This occurs when technology has developed new instruments which can profoundly affect scientific theories; or, technology has discovered new methods which require explanation through the development of new theories by scientists to explain occurrences.
The first pathway is exemplified by the invention of the telescope, which started the development of better astronomical instruments which made the old theory of the universe having the earth at its center so inexplicable that the idea of a sun-centered solar system became more realistic.
Interaction between science and technology has increased especially in the 20th century. It often takes the path from scientific knowledge resulting to practical devices. However, this path is often long, and can be subject to stops, starts and changes in direction. Thus, the flow of information in this case is not linear, but is non-linear or can take any direction or sub-directions.
Governments have in recent decades implemented measures designed to speed up the flow from scientific knowledge to technology. As an example, the automotive industry had been able to come up with theoretical developments within decades. In contrast and prior to government interventions, such developments may have taken centuries to develop. The minimal interaction between science and technology in the past can be attributed to the limited areas they work in, which also limited their chances of bumping into each other. As both expanded, this allowed them more contact with each other.
Industries are able to develop technologies to put theories into practical use and to aid in the development and production of products and commodities. As technologies improve, new applications are also discovered which may require explanations based on scientific knowledge. Thus, science produces new ideas or theories to explain occurrences or phenomena from technologies. The new theories and ideas produced by science or scientific knowledge would again bring about the development of new devices and tools for practical application in industries.
Thus, the interaction between science and technology results in a continuous and dynamic cycle of development among the two elements. This benefits industries through the continuous generation of innovations. The more dynamic the interaction between science and technology within an industry, the more innovative that industry becomes. And establishments or businesses within that industry who have better and faster access to information about innovations, scientific knowledge and technologies, often have the winning edge over the competition. Innovation through the interactions of science and technology have also become faster. It used to be that innovation meant the slow build-up of changes passed along from one generation to another. It used to be that changes were done using the "cut and tried" method, wherein an innovation is developed and tried to find out if it works. This is not only slow but also expensive. It is faster and less expensive if to already have an idea on how the change or innovation would result to, even before it is made. However, this method requires a theory. Thus, science is needed in this faster and cheaper method of arriving at change.
2. For a firm, diversification into new product markets is constrained