| Abstract | Developing countries throughout the world are currently expanding their
electricity generation capacity rapidly. The electricity industry is also undergoing
significant structural changes. In many regions of the world it is being transformed from a
monolithic state owned enterprise into a number of small public companies. Improving
plant availability, increasing operating efficiency, reducing pollution, commissioning
large utility projects without cost and time overrun, implementing demand side
management techniques and providing a high level of guaranteed service are some of the
technological challenges that electricity utilities are facing to improve their
competitiveness.
In _spite of the crucial role of technological capability in enhancing the
competitiveness of the firm, there have been only few systematic studies that have looked
at technological capability issues in depth. Existing studies have also failed to provide a
comprehensive definition of technological capability and an approach for identifying the
technological capability needs of the firm. Fmihermore, these studies are also not
prescriptive in the sense that they fail to identify what steps management must pursue to
enhance the technological capability of an organization. In the electricity utility industry
there are many studies relating to "integrated" project management that cover matters of
organization, finance, human resomces, etc. without explicit consideration of technology
management issues. It is well known that the poor performance of many electricity
utilities is due to their low level of technological capability. Thus, in the rapidly changing
electricity utility business environment, there is a need for the utilities to assess their
existing level of technological capabilities and take appropriate steps to enhance them.
Based on the synthesis of the work that has been done thus far, and a recognition
of the weaknesses in them, a comprehensive definition of technological capability has
been suggested. This definition views technological capability as a set of functional
abilities reflected in the firm's performance through various technological activities and
whose ultimate purpose is firm level value management. Furthermore, it classifies
technological capabilities into three major categories. The first, called strategic
technological capabilities, comprises creation, design and engineering, and construction
capabilities. The second, called tactical technological capabilities, includes production,
marketing and selling, and servicing capabilities. The last, referred to as supplementary
technological capabilities, consists of acquiring and suppotiive capability (training,
strategic planning, information support and networking, technology selling, and safety
and security capabilities). The first two directly deal with value addition activities
(creation, design and engineering, construction, production, marketing and selling, and
servicing) while the third supports the value addition stages (strategic and tactical). In
addition, another capability, which is not technological, called steering capability, is
included to emphasize the fact that, without it, technological capabilities cannot be
effectively deployed and upgraded.
iii
This classification of technological capabilities has been used to study the
technological capability profile of firms in the electricity sector. Firms in this sector are
involved primarily in one or more value addition activities. Based on their likely mix of
value addition activities, ten typologies of electricity utility companies have been
developed. It has been shown that while it is a prerequisite for these companies to have
the required tactical and/or strategic technological capability, it is imperative that all of
them must possess an adequate level of supplementary and steering capabilities.
Development of a definition of technological capability and typologies based on
technological capability is the first step for technological capability assessment.
Traditionally, many studies dealing with science and technology indicators mainly
emphasize the measurement of technology, not technological capability. In this study a
number of input indicators, output indicators, productivity indicators, quality indicators,
and effectiveness indicators have been therefore developed for technological capability
assessment. These indicators make use of both qualitative and quantitative values since a
purely objective assessment of technological capability is extremely difficult because of
the existence and interaction of many subjective factors. For all qualitative indicators and
quantitative indicators appropriate rating schemes based on industry norms have been
developed. Detailed discussions were carried out with managers at the Electricity
Generating Authority of Thailand (EGAT), and the Electricite De France (EDF) to test
the relevance of the developed indicators. A deliberate attempt has been made to ensure
that the data needed for indicator computation is easily available or can be easily
collected. Yet, it is possible that if an outsider uses this approach to study a utility, some
of the information that may be considered confidential may not be made available by the
organization. However, if a firm wishes to carry out an analysis for their own planning
purposes, data limitations is unlikely to be a barrier for the use of the methodology.
Using the proposed methodology, studies were carried out at the Electricity
generating Authority of Thailand (EGAT) and the Electricite De France (EDF). For
approximately 10% of the indicators, data could not be obtained from both EGAT and
EDF due to reasons of confidentiality and/or lack of data availability within the company.
In some instances there is a need for reorganizing the data management system of both
the companies.
The case study at EDF showed that it has a high level of creation, marketing and
selling, service, acquisitive, supportive, and steering capabilities. Its design and
engineering; and production capability was found to be between medium and high level.
Its construction capability may be rated as falling between low and medium level. The
study at EGAT showed that its construction capability, design and engineering capability,
and acquisitive capability are at low to medium level. Its production capability, and
marketing and selling capability are at high level. The company's supportive capability
and steering capability may be rated as falling between medium and high level. Based on
these findings several strategic issues have been highlighted in the case of EDF and
EGAT.
iv
The technological capability assessment case studies at EDF and EGAT have
illustrated the application of the developed methodology and have also shown that the
findings can lead to the generation of recommendations for enhancing technological
capability. In addition, the two case studies have also brought out important endogenous
and exogenous factors which contribute to the present level of technological capability.
The factors include: technology used in the company; company culture; organization size;
company strategy; the level of learning; intelligence gathering activities; size of the
economy and growth rate; financial and fiscal policies of government; and factor market
conditions.
Technological capability assessment is not an end in itself. It provides critical
information to help a firm make strategic decisions. The methodology developed in this
research can be used in analyzing a company's strengths and weaknesses with respect to
its technological capability. The study can also be used for benchmarking purposes.
Through benchmarking, an organization can identify the technological capability gap it
has with respect to a state-of-the-art firm. This gap can provide an indication of what a
firm needs to do to enhance its technological capability to become more competitive. A
possible approach for technological capability enhancement has been suggested in this
study. Finally, the study can be utilized to provide inputs for planning diversification,
divestment, mergers and acquisition, and technology transfer. The study also
recommends a procedure for implementing a technological capability assessment scheme
at the firm level. |