Post on 09-Jun-2020
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
International Competitiveness and Innovation
Topic 05: Knowledge and Technology Sourcing
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
S04
S05
S06
S07
Topic 01: Introduction Topic 02: What is Innovation and Why does it Matter?
Topic 03: Managing Capabilities in the Firm Topic 04: Design and Selection Technology Strategies
Topic 05: Knowledge and Technology Sourcing Topic 06: Managing Collaborations and Alliances
Topic 07: The Role of IPR in Protecting Innovations Topic 08: Open Innovation
Topic 09: Sectoral Patterns of Innovations Topic 10: Nations and Innovation Capacity
Topic 11: Public Policy for Promoting Innovation and Competitiveness Topic 12: Globalization of Research and Technology
Topic 13: MNCs and their Global Research and Development Operations Topic 14: International Transfer of Knowledge and Technology
S01 Topic 01: Introduction Topic 02: What is Innovation and Why does it Matter?
Topic 03: Managing Capabilities in the Firm Topic 04: Design and Selection Technology Strategies
Topic 05: Knowledge and Technology Sourcing Topic 06: Managing Collaborations and Alliances
Topic 07: The Role of IPR in Protecting Innovations Topic 08: Open Innovation
Topic 09: Sectoral Patterns of Innovations Topic 10: Nations and Innovation Capacity
Topic 11: Public Policy for Promoting Innovation and Competitiveness Topic 12: Globalization of Research and Technology
Topic 13: MNCs and their Global Research and Development Operations Topic 14: International Transfer of Knowledge and Technology
seminar sessions outline
S02
agenda
S03
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
agenda
Part 1 .….….….….….….….….….…..changing face of R&D ………..……………………………………………trends …………….…………….knowledge base / boundaries ……………………….….…………………time horizons …………………………………………….R&D structure
Part 2 ……..org structure and research and development ………..………………………………research networks …………….…….traditional R&D versus network R&D …………………………………research network nodes …………………………………………….R&D structure
Part 1 .….….….….….….….….….…..changing face of R&D ………..……………………………………………trends …………….…………….knowledge base / boundaries ……………………….….…………………time horizons …………………………………………….R&D structure
Part 2 ……..org structure and research and development ………..………………………………research networks …………….…….traditional R&D versus network R&D …………………………………research network nodes …………………………………………….R&D structure
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
part 1: trends | knowledge base / boundaries | time horizons
KNOWLEDGE
Trend towards Seeking External Sources of Knowledge
Firms increasingly acknowledge that it is difficult to create and exploit technological capabilities on their own.
Thus there is a widespread trend towards acquiring and utilizing external sources of knowledge and technology.
An increasing proportion of innovations are produced through combinations of capabilities located in other firms and institutions.
Across many sectors, a company’s competitiveness now depends on effective access to, and use of, sources of technological knowledge and capabilities beyond its boundaries.
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
part 1: trends | knowledge base / boundaries | time horizons
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
Knowledge Base as Asset There is a growing recognition that an organization's knowledge base is a valuable company asset and that enlarging that knowledge base and improving its use can contribute to the competitiveness of the firm.
Traditional Approach Focus on managing and measuring knowledge use within the firm
Emerging Approach Explore how companies can access know-how and experience from outside the organization and effectively import and absorb it
Critical Need To develop the capability for learning both how and what to learn through external sources (Powell, 1998).
part 1: trends | knowledge base / boundaries | time horizons
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
What is “Knowledge”? Many firms have problems with the concept of a knowledge.
Definition by Goal (i.e. strategic knowledge is what helps us with…) • maintaining future competitiveness
• maintaining existing core competencies • maintaining existing capabilities of the firm. Ultimately, the choice between in-house and external R&T is about these three things.
part 1: trends | knowledge base / boundaries | time horizons
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
Downside of External Sources
Care must be taken when emphasizing the • benefits to firms of such trends towards R&D and technical outsourcing • implications of such a shift in terms of in-house R&T effort.
Risks include • firms over-reaching themselves in their desire to decentralize and
outsource R&D (i.e. problems managing and controlling external sources) • firms weakening their core technological competencies
Indeed, it seems that current literature tends to give a rather positive image of external research links, even though there are good reasons against co-operation.
Mowery (1984, p. 52) has highlighted the British reliance on the external contracting of R&D and ‘market’ mechanisms as a key factor hampering innovation and expert performance amongst British firms before 1950. This is a stern warning for us in Singapore, who also outsource R&D.
part 1: trends | knowledge base / boundaries | time horizons
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
Checking the Assumptions
It is important to note that …
an increase in external outsourcing of research and technical activity
does not guarantee an equal decline of in-house R&D activity.
Thus, Mowery (1983, p. 369), has noted that
‘rather than functioning as substitutes,
the independent and in-house research laboratories were
complements during this period,
exhibiting a division of labor
in the performance of tasks.
part 1: trends | knowledge base / boundaries | time horizons
external
internal
external internal
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
External Complimenting Internal R&T A new era in R&T competencies and collaboration is emerging.
Companies seek a more balanced and holistic approach to R&T.
Fundamental factors for this shift centers on changes in the: • the nature of R&D and technical work
• new collaborative & institutional arrangements of innovation
• the emergence of an ‘R&T market’ (in an information economy, we must be able to trade easily in knowledge)
• the macro innovation environment, associated with industry and technology life cycles.
part 1: trends | knowledge base / boundaries | time horizons
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
Effects of Timescale
A key, but largely unexplored issue for firms is
• how the time horizon affects technology and knowledge sourcing relationships
• how this issue is linked to the long term technological and strategic trajectory of the firm.
There will be significant differences in technology sourcing requirements and conditions according to timescale.
In particular, knowledge and technologies are sought by the firm to augment its current technology base and providing additional ‘external capabilities’ which will hopefully align with future market requirements.
part 1: trends | knowledge base / boundaries | time horizons
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
Technological Sourcing and Time Horizons
part 1: trends | knowledge base / boundaries | time horizons
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
agenda
Part 1 .….….….….….….….….….…..changing face of R&D ………..……………………………………………trends …………….…………….knowledge base / boundaries ……………………….….…………………time horizons …………………………………………….R&D structure
Part 2 ……..org structure and research and development ………..………………………………research networks …………….…….traditional R&D versus network R&D …………………………………research network nodes …………………………………………….R&D structure
Part 1 .….….….….….….….….….…..changing face of R&D ………..……………………………………………trends …………….…………….knowledge base / boundaries ……………………….….…………………time horizons …………………………………………….R&D structure
Part 2 ……..org structure and research and development ………..………………………………research networks …………….…….traditional R&D versus network R&D …………………………………research network nodes …………………………………………….R&D structure
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
part 2: networks | comparison to trad | forms | structures
DEMAND R&D
The development of research networks
• Maturity of Info-Communication technologies and outsourcing/partnering contracts and SLA’s and management skills
• Increasing market demands (speed, complexity-convergence, long-tail mass customization)
• Expense and knowledge/skill intensity of research (in each convergent platform) given the reduced role of governments
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
Increase supply-chain-specific aspects of tech evolution
Increase firm-specific aspects of tech evolution
Increase speed to market and reduce manufacturing and R&D costs (and sunk investments in fast-moving world)
Embed new areas of knowledge into org
Increased risks, but share between more parties
Reduce risks and uncertainty
Gain synergies outside of your core competence in tech, marketing, distribution, etc
Increase control over rate an direction of technological change
R&D Network In-house R&D
traditional versus network R&D
part 2: networks | comparison to trad | forms | structures
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
main forms of research networks
University-industry partnerships • Growing in importance • Depends on size of firm, industry, and partners • Issues w/commercialization of basic research • Spin-offs
Research Consortia (multi-firm) • Extremely political and strategic
Public Sector Research Laboratories • Good for standards setting or
deep blue skies research
part 2: networks | comparison to trad | forms | structures
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
main forms of research networks (continued)
• Contract Research Organizations
• Joint Ventures
• Equity and Share investments
• Supply Chain and Customer Relationships
• Outsourcing
• Licensing
part 2: networks | comparison to trad | forms | structures
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
Which is right for my firm?
part 2: networks | comparison to trad | forms | structures
Universities
Research Consortia
Outsourcing
Licensing
Suppliers/ Customers
Contract Research
Alliances and Joint Ventures
PSR Labs
Mergers & Acquisitions
Equity in New Start-Ups
Technology Transfer
Others
You seek a good “mix” amongst them all
R&D
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
Traditional research and development structure
Managing Director
R&D Dept Production Dept Marketing Dept
Considerations regarding R&D structure • Functional groups need to be differentiated for task
specialization & building deep expertise & to recognize real differences between groups
• Integration required to coordinate vision, strategy, brand, priorities, and meet customer needs
• Idea generation requires boundary spanning
• Organization must be speedy
part 2: networks | comparison to trad | forms | structures
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
Centralized versus decentralized R&D
Corporate Headquarters
Petrochemical Division
Heavy Chemicals Division
Agrochemicals Division
Pharmaceuticals Division
Corporate R&D R&D PROD. MARKG.
part 2: networks | comparison to trad | forms | structures
Don’t forget the “localization” component! Politics
R&D
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
discussion threads
Why would a company choose to centralisze R&D? • Economies of scale in facilities and equipment • Recruiting and critical mass easier • Secrecy • Lower cost of coordination/control • Better coordination with internal units
Why would a company choose to decentralize? • More inputs into research • Localized research • Closer to customers • Interaction with foreign entities (gov’t and unis) • Enhancing firm’s image
What are imprisoned resources & bounded innovation?
part 2: networks | comparison to trad | forms | structures
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
Centralized versus decentralized R&D by fad Generation 1 Gen 2 Gen 3
Time Post 1945 Late 1960s Late 1980s
Example Bell labs Du Pont ICI
Style • Tech push w/centralized R&D • No explicit link to biz strategy • R&D dept decides future tech
• Biz pull w/decentralized R&D • Project focus overseen by biz managers • Focus on int. tech transfer
• Synthesis of tech & biz strategy • Concerns about core competencies
Climate • Seek breakthrough innovation • Focus on internally generated
knowledge
• Focus on R&D costs • Customer-vendor relationship between
R&D & biz
• Need to develop internal synergies & avoid duplication
• Tech & Biz strategies integrated biz wide
Org • Divisional status for R&D • Campus like environment
• R&D decentralized to business • Decentralized R&D supported by hybrid mission for corp. research inc. integration across biz, fundamental long-term research and foresight and external networks
Funding • From the center • Fund what you can afford
• Based on biz needs • Varies /tech maturity and competitive impact
Resource • At discretion of techies • Little upward visibility
• Businesses fund corp. research • Other R&D funded by biz, cust, suppliers
• Balancing of priorities and risk/reward
Targeting Biz and tech goals sequential • Biz & R&D objectives by project • All R&D has defined biz and tech objectives
Priorities By tech group • Biz criteria • Combined R&D/biz insights, cost/benefit
Measure Results not clearly defined • Formal peer review • Against biz objectives and tech expectations
Evaluate Ritualistic and Perfunctory • Communication with biz • Combines R&D and biz criteria
part 2: networks | comparison to trad | forms | structures
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
Centralized versus decentralized R&D by fad
Bounded innovation
Imprisoned resources
Under investment in core competencies
Potential for misallocation of resources
Improves incremental innovation but fundamental research skimped – commercial pressure stifles innovation
Short term focus Isolated from biz and customer needs
Dilemmas of decentralization continue
May fail to pickup weak signals of opportunities & threats
Bias towards tech rather than product and process
WEAKNESS
Integration with needs of the biz
Emphasis on long-term
Integrates biz and tech strategies in single framework
Strong interaction between R&D and other biz functions
Capacity to generate fundamental S&T breakthroughs
STRENGTH Gen 3 Gen 2 Generation 1
part 2: networks | comparison to trad | forms | structures
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
Centralized versus decentralized R&D another perspective
Era 1: Expansion was sales-focused (70s) • No real technology shoring
Era 2: Expansion was about localization (80s) • Focus is on outward learning from center to periphery • Dominance of a single center with satellites
Era 3: Expansion was true globalized R&D (90s) • New paradigm of transnational innovation – polycentric structure of
innovation • Multiple centers of excellence and learning (across the globe) • Intense market and technology interaction • Cross-functional learning from diff segments of value chain • Inward and outward learning • Reverse and interactive tech transfer • Greater reliance on research networks (own self do v sharing burden)
Era 4: now • Increasing issues with coordination • Revised trend for centralization and pairing down organization to a few
key centers (but where are the “attractors” & how do you decide?) • NOT about costs! It is about value!
part 2: networks | comparison to trad | forms | structures
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
How to promote innovation in new products or processes
• Intrapreneurship
• Skunkworks
• Matrix Organizations
• New Venture Departments
• Virtual Organizations
part 2: networks | comparison to trad | forms | structures
International Competitiveness and Innovation Topic 05: Knowledge and Technology Sourcing
questions…
Questions?