Managing Innovation and Technology Transfer

Abstract

This report involves the analysis of the managing innovation and technology transfer theme. The theme that has been considered in this study is application, opportunities and challenges of Augmented Reality (AR) in business organisations. Accordingly, the study followed qualitative study based on secondary data to direct and guide the study. In addition, TAM and IDT have been employed to develop analytical framework for this study. The findings from the study demonstrated that AR has significant implications on the companies from different industries and sectors. It has several positive implications on the marketing and operation of the contemporary companies but it also has certain challenges and bottlenecks which has limited its robust application in the companies.

Introduction

Over the last few years, there has been a continuous advancement in new and innovative technologies. These technological advancements and innovations have a direct impact on the businesses as well as lives of the people. Accordingly, this report presents the analysis of the managing innovation and technology transfer theme. Correspondingly, the theme that this report focuses is the application, opportunities and challenges of Augmented Reality (AR) in business organisations.

AR is defined as an emerging technology which is rapidly reshaping the society and the business. AR is described as “combination of technologies that enable real-time mixing of computer-generated content with live video display” (Mekni & Lemieux, 2015, p. 205). According to Naaz & Sharma (2018) AR is closely related with VR or Virtual Reality techniques. However, it has been argued that AR is different from VR in a sense that VR enables the users to immerse completely in digital and artificial world but AR interact with VR to provide users with interactive experience of enhanced real-world environment (Naaz & Sharma, 2018; Roxo & Brito, 2018). The importance of AR for the businesses can be identified from the fact that many companies from different industries and sectors are adopting AR technology. In this regard, it has been noted that companies in entertainment industry, construction industry, tourism industry and e-commerce industry are rapidly adopting AR technology. AR is also used for marketing purpose and is ascertained to be disrupting the traditional marketing strategies (Naaz & Sharma, 2018; Roxo & Brito, 2018). However, currently its implementation is limited to few companies and it is at infancy stage. It is therefore more research is required to in the field to develop holistic understanding about its adoption, opportunities and challenges. Correspondingly, this study attempts to discuss the key determinant of technology acceptance of AR among the business organisations including challenges and opportunities of AR for business organisations.

Methodology

This study is qualitative research based on secondary data. The qualitative research method is considered in this study as it enables investigation of the research theme from multiple perspectives and helps develop a detailed understanding about the research theme (Creswell, 2013). In addition, this method is considered suitable for investigating complex event or phenomenon which is difficult to be quantified. Accordingly, this study attempts to investigate innovation theme that is adoption and challenges of AR for the business which can be argued to be complex theme (Bryman & Bell, 2007). It is because AR is an emerging technology and not many studies are being carried out in this field. Moreover, this study involves the use of non-statistical tools analyse and interpret the findings. Data relevant to this study are collected from secondary sources that include, articles, books and journals (Hox & Boeije, 2005). These data are then analysed using thematic analysis tool. The thematic analysis involves determining specific themes relative the topic investigated in the study and then interpreting findings based on the identified themes.

Analytical Framework

In order to develop analytical framework two important theories of innovation have been considered in this study. These two theories include Technology Acceptance Model (TAM) and Innovation Diffusion Theory (IDT).

Technology Acceptance Model (TAM)

TAM was proposed by Davis (1986) and is one of the most widely applied model for explaining the technology acceptance behaviour of the users. This model is derived from social psychology theory and theory of reasoned action (TRA). Accordingly, Davis (1986) identified various factors to influence the user’s behavioural intention to use new technology such as perceived usefulness, perceived ease of use, and attitude. Accordingly, this model identified that user’s behavioural intention to use new technology leads to actual use of the technology. Later Venkatesh & Davis (2000) proposed extension of TAM in which the authors identified general determinants of perceived usefulness and perceived ease of use. These general determinants of the extended TAM included variables such as social influence process like subjective norm, image and voluntarism, and cognitive instrumental process which consisted output quality, and job relevance. However, the extended TAM excluded actual technology use because it was viewed as weak predictors of the user’s behavioural intention to use new technology (Venkatesh & Bala, 2008).

Diffusion of Innovation Theory and TAM

Another theory which is identified to be relevant in this study is innovation diffusion theory (IDT). IDT is another popular theory of innovation that was proposed by Rogers (2005). Over the last few years, the IDT has emerged as one of the most widely used theory in the field of technology and innovation. The IDT encompasses five important innovation characteristics namely relative advantage, compatibility, complexity, trialability and observables (Kolodinsky et al., 2004). Notably, these characteristics of innovation are applied to explain the user adoption of new technology and innovation, and decision making process of the users. In addition, these characteristics are applied to predict the implementation of new technology an innovation and explain the interactions between these variables in influencing the user’s behaviour. The key concept of this theory relates with the process by which innovation is communicated or spread through specified channels.

Nonetheless, previous research studies have demonstrated that only three characteristics including relative advantage, compatibility, and complexity have significant impact on the adoption of innovation. In addition, the innovation characteristics of relative advantage are similar to perceived usefulness variable suggested by Davis (1986). On the other hand, the innovation characteristics of compatibility is claimed to be similar to the perceived ease of use. Additionally, compatibility characteristics of innovation is related the extent to which the innovation is perceived by the users to be consistent with the potential values and needs of the users.

It can be identified from the exploration of the TAM and IDT that both theories are similar across many aspects and many scholars have argued that variables included in the TAM is subset of characteristics of innovation. In addition, some scholars have also stressed on the perceived risk and cost to play important role in the adoption of innovation such as AR by the users (Wu & Wang, 2005).

Based on the review of the review of the theories and models, analytical framework for this study has been developed. Accordingly, the research model for this study involves the integration of TAM and IDT and one additional variable that include perceived risk. More specifically, the analytical framework for this study include variables, perceived usefulness, behavioural intention to use from TAM and complexity and compatibility along with cost and perceived risk. The figure 1.0 below indicates the analytical framework followed in this study.

Findings

Application of Analytical Framework to AR

Perceived usefulness

According to Davis (1989) perceived usefulness relates with the extent tow high the potential users of new and innovative technology believe that the use of the particular technology would contribute in enhancing the personae of the company. With respect to AR, it has been ascertained that the AR technology is useful across various sectors and industries. In this regard, AR technology is observed to be highly useful for marketing of products and services. Accordingly, companies in the automotive industry are ascertained to sue AR for the advertisement purpose. Notably, some companies in the automotive industry have printed special flyers which are automatically recognised by webcams which produce 3D model of cars that are being advertised. At the same time, the companies in the e-commerce industry are ascertained to use AR technology has been immense popularity among the companies in the e-commerce industry. Many e-commerce companies are making use of AR to influence the purchase decision of the target customers. Accordingly, the 3D augmentation of the product offered by the e-commerce companies is observed to positively influence the consumer purchase intention for the specific product (Kannaiah & Shanthi, 2015).

Complexity

Complexity deals with the extent to which an innovation is perceived difficult and challenging to apply. It has been stated that when the complexity of innovation decreases the adoption and diffusion of innovation increases (Gourville, 2006). As noted earlier, AR is an emerging technology and there are still many areas which are still not fully explored. At the same time, there is few research conducted on AR domain which further limits the understanding about the AR technology. Currently, installation of AR presents complex tasks for the companies particularly due to the fact it is a new technology and its use is still at early stage. In addition, the maintenance of AR system in companies is currently perceived to be complex task (Porcelli et al., 2013).

Compatibility

Compatibility is associated with the extent to which an innovation fit into existing values and the needs of the potential adopter organisation (Gourville, 2006). Over the last few years, different types of information system have evolved. Today, the businesses are identified to use many of the information system for different purposes. Correspondingly, many business organisations have built a team of highly skilled technicians and employees who have developed considerable experience in the installation and maintenance of the existing system (Al-Mamary et al., 2014). Hence, AR which is based on computer-generated content can be argued to be highly compatible in the contemporary business organisations.

Cost

The element of cost relates with cost associated with the implementation of the innovation. AR is an emerging technology and its cost of implementation varies based on the industries and the company. Accordingly, the cost of implementation is generally high for the companies engaged in the construction industry. Accordingly, for a large company the cost associated with the implementation may include technology relates costs that may involve hardware equipment costs, software cost, infrastructure cost, installation and maintenance cost among others. In addition, the implementation of AR may also involve posts such as training of personnel, salaries and application development cost. At the same time, the implementation may result in organisational cost as it may create requirement for introducing changes in the existing management and processes in the organisation (Oesterreich & Teuteberg, 2017).

Perceived Risk

Perceived risk deals with the potential risk associated with the implementation of innovation in a business or the adverse outcome that may result from the implementation of innovation. AR is a new and innovative technology. Its application in the companies is at infancy stage, which implies that there lacks any empirical study which explicitly delineates the benefits and impact of AR on the business process. Correspondingly, the application of AR is risky because it is not being fully tested and not much is known about its effectiveness in solving the problems faced by the contemporary business companies (Martínez et al., 2014).

Behavioural Intention to use

The inclination of potential users to implement the innovation is termed as behavioural intention to use. The above stated variables that include perceived usefulness, complexity, computability, cost and perceived risk have considerable impact on the behavioural intention to use (Venkatesh & Bala, 2008). Accordingly, it has been ascertained from the above that AR is highly useful and is as compatible. Besides, the cost of AR implementation is high and moderately complex. However, despite the risks associated with AR implementation, the AR as an innovative technology offers significant advantages for the companies across different industries which are more likely to encourage these companies to adopt AR technology.

Implications of AR on Global Business

Opportunities

AR is an emerging technology and its application in the business at early phase. However, it is anticipated that the application of AR offers a significant opportunities and benefits for the contemporary business organisations. It is therefore, the application of AR is growing across different areas of the business (Roxo & Brito, 2018). The growing use of AR is further supported by new system and technologies such as IOS and Android. It is widely anticipated that the application of AR technology would change the perceptions of the people the way they look at objects. There are numbers of areas and sectors where the AR technology is gaining considerable popularity and use. One of the most prominent areas where AR has significant implication is related with marketing of products and services (Kiryakova et al., 2017. Several studies in the recent years have demonstrated that the application of AR in the marketing field will bring considerable changes in the way currently the companies market their products and services. More specifically, the e-commerce companies such as Amazon and other online shopping stores are ascertained to be significantly benefitted by the application of AR technology. Currently, the online shoppers are not able to feel, touch and smell the products that are offered by e-commerce companies. However, the application of AR is argued to make the marketing of products more interactive where customer interacts with the product and brand. It is further anticipated that it will lead to improved online shopping experience as well as positively influence the purchase behaviour of the consumers (Mauroner & Best, 2016).

In addition, the AR technology is ascertained to have a significant implication on the companies operating in the tourism industry. Accordingly, AR technology is a considered to be suitable for visualisation of spatial environment, which is anticipated to help companies frame their tourism plans and policies. It is also considered to provide effective tool for communicating with customers in the tourism industry. AR is considered to have significant impact on the planning and management of the tourist destination. It is strongly believed that the application of AR has the potential to revolutionise the promotion and selling of tourism. It is argued that the tourists, who are interested in exploring a particular destination can make better decision using the information obtained from the AR, which is further claimed to improve their satisfaction while improving the revenue generation capabilities of the companies in the travel and tourism industry (Guttentag, 2010).

The application of AR in construction industry is also gaining immense importance. AR in construction industry has significant implications. AR is identified to have significant impact on scheduling element of the construction of projects. The visualization feature of AR is argued to greatly help in safety scheduling. AR is claimed to have considerable impact on quality and defect management. Notably, the application of AR by the construction companies helps them to identify defects that are difficult to detect using traditional techniques which contributes in enhancing the construction project quality significantly (Ahmed, 2019).

Challenges and Mitigation

As noted above the application of AR has significant positive implications on the companies across different industries. However, there are also challenges and bottlenecks related to AR and its application in the companies. In this regard, one of the major challenges is that AR is continuously evolving and there is no standard for AR applications. It has been argued that creation of all-purpose standard for AR is thus a challenging task. The majority of AR applications being applied across different companies and sectors are at prototype level, which limits its uses. In order to overcome these challenge, more research and tools supporting AR are required to be developed (Martínez et al., 2014). Another major challenge which has limited its adoption and diffusion across the industries is related with lack of accuracy. It has been observed that within AR field, there is lack of alignment accuracy and is characterised by high algorithms’ complexity, which is viewed to limit the robust use of AR technology. Compatibility has also emerged as major challenge for some companies planning to apply AR. Even though the contemporary organisations today have well-developed IT infrastructure but the currently available technologies and devices are still at developmental phase which limits the effectiveness of AR. Besides, AR is a new technology and success of this technology is largely based on the social acceptance. However, for the companies it is difficult to product the social acceptance of AR (Martínez et al., 2014)

Apart from above stated problems and challenges, there also is a huge financial risks for the companies planning to apply AR. The financial risk for AR can be argued to be related with the social acceptance factors for AR. Notably, if there is low social acceptance for AR, it can lead to huge monetary loss for the companies that have investigated considerable among the development and integration of AR in their business (Alimamy et al., 2014). In addition, maintenance of AR in the current situation can also be challenging as not much is known about AR (Lamberti et al., 2014). In order to overcome this challenges and problems, the companies in the current environment needs to develop organisation culture and climate where views of every individuals is respected and values so that they feel motivates to share their experience and expertise to further improve the AR features. Companies should invest on training and development of the employees for the effective maintenance of the implemented AR to avail the benefits of the AR.

Conclusion

This report presented the analysis of the managing innovation and technology transfer theme. The theme that this study focuses is the application, opportunities and challenges of Augmented Reality (AR) in business organisations. The study involved the use of TAM and IDT to develop research model for this study. The findings from the study demonstrated that the AR has considerable implications on the companies and business across different sectors and industries. In this regard, the most considerable impact of AR today is identified to be related with the marketing aspect. Accordingly, application of AR has significant impact on the companies in e-commerce industry, which makes the marketing of product more interactive through the use of virtual visualisation which in turn positively influences the consumer purchase intention. Additionally, the findings also demonstrated AR has the capacity to improve the performance of the tourism industry by helping the tourist select most suitable travel destination. Recently, AR is also applied in construction industry for schedule monitoring and fore quality management and defect detection.

However, there are also certain challenges associated with the application of AR. Accordingly, the AR is still evolving and many of the AR devices are prototype, which has limited its widespread adoption. AR also lack of alignment accuracy and is characterised by high algorithms’ complexity. Besides, maintained of AR technology is a major challenge for the companies. Nonetheless, the companies can overcome these challenges by continuously improving exiting AR technology which will require these companies to make investment in R&D. Furthermore, improving the skills and expertise of the employees through training and development ensure smooth installation of AR system as well as ensure proper maintenance of the system.

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