Effect of technology multiplier: A framework for analysis of innovation perspectives on production segment allocation

Abstract

In the realm of production systems, determining the optimal segment allocation remains a central concern. While several existing models address this issue, a significant gap remains as many overlook the critical role of innovation and lack a holistic perspective. This paper presents a model that emphasizes innovation capabilities and introduces the concept of a “Technology Multiplier” underscoring the compounding influence of technology and innovation on production segment allocation decisions. Within this work, we focus on preliminary studies to establish the “Technology Multiplier” concept employing an Analytical Hierarchy Process (AHP) with sensitivity analysis. The validity of our approach is demonstrated through four case studies from three industries, illustrating the relevance of our elaborated metrics for the concept of “Technology Multipliers”. In particular, a leading automotive company uses our findings to reach a more appropriate strategic decision aligned with innovation and production growth, compared to its previous decisions. These results not only demonstrate a robust fit with our proposed metrics but also indicate that our framework lays the foundation for further research on the “Technology Multiplier”, enriching the decision-making process for production segment allocation.