Technology is the making, modification, usage, and knowledge of tools, machines, techniques, crafts, systems, and methods of organization, in order to solve a problem, improve a preexisting solution to a problem, achieve a goal, handle an applied input/output relation or perform a specific function. It can also refer to the collection of such tools, including machinery, modifications, arrangements, and procedures. Technologies significantly affect humans as well as other animal species' ability to control and adapt to their natural environments. The term can either be applied generally or to specific areas: examples include construction technology, medical technology, and information technology. Both definitions revolve around the same thing - application and usage.

Technology is an enabler

Many people mistakenly believe it is the technology that drives innovation. Yet from the definitions above, that is clearly not the case. It is an opportunity that defines innovation and technology which enables innovation. Think of the classic "Build a better mousetrap" example taught in most business schools. You might have the technology to build a better mousetrap, but if you have no mice or the old mousetrap works well, there is no opportunity and then the technology to build a better one becomes irrelevant. On the other hand, if you are overrun with mice then the opportunity exists to innovate a product using your technology.

Another example, one with which I am intimately familiar, are consumer electronics startup companies. I've been associated with both those that succeeded and those that failed. Each possessed unique leading-edge technologies. The difference was an opportunity. Those that failed could not find the opportunity to develop a meaningful innovation using their technology. In fact, to survive, these companies had to morph oftentimes into something totally different and if they were lucky they could take advantage of derivatives of their original technology. More often than not, the original technology wound up in the scrap heap. Technology, thus, is an enabler whose ultimate value proposition is to make improvements to our lives. In order to be relevant, it needs to be used to create innovations that are driven by opportunity.

Technology as a competitive advantage?

Many companies list technology as one of their competitive advantages. Is this valid? In some cases yes, but In most cases no. Technology develops along two paths - an evolutionary path and a revolutionary path. A revolutionary technology is one that enables new industries or enables solutions to problems that were previously not possible. Semiconductor technology is a good example. Not only did it spawn new industries and products, but it spawned other revolutionary technologies - transistor technology, integrated circuit technology, microprocessor technology. All of which provide many of the products and services we consume today. But is semiconductor technology a competitive advantage? Looking at the number of semiconductor companies that exist today (with new ones forming every day), I'd say not. How about microprocessor technology? Again, no. Lots of microprocessor companies out there. How about quad-core microprocessor technology? Not as many companies, but you have Intel, AMD, ARM, and a host of companies building custom quad-core processors (Apple, Samsung, Qualcomm, etc). So again, not much of competitive advantage. Competition from competing technologies and easy access to IP mitigates the perceived competitive advantage of any particular technology. Android vs iOS is a good example of how this works. Both operating systems are derivatives of UNIX. Apple used their technology to introduce iOS and gained an early market advantage. However, Google, utilizing their variant of Unix (a competing technology), caught up relatively quickly. The reasons for this lie not in the underlying technology, but in how the products made possible by those technologies were brought to market (free vs. walled garden, etc.) and the differences in the strategic visions of each company.

Evolutionary technology is one that incrementally builds upon the base of revolutionary technology. But by it's very nature, the incremental change is easier for a competitor to match or leapfrog. Take for example wireless cellphone technology. Company V introduced 4G products prior to Company A and while it may have had a short-term advantage, as soon as Company A introduced their 4G products, the advantage due to technology disappeared. The consumer went back to choosing Company A or Company V based on price, service, coverage, whatever, but not based on technology. Thus technology might have been relevant in the short term, but in the long term, became irrelevant.