Wharton Chapter 5

Wharton Chapter 5 discusses the government's role in emerging technologies. Despite the negative image of government restricting innovation and hindering the emerging technology process, government can play a very monumental and beneficial role, as illustrated by the development of the Internet. Wharton identifies seven general ways the government can impact an emerging technology:
Military Technology – Encourages new technologies that the government and military can benefit from.
-Research Infrastructure – Government invests in general research and encourages the findings to be shared
-Institutional Infrastructure – Government provides public and legal institutions to foster or prohibit emerging technologies
-Standard setting – Although standards are usually set by the market, the Government can step in and establish a technology standard.
-Government Regulation – This is especially influential in the medical field with the regulation by The Food and Drug Administration.
-Government Directives – the Government does not fund any technologies, but takes a direct role in influencing the commercialization efforts
-Government Subsidies – Government directly support different firms and technologies.

Wharton continues the chapter with 10 different lessons for managers regarding government interaction with emerging technologies.
-Government can help shape a new technology in the beginning – look outside the box and focus on future application of the technology
-If the Government withdraws research support, beneficiaries of the support will resist – managers can either push for continued support, or position themselves to somehow benefit from the Government withdrawal
-Government can help transition from public to private “ownership” of a technology b- transition periods are great opportunities to gain a competitive advantage
-New technologies can cause social concerns – companies must be prepared to defend their stance and technology, and political demands can turn into profit opportunities
-Disruptions caused by the technology will be met with legal and political reactions – managers must look at the broad spectrum for any possible implications caused by the new technology
-A high demand technology will create demands for government-regulated universal service – this can translate into protection from market competition
-Quality of service should be regulated by the market, but dominant firms sometimes make the mistake of providing poor customer service – managers need to recognize the importance of customer service and customer satisfaction, no matter what market position the firm is in
-The power of individual firms may need to a monopoly, in which case the government may step in and try to regulate – companies need to encourage fair competition or they might face regulation from the government
-Bottleneck markets may result in the government stepping in to address the issue of the vertical integration of conduit and content – companies must once again need to encourage fair competition across the entire market or risk facing regulation from the government
-Government regulation can have unintended side efforts and possibly even negatively impact the commercialization of the technology – companies should strive for minimal regulation, if any.

The Government has the ability to affect an emerging technology in every stage of development.

Managers and companies must be aware of the potential impact from the government, and stay proactive by operating fairly and competitively in the market. By anticipating possible regulation earlier on in the technology development, a company will be more prepared to respond quickly. Companies can benefit from the interaction of government and a technology, they just need to be prepared and proactive in the process.

GPS (Global Positioning System) is an example of a technology that was evolved from the original technology and been used in many different markets. In 1993, the U.S. Air Force launched the first network of 24 satellites, known as GPS. The GPS technology was created from a combination of engineering and scientific advances, specifically the atomic clock. The technical evolution of the atomic clock and the GPS follows the speciation patterns of emerging technologies, but the Government influence and regulation also played a huge part in the GPS product we use today.

GPS was originally designed by the Department of Defense strictly for military use. The companies that helped create the GPS technology recognized the huge potential in the commercial market, and finally the Pentagon allowed use of the technology in the commercial market. Use was allowed under a policy called “selective availability,” which meant that the military and other authorized users would be given the most accurate broadcast signals. The Pentagon also reserved the ability to interfere with any civilian signals if they so chose to.

In 1996 however, the White House decided to open up the higher level of GPS accuracy to everyone. The federal government also communicated their commitment to “providing GPS services for peaceful civil, commercial, and scientific use on a worldwide basis and free of charge.”

Now we can find some sort of GPS unit in a wide variety of devices – cell phones, wireless cards, car navigation systems, etc. One of the news articles we talked about was the Google Latitude system, which is a GPS application for your mobile phone or PC that shows your “friends” positions. This has caused concern over privacy issues, so I can't help but wonder if the government may step in again with some sort of privacy regulation or legislation?

http://www.beyonddiscovery.org/content/view.article.asp?a=458
www.google.com/latitude