UNIT 5:

TECHNOLOGY & ENERGY

MANAGEMENT
Technology
• Technology is the application of scientific knowledge for
practical purposes.
• It translate the scientific knowledge into method of production.
• When relatively primitive technology is used in the production
system, the technology is referred to as labor-intensive.
• A highly advance technology on the other hand, is generally
referred to as capital intensive.
• Technology largely dictates the success of modern
organization
• Investment in technology is one of the most crucial decisions
of the manager.
• All types of business organization from small to large use
technology in their operations for enhancing their productivity.
 Components of technology
1. Levels of technology(degree of sophistication of the technology)
a. Manual
• Simplest form of technology
• Low production. High cost of production
b. Mechanical technology
• Machine based
• High production and low cost of production
• High capacity utilization, high investment, high maintenance cost.
c. Automated technology
• Self controlled machines
• High production
• Used by industries producing standardized products
• High investment
d. Computerized technology
• Uses computer based sophisticated machines
• Digital technology used
• Less worker requires
e. Robotized technology
• Uses robots instead of human
• Mostly used in hazardous conditions
• High productivity, superior quality
• Very high investment
2. Pace of technology (stage & speed of technological
changes)
• In Nepal it is very low
• Obsolete technology of other countries are used
3. Technology transfer
• MNCs and donor assisted projects are the major drivers of
technology transfer
4. Research and development budget
• R&D budget for technology adaptation, upgradation and
development
• R&D budget by government as well as private sector is quite low in
Nepal
Business & technology
• Business use technology to carry out their functions as
production, marketing and distribution, accounting,
warehousing, finance, HR, R&D efficiently and effectively.
• Without the growth of technology, the idea of globalization
wouldn’t have turned into reality.
• It expands the reach and efficiency of internal and
external business communication.
Impact of technology in Nepalese business
• Positive impact
1. Productivity(ratio between input and output)
2. Competitive advantage(low cost of production)
3. Innovation(translating ideas into goods and services for which
customers pay)
4. Increase in profit(high quality, low cost)
5. Customer value(through effective distribution)
• Negative impacts
1. Capital burden
2. Threat of quick replacement
3. Increase in cost(demands proper repair and maintenance)
4. Need of skilled manpower
Current status of technology
• Nepal is not found to take benefits of the global technological
advancements. The level of technology used by Nepalese
business sector is not satisfactory.
• Modern technology is capital incentive and most of the
organizations do not afford to invest in modern technology.
• The medium and small industries are still using indigenous
technology mostly imported form India.
• Nepalese organization are found weaker in selecting the
appropriate technology.
• The government spends very less budget in R & D.
• Most of the industrial units remain passively dependent on
imported low graded technology.
• Export is seen as an indicator of technological advancement.
However, Nepalese export products are mainly in the form of
raw materials and semi-finished goods.
• The Nepalese supply of technical manpower like electricians,
electric engineers, IT professionals is still below the required
level. In terms of enrollment in technical and professional fields
at the tertiary level, Nepal falls behind all its neighboring
countries.
• The service sectors in Nepal are found to adopt the latest
technology compared to manufacturing sectors.
• After liberalization, private sector has better access of modern
technology. However, the pace of technological development
is still slower than the expectation
Technology transfer issues
• According to foreign investment and technology transfer
act 1992, technology transfer means transfer of
technology made under an agreement between an
industry and a foreign investor on the following matters:
• Use of any technological right, specialization, formula,
process, patent, or technical know-how of foreign origin.
• Acquiring a foreign technical, consultancy, management
and marketing services.
Elements of technology transfer
• Need assessment
• Systematic examination of general SWOT of the proposed technology has to
be done.
• What will be the social cost? What kind of resources will be required? What are
the risk associated?
• Socio-cultural and environmental factors
• Practices and experiences of the intended users need to be considered.
• Characteristics and types of technology
• In terms of relative advantage, compatibility, complexity, trial ability,
• Economic/ financial resources
• If the cost of maintenance and operation exceeds what the intended nation can
afford, it becomes the burden even if technology have relative advantage and is
compatible.
• Timing
• Good timing is a valuable strategy for technology transfer
• Education, training and HR
• Best vehicle to technology transfer
• Communication channel
• Most transfer of technology involve people with different backgrounds,
such as country, culture, discipline and language. Therefore, learning to
overcome communication barriers is a prerequisite for successful
transfer
• Target group
• Change agent and opinion leaders are important elements in the transfer
of technology. It is important to establish some kind of connection with
them before introduction.
• Government and politics
• Successful technology transfer requires a coordinated approach between
the receiving government and the developer. Sometimes it is very costly
especially where administrative structure encourage corrupt practices.
• Infrastructure
• Facilities such as transportation, banking, school, colleges, research
institutions, telecommunication, encourages technology transfer as they
are crucial to sustain and develop core personnelmwho can ensure
continuity of the process of technology transfer.
Information Technology Policy, 2010
• Vision: “To place Nepal in the global map of IT within next 5
years.”
• Objectives:
• To make IT accessible to the general public and increase employment
through this means.
• To build a knowledge based society.
• To establish a knowledge based industries.
• Policy highlights:
1. To declare IT sector a priority sector
2. To develop one-window system for the development of IT.
3. To prioritize R&D in the field of IT
4. To promote internet facilities gradually to all VDCs
5. To encourage educational institutions and encourage domestic
and foreign training to fulfill the requirement of appropriate
manpower.
6. To computerize the system in all government offices and build
their websites for the flow of information.
 7. To encourage the use of computers in private sectors
8. To use IT to promote e-commerce, e-education, e-health
among others to establish National IT center
9. To establish a fund at the national level by mobilizing
resources from GoN, donor agencies and private sectors so
as to promote R&D.
10. To establish a venture capital fund with joint participation of
public and private sector
11. To include computer education in the curriculum starting
from the school level and broaden its scope,
12. To establish Nepal in the global market through the use of IT
13. To enact necessary laws for providing legal sanctions to the
use of IT.
Natural environment/ resources issues in Nepal
• Earlier environment and climate change issues were not a
matter of business of organization.
• However, today there is an immense pressure on every
industry to deal with natural environment/resources and
energy cautiously. This is the reason why businesses
today have started focusing on go-green and eco-friendly
strategies. This strategy can help the business to
differentiate itself from others.
• Natural resources should be used in a sustainable way.
Excessive use causes a number of environmental
problems.
• In recent years, environment pollution is increasing
• Reasons being urbanization, industrialization,
deforestation, population growth etc.
• Excessive use of pesticides has degraded the quality of
soil.
• There is a lack of awareness among farmers
• The government has been enacting different policies, laws and
programs, among them the environment protection Act 1997 is
the most comprehensive.
• However, it needs collective efforts of the government and
private sectors with the support of general people.
• Economic activity and environment are closely inter-linked.
• Nepal is known for its water resources.
• Forest constitutes another major natural resources
• Minerals potential lacks proper survey.(limestone, iron, zinc,
coal…)
• Nepal is rich in mineral resources but this sector lacks financial
and technical support and skilled manpower.
• Agricultural land is also the main natural resource including
crops, livestock, forestry…
• Nepal also has a very good network of wild life which is a very
good attraction for tourist
• Nepal is rich in human resources. However, due to low level of
skills and productivity, there is high unemployment and huge
number of population is migrating outside.
Energy: Situation in Nepal
• Energy is the most important resource for economic and social
progress.
• The condition of energy is not found to be in satisfactory state.
• Despite having high potential for generating energy through
abundant water resource, energy crisis is still faced, though
relatively less crisis now.
• In Nepal traditional sources of energy (firewood, agricultural
residues, cow dung) have dominance over energy consumption in
Nepal.
• Nepal is entirely dependent on other for commercial source of
energy, i.e. petroleum.
• It is a major source of foreign currency outflow from Nepal(one of
the reason for high trade deficit)
• Present demand of petroleum products is around 1.9 Million Ton and
annual growth is around 10%. Petroleum products have a share of
around 15% of total energy consumed in the country.(source: NOC)
• To meet the ever growing demand smoothly and reduce the
transportation cost, NOC and IOC are laying pipeline from
Motihari-Amlekhgunj in India and Nepal. Similar working discussion
is going on between IOC and NOC for laying LPG pipeline in future
endeavor.
Energy management issue in Nepal
• Nepal is a country endowed with high potential for
renewable energy resources like hydro, solar, wind,
biomass.
• Energy is the key input for technological, social, and
economic development of a nation.
1. Dominance of forestry sector
• Forest supplies more than 80% of total energy demand in Nepal,
so, it is necessary to develop alternative to meet energy demand
of rural population.
2. Far below exploitation of energy sources
• It is found that only a nominal portion of the real potential has
been explored and exploited. Political and policy instability are
some of the major issues.
3. High dependency on petroleum products
• Import is the only way to meet the demand of petroleum
products.
• Its demand, supply and price are all increasing day by day.
• Since 1975, the supply has increased by almost 75 folds.
• The demand of LPG is also increasing.
• NOC aims to increase the fuel storage capacity across the
country to 388,000 kilolitres from the existing 71,000 kilolitres
• NOC has increased storage capacity of petrol to 6,000
kilolitres from the existing 1,800 kilolitres at its Thankot depot.
• As per NOC, the daily normal demand of petrol in the Valley
stands at around 450 kilolitres. Based on this figure, the
6,000-kilolitre petrol storage capacity will be able to cater to
the domestic demand of petrol for at least 13 days.
4. Poor access of the rural people
• Access to electricity 90.7 %
• Access to electricity (% of rural population) 85.2 %
• Access to electricity (% of urban population) 94.5 %
5. Expensive energy
• Nepal has one of the most expensive power tariffs in the world
despite having the huge free water resources and favorable
condition for electricity generation.
• This is due to no other reason than the financial irregularities
continuously present in the government and corporate system
in Nepal.
• NEA has a monopoly in electricity industry so people are
compelled to pay high tariffs for electricity.