 2.6 billion people lack access to basic sanitation and 2.2 million die each year from water and sanitation related diseases, I now have billions of reasons to attend toilet parties, an emerging trend in the Nairobi slums thanks to David Kuria and Ecotact. So when the Acumen team received the invite to attend the launch of Ecotact's 17th Ikotoilet facility last Monday, I practically ran for my dancing shoes.

Sitting under a small tent adjacent to the about-to-be-launched Kawangware Ikotoilet, Rob Katz and I listened eagerly with the 200-plus gatherers inside and spilling out the edges of the makeshift party hall. The crowd - a mix of residents, officials and journalists - engulfed the architecturally distinct Ikotoilet structure. It was clear that Acumen wouldn't be dancing alone at this party.

The Minister of Public Health and Sanitation and the Chief Public Health Officer also showed up for the celebration. Given the honour of Chief Guests, they both made remarks before cutting the ribbon: this day marks the launch of a noble public-private partnership initiative, as we bring necessary services closer to the people and are no longer dependent on flying toilets.

The Kawangware facility is part of Ecotact's newly implemented slum outreach model; it is now the second Ikotoilet in the informal communities of Kenya. And according to Kuria and the Minister, there will be more Ikotoilets in Kawangware in the near future - extremely exciting news for Acumen as a BoP [bottom of the pyramid] investor!

Ecotact is experimenting with a school model in the slums as well. After cutting the ribbon at Kawangware - and being mobbed by reporters as she toured the facilities - Minister of Public Health and Sanitation and Kawangware MP Beth Mugo led a delegation to the Dagoretti Secondary School, about 10 minutes away from the new Ikotoilet.

The school's 150 students currently use pit latrines. But with funding from the Solid House Foundation, Dagoretti will soon inaugurate a free-for-use Ikotoilet on site. What's more, a biodigester will generate valuable methane gas, pumped from the toilet to the school's kitchen.

With facilities in Nairobi's central business district, city parks, slums and schools, Ecotact is tackling the sanitation problem here in Kenya on many fronts. As an investor and partner with Ecotact, Acumen Fund is eager to continue the celebration with Kuria and his team, as they grow from 17 facilities to a target of more than double that within the next year.

Eco-toilets innovations serving the poor; waterless, odourless and productive

Sanitation remains one of the most complicated community issues because it involves changing behaviour. There are not only cultural considerations but also entrenched viewpoints regarding sanitation services. Most Kenyans believe this service should be free and are reluctant to pay for it. This leads them to make unsanitary arrangements to meet their needs. However, the outbreak of disease often result, leading to much higher costs in terms of medical bills or even death. An innovation, the eco-toilet, has been developed to improve sanitation and health.

The eco-toilet project encountered many obstacles along the way. David Kuria, the project manager, ran into problems in acquiring land and licenses. Initially nine banks refused to finance the idea, but the Acumen Fund, a social venture capital firm, finally agreed. After one year of teaching him how to design a business plan, the fund invested $600,000. Kuria made a deliberate decision not to market the eco-toilet to the poor initially, but to rich Kenyans. Thus, an eco-toilet was established outside the Hilton Hotel, near the Kenyan Parliament and in a prime downtown location. David’s thinking was that if he could get the rich to overcome their resistance and pay for the service, the poor could be persuaded of the benefits of the eco-toilet and be willing to pay. The eco-toilet’s financial sustainability means charging for its use. Every day, 35,000 people use the toilet in Nairobi's Central Business District and 35 other eco-toilets in Nairobi, paying just five shillings, or about 7 U.S. cents, per visit.

The location of the eco-toilet also generated other revenues. Rent collected from the nearby convenience store and the shoe shine stands also help to make the eco-toilet a successful business model. The eco-toilet features piped-in music, the facility is kept spotlessly clean, it uses very little water and much of that is harvested rainwater. Wastes are recycled into fertilizer and methane gas adding to its environmental credentials. But the acid test of the model was to win acceptance in the slums of Kenya, particularly Nairobi. The first eco-toilet opened in Mathare slum. To encourage its use, the entrepreneurs developed a monthly card costing 100 shillings (about $1.20) per family. Pricing the service to make it affordable was one of the many challenges for the slum branch. Violence and general lawlessness in the slums is a particular problem as people are reluctant to venture out at night because of security concerns. It is hoped that the staging of family events in the area where the toilets are housed will encourage people to come out at night and to feel safe. Moreover, local groups have been invited by the entrepreneurs to form a committee to help run the facilities. Eco-toilet’s ultimate goal is for social transformation in changing people’s behaviour around sanitation and improving health.

Figure 1 David Kuria and an Eco-toilet
Figure 1 David Kuria and an Eco-toilet

If you want to find out more about the Eco-toilets the following URLs have been provided:

Question 8

In what ways did Kenyan society shape the innovation of the eco-toilet?

Answer

Kenyan citizens do not feel they should pay to access sanitation which leads to disease outbreaks because people relieve themselves in unsanitary ways. Encouraging use of a toilet and persuading people to pay for the service was necessary to improve health outcomes. Thus there were social, health and economic issues to overcome. The ecological benefits of the eco-toilet in using harvested rainwater, and use of the waste for fertilizer and biogas were also shaped by Kenyan society.

Question 9

How did the project manager, David Kuria, overcome Kenyans’ reluctance to pay for using the toilet?

Answer

He placed an eco-toilet outside the Hilton Hotel in downtown Nairobi, and charged for its use. It proved popular with middle class Kenyans who flocked to pay to use it. This addressed the social and economic problem. He then marketed the toilet to the poor, for whom it now had a certain social cachet. The poor were being given the opportunity to use a facility enjoyed by the rich.

Question 10

What innovative marketing initiatives have been tried to achieve wide use of the eco-toilet in the slums of Nairobi?

Answer

The toilet is located near various other facilities which raise revenue for the toilet business but also attract custom. Special discount cards have been sold to make use of the toilet affordable for the poorest families. Local community groups have been established to help manage the facilities and events arranged in areas where the toilets are to attract families and establish the areas as safe at night.

2 Social construction of technology and actor-network approaches

A related approach to that espoused by Mackenzie and Wajcman is called the social construction of technology (SCOT) approach. In the SCOT approach (see Box 2) the development process of a technological artefact (Pinch and Bijker, 19) is analysed from the perspective of all the different social groups and social interests that may be associated with its early development and thus may act to help shape its development. Pinch and Bijker use the development of the bicycle as an example. In the early days there were a vast range of design ‘variants’ and a ‘selection’ process funnelled them into the design which became the norm – a process ending in what they call closure. The argument of Pinch and Bijker is that although with hindsight the selection process appears to be a logical one with a successful final design (closure), at the time this was anything but the case – the successful design was just one of various serious rivals and ‘won’ through a process of dealing with problems arising from the various social groups interested in the bicycle’s development, including the anti-cyclists.

Critics of the SCOT approach see it as a kind of social determinism and some have proposed an alternative approach – called the actor-network approach, where the distinction between physical and social actors are collapsed together:

“The actor network approach is reducible neither to an actor alone nor to a network. Like networks it is composed of a series of heterogeneous elements, animate and inanimate, that have been linked to one another for a certain period of time. The actor network can thus be distinguished from the traditional actors of sociology, a category usually excluding any non-human component and whose internal structure is rarely assimilated to that of a network. But the actor network should not, on the other hand, be confused with a network linking in some predictable fashion elements that are perfectly well defined and stable …An actor network is simultaneously an actor whose activity is networking heterogeneous elements and a network that is able to redefine and transform what it is made of”.

Callon, 1987, p 93

Box 2 Social constructivism

Social constructivism is an outgrowth of the sociology of science, that assumes that artefacts and practices are best seen as the constructions of individuals or collectivities that belong to social groups (Law, 1987). Because social groups have different interests and resources, they tend to have different views of the proper structure of artefacts. The stabilization of artefacts is explained by referring to social interests that are inputted to the groups concerned and their differential capacity to mobilise resources in the course of debate and controversy. Social constructivists sometimes talk of this process as one of ‘closure’. Closure is achieved when debate and controversy about the form of an artefact is effectively terminated. The approach is useful because many artefacts are designed in the context of controversy – examples are airports, the bicycle.

Methods associated with technology shaping include case study methodology, the detailed and ethnographic study of particular technological changes, and careful rethinking of studies from the history of science. Social constructivism, the actor-network approach and technological systems approaches (see Box 3) have much in common. First, they agree that technology is not fixed by nature alone but by human interaction. Second, they agree that technology does not stand in an invariant relation with science, that the relation science/technology is a complex one (Faulkner, 1994). Third, they assume that technological stabilization can be understood only if the artefact in question is seen as interrelated with a wide range of non-technical and social factors.

Box 3 Technological systems approach

This approach (Hughes, 1987) understands technological innovation in terms of a systems metaphor. The argument is that those who build artefacts do not concern themselves with artefacts alone, but must also consider the ways in which the artefacts relate to social, economic, political and scientific factors. The argument is that innovators are best seen as systems builders. A good historical example of a systems builder was Edison as you saw in Block 1, who had not only to grapple with the technical (how to minimise the cost of transmitting power) and scientific (how to find a high resistance incandescent bulb filament) but also economic (how to supply electric lighting cheaper than gas), and political (how to persuade politicians to permit the development of a power system).

To summarise, I have introduced the social shaping of technology approach via Mackenzie and Wajcman’s classic text and considering social constructivism, actor-network and technological systems approaches. The social shaping approaches, worked on and developed in the 1980s and 1990s, are now integrated into the mainstream of research on technological innovation. Increasingly, technological changes are products of social processes. Consequently, outsiders or those people not directly involved in the design of, and decision-making about, a technology, can shape technology transformation.

Activity 9

Reflecting on your reading of the eco-toilet East African case study in section 1, in what ways does it demonstrate a social shaping approach?

Comment

The social shaping approach, where a range of actors are involved in bringing the technology to fruition, can be demonstrated at a technical level (licences, funding, business plan) and social level (changing peoples’ values and beliefs) in the eco-toilet case study. Thus, in order to commercialise the technology, the project manager David Kuria, had to negotiate with Nairobi city planners and lawyers, responding to their concerns in order to acquire land and licences. The Acumen fund, a social venture capital firm, provided the expertise and training to help him design a business plan and also funded the project. In tackling traditional resistance to paying for sanitation, Kuria first won acceptance of the eco-toilet among the wealthy citizens of Nairobi by placing an eco-toilet in a downtown, prime location. He was then able to locate eco-toilets in the slums of Nairobi which were enthusiastically received with the aid of marketing and the support of national politicians and local journalists. Thus, outsiders not directly involved in the design of the technology can have a significant impact on its commercialisation and success.

3 Technology policy

Now we will move from thinking about technology development to thinking about supporting technology development and innovation. Technology policy research attempts to explore the process of development of policies on technology. Traditionally, this has focused on national level policy development by governments, but increasingly local and regional institutions have been involved in technology policies. Also there has been expansion in supra-national policy development, as for example, within the European Union and African Union. Finally, and crucially, citizens have increasingly articulated their concerns about science and technology, and do this earlier in the process of development.

Historically, research on technology policy has tended to focus on how and why governments (and increasingly other institutions) develop technology policies, the implications of technology policy for the innovation process, evaluation of different types of technology policy in different contexts and studies of the impact of technologies, including on less developed regions of the world.

Increasingly, however, policy research has moved to address issues such as public-private relations and the growing institutional complexity of multi-agent processes. Policies are often designed to change a given situation but the situation is changing anyway and involves an ever increasing number of social agents and actors. Policy is constantly developing and is thus a process and not only a prescription.

Box 4 Technology policy

Basically, a technology policy is usually a set of defined proposals for preferred approaches to the development and use of technology, often set out in some form of policy statement or document. A policy statement may set out specific priorities, identifying preferred lines of development e.g. to focus on technology X rather than Y. In addition, it may sometimes specify specific means for achieving the stated ends. For example “to be at the forefront of the development of ‘Technology Z’, requires investment of X% of available R & D funding”.

The emphasis in policy statements is usually on defined ‘goals’ or specific aims, but equally technology policies also often reflect and comment on the underlying principles shaping the policy and may provide political justifications and arguments for the approach being adopted. Policies are processes and not only prescriptions.

At its simplest, a technology policy may amount to no more than a specific allocation of R & D funds to projects or programme, but policies may also propose other, more complex, institutional, organisational or financial measures to help achieve the proposed aims e.g. the establishment of a new grant scheme, or a new research programme or agency supported by public funds. Such proposals are sometimes called policy measures – ways of seeking to achieve the goals of the policy.

To summarise, various policy measures are developed and applied, and are usually linked to programmes (for example, of research or innovation support), in order to achieve policy goals. They involve processes, such as: those linking academic institutions to industrial sectors and the development of human scientific and technological capabilities.

3.1 The role of government

The government technology policy making process inevitably interacts with ‘external’ private sector policy making. Indeed in some cases the public and private sector policy making processes are intertwined in complex ways, as for example in Japan, where the Ministry for International Trade and Industry (MITI) has, over the years, developed a wide range of long term strategic plans, in collaboration with the private sector.

In the past, national level technology policy has often been the preserve of government that can develop longer term programmes and strategies and provide funding for key projects, with new R & D. To some extent this reflects the fact that, historically, governments have been centrally involved with defence and with major technologically related military projects and institutions. Defence has been the largest single area of state supported scientific and technological activity in many countries.

However, the civil side of technology policy has steadily expanded, with vast areas of industrial activity involving the development and use of new technologies. Many technology based utilities (e.g. telecommunications, energy and water supply) have been transferred to private companies. Private companies have their own technological agendas, and a key issue for government technology policy is the extent to which government can try to influence and steer private company policies at a national or international level (say to improve environmental sustainability or to increase national industrial competitiveness).

Another area of policy research, then, concerns the relationship between the public and the private.

3.2 A reduced role for government

Overall, there has been a trend towards less involvement, or at least different and less direct involvement, by the state. Sometimes, it is not a case of reduced state influence. Increasingly major projects and programme are being carried out on a collaborative basis, involving joint public and private initiatives. In terms of policy development, collaboration between government planning agencies and the private sector is becoming more common with interaction between government and private agency policies becoming two way.

Often, the role of government is better described as a ‘steering’ role - trying to give direction to a restricted range of technological issues, in a vast sea of complexity and uncertainty.

4 Choice of technology

Technology policy covers a wide range of activities and issues. At the most general, it is concerned with the whole question of which way society is going, or ought to be going. Over the past few decades a significant debate has grown up over the role of technology in society, fuelled in part by concerns about environmental impact, resource scarcity, and the implications of new technologies for employment and society generally. You have an opportunity to reflect on this in the next activity.

Activity 10

In many African countries there is a growing public debate about the use of genetically modified organisms (GMOs). In order to explore choice of technology and drawing on your general knowledge of the debate around GMOs, please answer the following SAQs:

What are the tensions around GMOs for African governments?

Why would governments want to be involved in regulating GMOs?

Comment

The tensions for African governments are around promoting economic growth through higher crop yields and increased trade offered by GMOs, and preventing the potential damaging environmental impacts of the technology. African governments have to balance these conflicting interests with limited human, policy and infrastructural capacities.

African governments want to be involved in regulating GMOs to protect their country’s biodiversity, food production systems, traditional knowledge and culture. The asymmetrical power relationship between African governments and large agro-business makes this a challenging task.

Out of this ‘Society and Technology’ debate has come proposals for effective ‘social control’ of technology, as an alternative, or at least an addition, to leaving choices up to market mechanisms. Various forms of longer range technology assessment or technology foresight process, coupled with mechanisms for ‘regulating’ the development of technology so as to avoid undesirable outcomes, have been suggested as public concerns have grown about a whole range of scientific and technological issues.

4.1 Research and development policy

Technology policy has emphasised choices concerning innovation support programmes and research and development funding – all set within broad strategies concerning preferred lines of technological and scientific development and assumptions about their relative outcomes – how and when investment in technology will yield economic and social pay-off.

Debates over which science and technology to promote can often be quite bitter since they affect departmental R & D budgets. Major research institutions will defend their programmes whilst insurgent new groups with novel ideas will try to get access to funding. For example, hard pressed renewable energy researchers often resent the large sums allocated to nuclear research.

The debates can also take on a political dimension since they sometimes reflect major political issues. At present defence related research is a major focus in the UK and some people feel this is a distortion of priorities. For example it is sometimes suggested that Japan’s economic success in the last half of the twentieth century was in part because it did not invest heavily in defence R & D and could therefore focus more of its innovative effort in the civil sector.

Other areas of debate can be equally contentious. Can and should the UK (or any other similar nation) try to ‘keep up’ in every area of science and technology? What should be the balance between the various fields? Can a nation afford to be at the forefront of computers, telecommunications, biotechnology, energy technology, and aerospace? Or should it be more selective? And if so how? Can European or African nations keep up by better integrating their technology policies? How can less developed countries access science and technology for their development needs?

These are large contentious issues often involving conflicts and uncertainties about potential future developments. A number of analytic techniques have been developed to try to reduce the uncertainty, the most recent being Technology Foresight.

4.2 Technology foresight

Many governments have introduced long range ‘technology foresight’ capacity, looking ahead perhaps 20 years.

In the past there had been some enthusiasm for ‘technological forecasting’, but this technique, which often relied on extrapolating trends into the future, was increasingly seen as too mechanistic and unreliable, given the ever more complex pattern of technological, economic and political developments. The technology foresight approach, by contrast, attempts to gather views from a wide range of experts and practitioners on likely patterns of technical and market developments and refine them, interactively, to produce a consensus on the prospects for specific new technologies or lines of scientific development. It has become more process oriented and less prescriptive. It is not just technical possibilities that are considered: patterns of social and economic change may also be considered, e.g. via long range scenarios, so that potential future market demands can be identified. We look at technology foresight as a research method in unit 4.

4.3 Promotion and regulation

Whichever way policies or priorities are chosen, two basic approaches to the implementation of technology policy or strategy are usually posited. The most obvious is by direct promotion or support of desired developments, through direct funding of R & D or demonstration projects or through some form of market support, subsidy, or tax concessions to stimulate desired developments. Stimulation or promotion can also be achieved by other forms of financial support e.g. low interest loans, loan guarantees etc. and by background support – the provision of technical advice, training schemes and so on.

The second approach to the implementation of technology policy is by means of regulation – legislative measures to inhibit undesirable developments and to ensure that hazards are minimised.

Regulation can also act as a stimulus to innovation that avoids undesirable effects and hazards. Thus, for example, new laws on toxic waste or vehicle emissions can stimulate companies to improve existing options or find alternative technologies.

The development of regulatory rules and controls can thus be seen not just as negative ‘technological censorship’ but equally as an indirect way of ‘steering’ the pattern of technological development positively. However not everyone sees regulation in this positive light, and there is a continuing debate over the relative merits of, and correct balance between, stimulation and regulation.

4.4 Technology push versus market pull

Another key issue in the application of technology policy, and indeed in the assessment of options, is the balance between technology push and market pull. Traditionally the R & D process has been seen as a linear one which was strongly influenced by a push from ‘pure science’, with scientific curiosity often shaping the pattern of development. Then, market concerns began to dominate and the emphasis in R & D moved away from longer term ‘blue skies’ research to a focus on ‘near market’ options i.e. focusing on product ideas which are almost, but not quite, competitive in the market place. More recently, there have been moves to integrate the innovation system.

4.5 Technology transfer

In this ‘pull or push’ tension, depending on the technology and its state of development, technology transfer activities are viewed as a way to bridge the gap between research and market, transferring ideas from researchers and inventors to private sector companies that might develop them commercially.

There are a number of ‘marriage bureaux’ – commercial organisations who collect ideas from the invention/R & D stage (e.g. from individuals, universities, companies) and offer them to potential investors and other companies for full scale development. Rather than simply providing financial support for development, ‘technology transfer’ of this type essentially relies on communicating ideas to potential backers, sometimes by helping people to transfer (e.g. from university to industry and vice versa). Either way, the basic idea is thus dissemination of ideas.

In parallel, some companies have become involved with Science Parks – commercial innovation centres usually established near Universities, intended in theory at least to commercialise ideas emerging from academic research (You will study some examples of these in unit 4 when looking at research methods).

4.6 Innovation support

Some companies still retain a full range of activities, from R & D to design, production to marketing. Increasingly, however, companies specialise in what they see as their core activities, building partnerships to integrate capabilities that they need but do not have. Those companies which depend strongly on science and high levels of technological innovation often have strong relations with universities, some investing millions in departments in return for first refusal on any commercial possibilities. Companies in some countries also still rely on governments and funding from regional bodies to invest in R & D, certainly in defence related industry, but in other targeted sectors as well.

In the UK, for example, the Department of Trade and Industry still offers a number of support programmes designed to help companies identify and develop new technologies. Schemes cover a wide range of areas, including computers and information technology, energy systems, new materials, biotechnology, nanotechnology, and so on. Some are linked to Research Council programmes, focusing on more fundamental R & D aspects, but more are designed to operate at the pre-competitive/near-market phase, providing support for technology transfer or perhaps direct development support to help new technologies establish themselves commercially. Many African countries also have support programmes. For example, in South Africa there is the Technology Innovation Agency which is tasked with ensuring research and knowledge is moved from universities and research institutes into technology based industries. South Africa also has the National Research Foundation which promotes research activity through funding and human capacity development activities.

The European Commission also operates a very wide range of innovation support and technology transfer schemes and programmes. The EU has an innovation website with a search tool that allows easy identification of research projects in different EU countries.

There are also a number of international agencies, such as the United Nations, some of whose programmes provide support for technological development of various types, sometimes as part of aid packages for less developed countries. And of course there are many international bodies who analyse technological issues and promote specific strategies at the international level e.g. the OECD (the Organisation of Economic Co-operation and Development).

At the other end of the spectrum there are local and regional innovation support and technology development schemes – many of them being funded under the various EC regional development programmes including to African countries or by the African Union or the African Development Bank.

5 Public participation

So far we have focused on governmental procedures and institutions. In the mid to late twentieth century these have been the main mechanisms for decision making on national issues like technology policy. But in the last decades there have been changes as the public have organized around their concerns, for example about nuclear power, pollution and risky chemicals plants, and more recently about mad cow disease and genetically modified crops. One of the constraints of formal technology policy approaches has been the lack of formalization of public voices. The degree of formal participation by ‘outsiders’ in complex decisions on technology policy is limited in the UK. The main route for most ‘outsiders’ to gain involvement is via consultation. Individuals or groups with an interest in or expertise on an issue may be invited (or sometimes be legally required) to submit evidence for example to Select Committees or Royal Commissions.

Public concerns and conflicts over some types of technological development have, in recent decades, led to noisy lobbying, major demonstrations, and even direct action against projects. Strong views on environmental protection are now influential across society. While some objections may relate to specific projects, there may also be wider objections to policies or even governments. In addition, there may be significant numbers of people who do not view the formal processes for decision making as legitimate or fair.

More open forms of government are sometimes prescribed as a remedy for at least some of these problems: certainly, as technology becomes more complex and remote from the influence of most ordinary citizens, there would appear to be a need for new ways to resolve major disagreements over the way it is developed and to set widely acceptable paths for the future.

Activity 11

Read Braun’s classic paper ‘Promote or regulate’. While reading it keep the following two basic questions in mind:

  1. What does Braun suggest are main reasons why Governments develop and apply technology policies?
  2. To what extent can the development of technology be steered or directed effectively by Government intervention?

The second question of course begs the sub-question – ‘effectively’ in what terms? That raises essentially political issues e.g. to what social economic or environmental ends might such steering be directed, and who decides? You might also ask, should governments seek to intervene in shaping technological development at all? As you will see Braun has his own views on this issue, as no doubt you will have.

Comment

In his paper Ernest Braun explores roughly the same ground as has been covered in this text so far, but provides more detailed insights on why and how governments attempt to promote and/or regulate innovation. The following exercises are designed to bring out some of the key points.

Activity 12

Write a brief list of the key reasons why, according to Braun, governments engage in the attempt to influence technological innovation. Then compare your list with the one below.

Comment

Reasons for Government Involvement

Braun outlines some of the basic possible reasons in section 2.1 of his paper:

  • 1 In order to strengthen the economy by stimulating economically successful technological developments. This is the promotion role.
  • 2 In order to regulate technology, so as to avoid socially and environmentally undesirable developments. This is the regulation role.
  • In section 3 of his paper he adds some more, perhaps subsidiary, reasons:
  • 3 In order to reduce the risks faced by the private sector, though this could be seen as in support of 1 above.
  • 4 In order to meet strategic national objectives, which may include ‘social’ objectives e.g. meeting specific social needs, providing employment, or environmental objectives, or defence related objectives.

Activity 13

Write a brief list of how you think governments might seek to influence innovation and the development of technology, i.e. what policy measures are available to them. Then compare your list with Braun’s Table 1 in section 4.1 of his paper, and read the discussion below.

Comment

Mechanisms for influencing technological innovation

How governments seek to influence innovation may be classified in many ways. Your study of this Block so far should have helped you come up with a general list e.g. in terms of R & D support, support for technology transfer and demonstration projects, the provision of subsidies and so on.

Braun’s taxonomy in his Table 1 goes further. It is quite complex, but it highlights some useful distinctions. He provides a categorisation by ‘policy domains’ (left hand column). He distinguishes (in succeeding columns) between direct and indirect mechanisms, between general and specific targets, and between the various stages in the innovation process at which support might be given. Whether or not you find Braun’s table useful, it does highlight the fact that the various mechanisms can have differences in focus.

Braun provides some brief examples, within this matrix of classifications, in the table. More flesh could be put on each entry as follows: for example at one extreme we might have direct R & D support for specific technologies targeted at specific companies; a less focused approach would be indirect financial incentives like taxation, presumably affecting a wide range of companies and products; and at the most general we might have the background provision of support for innovation via information, education and training schemes.

In subsequent sections of the paper, Braun then goes on to describe each of these mechanisms in more detail.

In addition to reviewing the various mechanisms available to governments for influencing technological innovation, Braun goes beyond the purely descriptive to ask to what extent should government be involved.

Clearly he feels there is a need for more than purely commercial considerations to enter the equation: he asks whether ‘social needs’ can be fed into the technology assessment and prioritisation process, and more radically, whether this might even result in the conclusion that innovation as such was not the answer.

Braun argues that the rate of innovation may be too fast, with new ‘planned obsolescent’ products being introduced ever more rapidly just in order to increase profits, without significant gains in use-value or utility. Indeed he suggests that not only have environmental problems worsened, but also that some aspects of rapid technological development may not have been beneficial in social terms.

This challenges the basic belief that technological progress and social progress are fundamentally linked. Certainly there are now clear signs that rapid technological ‘advance’ has had an increasingly negative impact on the environment, and may not be sustainable, in its current form.

The issue is perhaps whether technology can be managed and improved to avoid these problems, and if so, by what political/social means, although Braun seems to despair of this being possible.

Activity 14

SNAPSHOT:Mobile Money Speeds Commerce

Mary Mwangi has a small general store in Meru, Kenya. She has just received a call from a family friend and occasional supplier of stock to her shop who lives in Nyeri, nearly 100 miles away. She is told that for Ksh 7,000 (about $100 US) she could secure a supply of kitchenware for less than half the usual price, as long as she can pay for it today. This is a good opportunity for Mary as she knows that she can sell these goods in Meru at a profit.

How does Mary secure this deal quickly? Time and distance are not on her side. She doesn't hold a bank account and neither does the supplier. She does have the cash but it is in her Meru store. She could send her money with a friend on a bus to Nyeri but it will take most of the day and cost a significant part of her profit. Traveling with money is also a risk as highway robbery is not uncommon.

The answer lies in M-PESA (pesa is the Swahili word for cash). Mary recently registered with Safaricom to open an M-PESA account. This was a simple process that gave her access to an e-money account managed entirely through some simple menu instructions on her prepaid cellphone. Ten minutes after the call from her friend, Mary has been to a local Safaricom Airtime Dealer (of which there are several in Meru) and has deposited Ksh7,000 into her M-PESA account.

This is very similar to topping up he prepaid cellphone airtime, except she is loading cash into her M-PESA virtual account. A few minutes later Mary has returned to her shop where she sends an SMS text message instructing M-PESA to transfer half the cost of the goods to her friend's M-PESA account, effectively securing the purchase with a real time funds transfer. The goods are dispatched to Meru on the next bus, and when they arrive Mary settles the remaining money by sending another text message instruction to the M-PESA service. Making this payment quickly and securely by cellphone cost Mary Ksh60 (less than a dollar).

The M-PESA service is fast, secure, and very cost-effective. It is opening up new opportunities for businesses like Mary's all over Kenya as well as supporting person-to-person money transfers, or remittances, which are common in many economies where the bread winner supports an extended family, often many miles away. (Hughes and Lonie, 2007, p.63)

Comment

How did it happen?

M-PESA was the result of a good idea and fortuitous circumstances. Against a backdrop of donors looking for new ways to deliver funds to those in need and a growing focus on alleviating poverty by encouraging enterprise, “a hand-up rather than a hand out” (Hughes and Lonie, 2007), the UK’s Department for International Development (DfID) were looking for opportunities to use their capital to encourage business through joint investments with the private sector. Vodafone top executives had an idea that they were looking for sponsorship for. They pitched for DfID funds and were successful in winning £1million, funds which the company matched. Thus, DfID helped subsidize the investment risk. Vodafone had part ownership of a local telecoms company, Safaricom, who would launch the M-PESA project with the help of a project manager from Vodafone.

M-PESA as a project faced formidable financial, social, political, technological and regulatory hurdles. In-order to implement, Vodafone, as the parent company, had to marry the incredibly divergent cultures of global telecommunication companies, banks and microfinance institutions and at the same time negotiate the large and often contradictory regulatory requirements.

(Adapted from: Hughes and Lonie, 2007)

If you want to find out more about M-PESA the following URLs have been provided:

Comment

Both Vodafone and DfID were critical in realising this project. The Department for International Development made available a public sector challenge loan to Vodafone. These are loans made available to the private sector for initiatives that address challenges to providing a public good. This loan defrayed some of the risk to Vodafone, who matched the DfID funding, and made the project viable. Vodafone provided a project manager to Safaricom to provide the necessary expertise to expedite the project and to negotiate the legal regulatory framework in Kenya as well as bridging the different cultures of companies involved in delivering the innovative technology. As Mas and Radcliffe (2010) have written:

M-PESA’s market success can be interpreted as the interplay of three sets of factors: (i) preexisting country conditions that made Kenya a conducive environment for a successful mobile money deployment; (ii) a clever service design that facilitated rapid adoption and early capturing of network effects; and (iii) a business execution strategy that helped M‐PESA rapidly reach a critical mass of customers, thereby avoiding the adverse chicken‐and‐egg (two‐sided market) problems that afflict new payment systems.”

The next case study clearly built on the M-PESA technology reinforces many of the learning points from the M-PESA case study. Thus, the success of a technology is a blend of social and technological developments. Thus, the responsiveness of Kenyan society to a range of simple, secure and cheap financial products offered through developments in mobile telephony produced a successful synergy.

Activity 15

Read the M-KESHO case study and answer the following question.

Recalling Taylor’s discussion of incremental innovation in unit 1, discuss how the M-KESHO case study illustrates this concept. Taylor defined incremental innovation as ‘technological modifications or improvements to an existing product, process or system.’ (1996, p.16)

M-KESHO in Kenya: A new step for M-PESA and mobile banking.

M-KESHO is a savings account that is the result of a partnership between M-PESA’s Safaricom and Equity Bank in Kenya. M-KESHO customers, as with M-PESA, do not get charged huge fees (only a small withdrawal fee but no opening or monthly account fees) and the accounts do not require minimum balances. However, this account does pay interest. They are also linked to an emergency credit and insurance facility. The flexibility of the M-KESHO account sets it apart from a regular bank based savings account. Instead of only being able to conduct transactions against the account at one of the 140 Equity Bank branches in Kenya, M-KESHO customers can use any of the 17,000 M-PESA retail outlets. This is because the account works in a similar way to any other mobile banking application through a user interface on the mobile phone. It is also available through Equity Bank’s own mobile banking service. Customers can deposit or credit money to their account using their M-PESA account and which they turn into cash at the M-PESA outlet.

Safaricom is now discussing with other banks to see if they want to use M-PESA to make their banking options for customers more flexible. There is currently however, a short-term exclusively term in the contract between Safaricom and Equity Bank relating to co-branding, use of M-PESA agents and user-interface integration.

Some of the key features of M-KESHO and the operation;
Product suite M-KESHO is a package of financial products issued by Equity Bank that runs on the M-PESA transactional lines. The core product is a savings account, but account holders can also tap into loan and insurance facilities.
Branding It is jointly branded by Safaricom and Equity Bank – they own the brand and logo jointly. The first part of the logo takes after the M-PESA logo, while the second part has the brown colour of Equity (to me it looks more M-PESA-like than Equity-like). ‘Kesho’ means ‘future’ in Kiswahili. So they are positioning this as a more aspirational service than M-PESA, which is more functional.
Marketing: Equity Bank and Safaricom have developed a joint marketing plan with joint funding to market M-KESHO.
Account terms Like existing Equity and M-PESA accounts, the savings account has no account opening fees, minimum balances or monthly charges. Like M-PESA accounts, there are no monthly statements or passbooks. Unlike M-PESA accounts, it pays interest (though not very much: 0.5%-3% depending on saved balance) and does not have a limit on account balances.
Account linkages M-KESHO customers must have an M-PESA account (and hence be a Safaricom customer). In addition, they may have a normal Equity Bank account and this can be linked to their M-KESHO bank account, but that is not required.
Account opening Under the new agent banking regulations in Kenya, account opening cannot be delegated to agents. So account opening will take place either at branches or at a subset of some 5,000 M-PESA agents at which Equity Bank will place a bank representative. (These are students paid on commission) Customers must bring the original plus a photocopy of their ID and two photographs (at agent locations their picture will be taken on the spot with a digital camera). Customers complete a relatively short and simple application form, but accounts won’t be active until 48 hours later.
Account management M-KESHO accounts are held in a server that is owned, hosted and operated by Equity Bank. Equity Bank has the right to up-sell M-KESHO customers to full Equity Bank accounts when their account balance reaches KSH 10,000 = USD 133.
Deposit/withdrawal options: M-KESHO only takes electronic transactions, offering no direct cash in/out possibilities. Money can flow into and out of the M-KESHO account either from a customer’s M-PESA account or (optionally) from a normal Equity Bank account. M-KESHO customers can’t do cash transactions at an Equity Bank branch teller, but of course Equity branches are M-PESA agents so they can first cash into either their M-PESA or Equity Bank account and then transfer the amount into M-KESHO. M-PESA’s minimum transaction size of KSH 100 = USD 1.30 and maximum transaction size of KSH 35,000 = USD 467 also apply to M-KESHO.
Accessing M-KESHO through Safaricom’s M-PESA phone menu M-KESHO customers will have one more item on their M-PESA menu that says ‘M-KESHO’ (their M-PESA menu will get refreshed automatically over the air upon registration). A submenu then allows customers to fully manage their M-KESHO account: transfer money to/from their M-PESA account, request a balance inquiry or mini-statement (last five transactions only), and apply for the loan or insurance facilities.
Accessing M-KESHO through Equity’s Easy 24x7 phone menu Equity has its own mobile phone user interface for its customers, available through a number of channels: JAVA, WAP and USSD. Customers will have the option of managing their M-KESHO account (including transferring money in either direction between their M-PESA and M-KESHO accounts) from either their M-PESA phone menu or through the Easy 24x7 service.
Credit facility features Loans must be requested from the mobile phone, and are for amounts between KSH 100-5,000 = USD 1.30-67. Equity intends to use a credit scoring system based on the balance and transactional history of the customer on their M-PESA, M-KESHO and normal Equity accounts (if any) for the previous six months. There is an application fee that depends on the amount, ranging from KSH 20-500 = USD 0.27-6.67. Overdue interest is charged at 3% of outstanding balance.
Insurance facility features This is limited to personal accident insurance for the first year, then it is upgradeable to full life insurance cover. It is optional, and customers apply through their mobile phone. Annual premium is KSH 530 = USD 7 if paid annually in advance (the premiums are higher if customers choose to pay on a monthly or weekly basis reflecting the time value of money.

If you want to find out more about M-KESHO the following URLs have been provided:

  • M-KESHO in Kenya: A new step for M-PESA and mobile banking; article by Ignacio Mas, Bill & Melinda Gates Foundation
  • Kenya: M-Kesho Heralds a New Dawn for E-Commerce
  • M-PESA meets microsavings with Equity Bank deal in Kenya, Jim Rosenberg: Tuesday, 18 May 2010

Comment

M-KESHO built on the success of M-PESA. It developed the M-KESHO product to offer a further range of services to customers that acknowledged the demand for a more sophisticated and varied offering of financial products through mobile telephony. Taylor defined incremental innovation as ‘technological modifications or improvements to an existing product, process or system.’ (1996, p.16). While the case study does not tell us much about the technological developments, it is likely that the extension of services required the development of new functionality for the M-PESA user interface on customers’ mobile phone and compatibility with Equity Bank’s own mobile banking service.

6 The move to firms, technology strategy, systems of innovation and ‘publics’

The study of technology policy and innovation is dynamic. The study of technology shaping has brought an overtly social dimension to what was once an overtly economic and political perspective. The study of innovation processes, instead of a narrow focus on studies of science and technology, also added a strong jolt. The emphasis on innovation processes has moved research closer to the point of production and use. Innovation research has moved from study of one-off innovations, to whole industrial sectors, and to the role of the firm. Altogether this has allowed a more integrative approach to emerge in the last decade – the study of systems of innovation.

In that way, the processes of innovation are shown to be systemic and involving more than a good knowledge of scientific discovery and its application. Nonetheless, the study of innovation is not just about looking for ways of commercializing science. Faulkner’s synthetic research on the different types of knowledge used in innovation (1994) illustrates the rich and diverse mix of theoretical and practical skills required.

Recently, another dynamic has emerged in policy studies of science and technology - that of the ‘public’ (or perhaps ‘publics’). Debates over environmental damage, in particular, highlight that the public has become extremely cynical about certain types of official expert advice. One response has been to advocate that more public understanding of science is undertaken, implying that scientists need to educate the public so that they are better informed about science and thus more accepting of it. However, another response has been that the scientists may be part of the problem and need educating also, since they seem to be so out of touch with common concerns of citizens groups. This leads to the view that there is not one ‘public’, but citizens with different situations and concerns and thus no one best approach to innovation.

A study led from the Open University (Policy Influences on Technologies in European Agriculture - PITA) looked at whether the world’s biggest agro-chemicals companies trying to commercialize genetically modified crops have changed their innovation systems in the light of public disquiet about risks and uncertainties (Tait et al, 2002). These companies have traditionally seen their key users/customers as farmers, one particular type of public. They are also increasingly confident in dealing with government and EU regulators, who can be seen as a kind of ‘filter’ for public concerns. But the research showed that they were much less confident in dealing directly with public concerns, whether directly articulated, for instance via the media, or via non-government organizations.

To summarise, in this unit I have introduced two related big issues – technology shaping and technology policy. In technology policy, I mapped the moves from government/market approaches towards more multi-social agent approaches, where the different ‘publics’ wish to participate more in what some see as the risky and uncertain environments of new science and technology. This change is, at one level, a result of major scientific uncertainty leading to more organized public concern (for example, as a result of nuclear accidents and more recently mad cow disease). But also this opening up of science and technology increases opportunities for more social groups to become involved in the pressure for increased public accountability of new technologies.

As we saw earlier, technology policy analysis and research has historically focused either on issues of promotion or on issues of regulation. Technological promotion can take the form of initiatives to promote a whole technology (like IT or biotechnology, aerospace or renewable energy technologies), an industrial sector (like electrical engineering or construction), a section of industry (like small and medium enterprises), or even a specific firm. It can also take a regional perspective, such as when measures are proposed to address the uneven technological development across a country, or say the European Union.

Policies to promote technology were a significant part of the successful development of Japan, South Korea, Taiwan, and other countries of East Asia, as well as China, India, and Latin America. Almost all those countries which became independent after the second world war, in Asia, Africa and the Caribbean established formal policies to promote technologies and encourage those with such technologies to invest.We have seen that the classic notion of technology policy meaning state policy for technology has broadened considerably – both to encompass the role of different interest groups in shaping public policy, and to take up the increasing use of initiatives that are mixed public/private, or require public steering of private and voluntary activities.

Conclusion

We have covered a lot of ground in introducing technology policy and the shaping of technologies in this unit. We chose these two concepts because they correspond to important theoretical perspectives in the study of innovation. The study of technology policy has been historically dominated by economic approaches, particularly those economic approaches that focus on institutions and evolutionary perspectives. The technology shaping approach has brought rigorous social perspectives to technology policy and innovation. In the next unit, we look at the institutional context of technology policy and innovation.

References

Bijker, W.E., Hughes, T.P. and Pinch, T.J. (eds) (1987) The Social Construction of Technological Systems, Cambridge: MIT Press.
Braun, E. (1996) ‘Promote or Regulate: The dilemma of innovation policy’, Section 1 of Block 5 Technology Policy, T302 Course, Open University.
Callon, M. (1987) ‘Society in the making: the study of technology as a tool for sociological analysis’, in Bijker, Hughes and Pinch, pp 83-103.
Faulkner, W. (1994) ‘Conceptualizing Knowledge used in Innovation: a Second Look at the Science-Technology Distinction and Industrial Innovation’, Science, Technology and Human Values, 19, 4, pp 425-458.
Hughes, N. and Lonie, S. (2007) “M-PESA: Mobile Money for the "Unbanked" Turning Cellphones into 24-Hour Tellers in Kenya” Innovations: Technology, Governance, Globalization, August 2007 http://www.policyinnovations.org/ ideas/ innovations/ data/ m_pesa
Hughes, TP (1987) ‘The evolution of large technological systems’, in Bijker, Hughes and Pinch, pp 51-82.
Law, J. (1987) ‘Technology and heterogeneous engineering: the case of Portuguese expansion’ in Bijker, W.E., Hughes, T. P. and Pinch, T.J. (eds) The Social Construction of Technological Systems, Cambridge, MIT Press.
Mackenzie, D. and Wajcman, J. (1985) ‘Introductory essay: the social shaping of technology’, in Mackenzie, D and Wajcman, J The social shaping of technology. Open University Press.
Tait, J., Chataway, J. And Wield, D. (2002) ‘The life science sector: evolotuion of agrobiotechnology in Europe’, Science and Public Policy, no.29, pp.253-58.
Taylor, Ernest (1996): T302 Innovation Design Environment and Strategy, Block 1 An Introduction to Innovation, Section 2 (pp 43-63) The Innovation Process, Milton Keynes, The Open University.

Acknowledgements

Acknowledgements

Grateful acknowledgement is made to the following sources:

Quotes

Mas, I. (2010) ‘M-KESHO in Kenya: a new step for M-PESA and mobile banking’, Bill & Melinda Gates Foundation, [online] http://financialaccess.org/node/2968

‘Toilet Parties in the Nairobi Slums’ blog post taken from http://www.nextbillion.net/blog/kenya-dispatch-toilet-parties-in-the-nairobi-slums

Quote from http://undertoldstories.org/ stories/ acumen-funds-new-kind-capitalism

Figures

Figure 1 from http://www.nextbillion.net/blog/kenya-dispatch-toilet-parties-in-the-nairobi-slums