Technology and innovation must be managed. That much is generally agreed upon by thoughtful management scholars and practitioners. But can the management of technology and innovation be taught and, if so, how? What concepts, techniques, tools, and management processes facilitate successful technological innovations? The answers to these and several related questions are of great interest to those academics and practitioners who concern themselves with organizations in which technology and innovation are vitally important. A quick overview of the evolution of Strategic Management of Technology and Innovation serves to underscore this.

In the United States, these concerns were heightened during the late 1970s and 1980s when it became clear that America no longer enjoyed supremacy as the world's technological superpower. Japan, Korea, Germany, and other European and Asian countries had made major inroads in industries once considered unassailable U.S. strongholds. At first it seemed that the challenge was mainly in the traditional, capital-intensive, heavy-manufacturing industries such as steel and automobiles. But during the 1980s and early 1990s, the challenge broadened to include machine tools, consumer electronics, many aspects of semiconductors, computers and telecommunications, aerospace, and some aspects of biotechnology.

Hayes and Abernathy's 1980 Harvard Business Review article, “Are We Managing Our Way to Economic Decline?” signaled the growing awareness in the United States that effective management of technological innovation was becoming a high-priority concern of U.S. business. During the 1980s and early 1990s, the importance of technological innovation for competitive advantage, at the level of both the firm and the country, spurred research and the development of related teaching materials. Literally hundreds of universities, through their schools of engineering or business (or both), introduced or substantially expanded the management of technology and innovation as part of their curriculum and degree programs, as this field became a major topic of broad interest to students, managers, and academics. During the decade of the nineties, the first two editions of Strategic Management of Technology and Innovation contributed to the development of courses on this subject in many schools.

In the background of these anxiety-provoking industrial developments and calls-to-arms, however, a new revolution was already in the making: the digital revolution. The first step in the digital revolution was the radical impact of microprocessor technology on computing and communications. The enormous growth of the demand for microprocessor-based personal computers created two new technological giants during the mid-1980s— Microsoft and Intel—that spawned entirely new ecosystems comprising thousands of new high-technology companies providing complementary products.

The second step was the growing importance during the 1990s of digital networks for enterprise data communications, which created yet another new giant— Cisco—and also spawned a new ecosystem of new high-technology companies. These developments, in turn, enabled the emergence and fast growth of still other major information-processing companies such as enterprise software giants Oracle, SAP, Siebel Systems, and BEA Systems among many others.

The third step in the digital revolution was the enormous growth since the mid-1990s of the Internet, which also created new ecosystems and literally thousands of new companies including new types of players such as FIRST PAGES Netscape, Yahoo!, e-Bay, and Amazon.com. It is no exaggeration to say that the Internet has affected all industrial and commercial activity and is a “mega-change” rivaling the magnitude of the impacts of the introductions of the automobile, electricity, and the telephone.

The digital revolution once again put the United States at the center of technological innovation. But it also increased the strategic importance of technology and innovation for just about every company. Around the time of the publication of the third edition of Strategic Management of Technology and Innovation, Intel's Chairman Andy Grove predicted that by 2005 only companies that had adopted the Internet as a mission-critical technology would survive. In 2003, his prediction seems likely to be correct, which means that all companies have to address technology as a critical element in their strategic management.

Since 2001, the so-called dot-com meltdown has eliminated myriad Internet-related companies, and its painful aftermath is still being felt throughout the economy in 2003. But it has also had the healthy consequence of reconfirming the relevance of fundamental business principles (e.g., profits matter after all) and the importance of sound strategic management. While this shakeout continues, the digitization of telecommunications equipment, the adoption of digital broadband technologies, and the growth of wireless data and voice telecommunications also continue to unfold.

Another revolution, the long-anticipated biotechnological revolution, seems imminent. Building on the first gene-splicing techniques developed in 1973, practical applications of cloning technologies have dramatically gained in power during the late 1990s. Such developments and the published documentation of the complete human genome promise to revolutionize the pharmaceutical and health-care industries during the first half of the twenty-first century.

The fifth edition of Strategic Management of Technology and Innovation continues to reflect and address these revolutionary developments. Like its predecessors, this new edition aims to achieve two important goals. The first is to provide continuity and refinements in terms of conceptual approach. We think this is important because it allows instructors to build further on their intellectual capital investments, and it deepens their ability to consider new developments and strategy questions in a framework of cumulative knowledge development.

The second goal is to provide change in terms of teaching material in order to reflect the evolving reality of technological innovation in leading companies and industries. We think this is important to help instructors maintain their courses up-to-date and to stimulate their own interest as well as that of their students. Consequently, although the fifth edition maintains and enhances the conceptual framework developed for the fourth edition, much of the teaching material for the fourth edition is new. Many new cases and industry notes that have been developed during 2004 –2007 are included in this edition.