Technology is the driving force behind all the inventions and our day-to-day living. Technology refers to the body of scientific knowledge used in the production of goods or services while High-technology industries are those business entities that use the rapidly advancing scientific technology to boost the production numbers and quality attributes (Hill & Jones, pp.230). High-tech industries are the frontrunners in adopting new technologies and in some cases, also invent them.
According to some estimates, high-tech industry accounts for 12 to 15 percent of all economic activity in the United States with information technology being the biggest contributor. Along with the information technology sector, biotechnology, auto-manufactures and genetic engineering industry is pumping that much-needed money into American economic bloodstream.
Despite this rapid growth of high-tech industries, some companies earn a lot more money – and thus, have a big market share – as compared to their competitors.
The major reason for these differences is due to ownership issues. Some high-tech companies set the standards for business while others have to follow them. Unlike other industries where government agencies might intervene, the companies set standards in the high-tech world. If we look at the software industry, Intel Corp. enjoys supremacy in the microprocessors industry because it pioneered the manufacturing of microprocessors. Other companies can produce their own processors but have to follow the basic technical specifications set by Intel. Similarly, Microsoft has a firm control in the operating systems market.
There is a race in the high-tech industry to discover and standardize new technical processes. Dubbed as format wars, companies strive for innovation and invention to stay afloat in the cruel high-tech industry. One of the recent examples of format war was the tussle between HD-DVD and Blu-ray technology. Although HD-DVD has accepted defeat, high-tech industry experienced many repercussions during this battle (Ricker, 2008).
This search for new technologies – and the fight to own technical standards – is not a new phenomenon. The beginning of twentieth century ushered in the popularity of electricity. This, in turn, accelerated the growth of industrial process as industries relied heavily on electricity to improve and expand their production. Power industry in the period before World War II was the most high-tech industry at the time (Hirsh, pp. 114-15). Electricity brought in a revolution in manufacturing industry as electric motors replaced the steam engines. Similarly, electricity supply to homes and offices changed the lives of common people.
It was during that time that high-tech industries waged format wars of their own. Alternating current won over direct current for home supplies and countries adopted uniform telecommunication standards, among other things. High-tech industries have always dominated and they will continue doing so. They will also continue to fight format wars as this healthy phenomenon determines the quick future growth of an industry.
Hill, Charles W.L., and Jones, Gareth R. Strategic Management: An Integrated Approach, Sixth Edition. Houghton Mifflin Company, 2003.
Hirsh, Richard F. Technology and Transformation in the American Electric Utility Industry, 2003.
Ricker, Thomas. “Official: HD DVD dead and buried, format war is over”. Engadget. February 19, 2008. April 25, 2009. <http://www.engadget.com/2008/02/19/official-hd-dvd-dead-and-buried-format-war-is-over/>