Technological factors

Technological environment means the development in the field of technology which affects business by new inventions of productions and other improvements in techniques to perform the business work. Technology is changing fastly in this 21st century. All work is done online and business shops are using machinery at high level. This technological revolution means a faster exchange of information beneficial for businesses as they can react quickly to changes within their operating environment. Those businesses which are slow to react will fall at the first few hurdles. Technological factors that can be considered under this are: 1. Govt. research spending Industry focus on technological effort New inventions and development Rate of technology transfer Life cycle and speed of technological obsolescence Energy use and costs Changes in information technology Govt. research spending: Ministry of Steel was not implementing any plan scheme till end of 10th Plan (2002-07). In the 11th Plan (2007-12), a new scheme for promotion of Research & Development in Iron and Steel sector was included with a budgetary provision of Rs. 118.00 crore for promotion of research & development in the domestic iron and steel sector. The scheme was formally approved for implementation on 23.01.2009. Under the scheme, a total of eight (8) R& D project proposals with a total outlay of Rs. 111.11 crore have been approved upto Dec10. (steel.nic.in) 2. Development: Indian steel industry which came late in 1950s and 1960s adopted technologies prevailing at that point of time in collaboration with major technology suppliers from Europe, Russia, USA etc. Indian steel industry has been much behind globally in terms of technology infusion. RSP was one of the first steel plant in Asia to adopt LD process in late 50s itself. COREX was another new technology brought by JSW much earlier. However, pace of replacement of technology which became old and obsolete consuming very high energy viz. open hearth, ingot casting and several others remained slow. Some steel plants are still continuing with this process for their part of production. Major reason behind it is the need of high capital investment and also cautious approach, steel market being cyclic in nature. 3. Technology transfer: Developing countries cannot always afford to develop their own technologies. They need import technology from developed nations. Since late 1950s, large number of steel producers in India went for technical collaborations with the world majors. Many public sector steel plants were built with collaboration from countries like United Kingdom, Germany and erstwhile USSR. In earlier years, many of these plants faced problems in their collaboration projects. Due to elements of secrecy and other reasons, India had to deviate from what considered suitable by the countries aiding the project. As for example, Indian Iron and Steel Company (collaboration with British, Soviet and Japanese firms), Rourkela (collaboration with West Germany), and Bokaro (collaboration with Russia)

had many teething problems during execution of the projects [Krishnamurthy 1987]. With the gradual adoption of technology for iron and steel making by Indian companies, these bottlenecks have reduced. Most of the state owned plants and some private ones have gone for large capital-intensive modernisation programmes, mostly with foreign collaborations. 4. Energy use: The steel industry, by its very nature, is highly energy intensive with many heating and cooling, melting and solidification cycles. Steel industry is the largest consumer of energy among all industrial sectors. It consumes about 10% of the electricity and 27% of the coal used by Indian industries. Energy cost contributes nearly 30-35% of steel sectors production cost. Coaking coal accounts for 65-85% of primary source of energy. Iron making through BF accounts nearly 70% of the total energy consumed by steel industry. Major steel plants and energy consumption levels Crude steel Company BSP DSP RSP BSL ISP SAIL Tata steel RINL ESSAR ISPAT JSW Total (Steel Authority of India) 08-09(gcal/tcs) 6.5 6.5 7.09 6.73 8.27 6.74 6.59 6.77 5.81 5.21 6.70 6.5-7.0