Topics in the Management of Technology and Innovation A Synopsis of Major Findings

Topics in the Management of Technology and Innovation: A Synopsis of Major Findings Bedrijfseconomische Verhandeling March 1997 Koenraad Debackere Department of Applied Economics, K.U.Leuven Naamsestraat 69 B-3000 Leuven Topics in the Management of Technology and Innovation: A Synopsis of Major Findings Koenraad Debackere, Department of Applied Economics, K.U.Leuven Abstract In this review paper, major findings on ‘best practices’ in technology and innovation management are summarised and discussed These ‘best practices’ are situated at the strategic level as well as at the operational level in the organisation They highlight the strategic (portfolio-level) and operational (project-level) determinants of innovation performance The economic origins of innovation management theory are also briefly introduced and discussed Introduction Technology is a major stimulus for change in society We have come to look to technological innovation to rescue us from the consequences of exhausting natural resources; to abate inflation through productivity increases; to eliminate famine; to cure cancer; and to maintain the competitive position of our nations’ industrial bases Indeed, technological change has become a major driver of competition: it propels new firms to the forefront of the competitive arena while it destroys the competitive advantage of even well-entrenched firms Achievements such as electronic computers, test tube babies, supersonic aircraft, and manned space flights have bolstered our faith in technical advance We no longer ask if something is possible, but how soon it can be done and at what price There is little doubt that the rapid technological progress we have witnessed during the last decades will come to an end soon Today, researchers around the globe are working intently on developing ideas that may create new branches of technological practice and could ultimately transform industry in ways which are hard for most of us to imagine As a consequence, the ability of managers and policy makers to comprehend the pace and the direction of technological advancement will largely determine a firm’s or nation’s competitive performance in world markets into the next century This is no small task, however Historical accounts of industrial evolution and innovation, such as with the development of semiconductors (Braun and Macdonald, 1978), videocassette recorders (Rosenbloom and Cusumano, 1987), and personal computers (Smith and Alexander, 1988), show the immense difficulties some firms encounter when confronted by new technologies The inertia, introduced by a firm’s existing technological base, often is a powerful barrier to internalise new technological trajectories (Utterback, 1994) Hence, there is an obvious need to harness the process of technological innovation effectively To this, technological innovations cannot be isolated from the complex economic, social and political systems within which they operate As a consequence, an extensive research agenda into the nature of the technological innovation process started in the 1950s This brought a recognition that innovation is an activity which needs careful ‘managerial’ attention and actions But, before there can be effective management, there must be a detailed understanding of the process of innovation, its characteristics and its specific problems Therefore, the first part of this paper will focus on the major characteristics of the innovation process as they have emerged over the last three decades The models to be discussed are chosen for the complementary insights they offer into the complex nature of the innovation process We start with the theories on technical change developed by Schumpeter Although the study of technical advance as an economic phenomenon is a relatively recent event, it was Schumpeter who in three books, The Theory of Economic Development (1934), Business Cycles (1939), and Capitalism, Socialism and Democracy (1942), portrayed most fully the active role played by economic agents in technical advance From these studies, technological innovation emerges as a non-linear, dynamic, interactive and complex process In addition, models of the innovation process were developed to support managerial actions Whereas the theories by Schumpeter attempt to gain a fundamental insight into the nature and the causes of technological evolution, the three models discussed subsequently focus on the innovation process within the firm The first model, by Roberts and Frohman (1978), depicts technological innovation as a process of uncertainty reduction This process necessitates three important activities within the firm Ideas have to be generated Once generated, these ideas have to be turned into good currency And, finally, appropriate organisational structures have to be implemented to manage the transition from what first seems to be an abstract ‘idea’ into a ‘product’ desired by customers As a consequence, an important focus of this model is on managing people and their innovative ideas The second model explicitly makes the link between technological innovation on the one hand and organisational strategy and structure on the other hand The Abernathy-Utterback model (1975 & 1978) describes how product and process innovations evolve during the technological life cycle of a ‘productive unit’ or ‘business unit’ and, still more important, how competitive strategy, production facilities, and organisation structure ‘co-adapt’ during this evolution Finally, the technological S-curve model (Roussel, 1984; Foster, 1986) enables managers to better estimate the strategic importance of the different technologies in a firm’s technology portfolio To this end, the S-curve model is used to develop a technological typology A distinction is made between emerging, pacing, key, and base technologies The competitive implications of this typology are highlighted A link is made with Wheelwright and Clark’s definitions of breakthrough, platform and derivative projects (1992) Once we have obtained a basic understanding on the nature of the innovation process, we will turn our attention to the management of technological innovation This will be the theme of the second part of this paper From the previous discussions, we know that ‘managing’ the innovative capabilities of the organisation involves different levels of attention: (1) attention to the relationship between technology and strategy; (2) attention to an appropriate organisation structure in which innovative activity can flourish; and (3) attention to the management of innovative professionals It is hence necessary to discuss the management implications associated with each level of attention The integration of these three levels of attention leads to the development of a partnership model on organising technology and innovation, as discussed by Roussel and his colleagues in their influential book Third Generation R&D (1991) Finally, the third part of the paper brings together the major issues raised in the previous sections and ends with a ‘checklist’ of focal activities that are to be considered when managing a firm’s innovation efforts Before embarking upon a detailed discussion of these topics, though, there is an obvious need to clarify two major concepts used throughout this paper, i.e what is meant by ‘technology’ and how we define ‘technological innovation’? 1.1 Technology: what’s in a name? Throughout the decades of research on the management of technology and innovation, a host of definitions has surfaced, attempting to describe what is meant by a ‘technology.’ According to the Oxford Dictionary, technology is “the science of industrial arts.” This definition, despite its brevity, combines two concepts that are essential to fully grasp the meaning of ‘technology’: science and arts Of course, we not imply that technology is the same as science, not even that it always has to be based on scientific principles or developments Indeed, examples exist where the technology was in place before the underlying scientific principles were known or clarified One of the most notable examples undoubtedly is the steam-engine It was developed before the science of thermodynamics had originated However, the Oxford definition does imply that technology has an important ‘knowledge’ component Thus, a major input into technological activities is knowledge about why things work the way they This is the know-how versus the know-why question This knowledge can be derived from scientific developments, but also, from previous technological experience The Oxford definition also points to the fact that technology has to with arts The products of human art are artefacts Artefacts are tangible products and processes created by human skill Thus, contrary to scientific activity, the major output of technological activity is embodied in hardware, i.e products and processes Technological output is tangible It is not mere knowledge Figure (adapted from Allen, 1977) highlights this important contrast between technological activity and scientific activity The major inputs into any scientific activity are information and knowledge The major outputs of scientific activity are, once again, information and knowledge Oversimplified, scientists read papers (knowledge input), they think and experiment, and they write papers (knowledge output) The major inputs into technological activity are also information- and knowledge-related However, the major outputs of technological activities are embodied in hardware, i.e products (which are more and more frequently integrated with services, or vice versa) and processes — Insert Figure about here — Thus, technological activity can be defined as the processes by which knowledge (scientific and experiential) is transformed into artefacts, i.e products and processes As a consequence, technological activity is characterised by both a less-tangible knowledge component (i.e the inputside of the equation) and a tangible product or process component (i.e the output-side of the equation) Having defined ‘technology’, we still have to clarify the concept of ‘technological innovation.’ 1.2 Technological innovation Technological innovation is the successful commercial exploitation of inventions as they become embodied into new products and processes The emphasis thus is on exploiting the results of technological activity There are, of course, different opinions of what constitutes a new product or process In the most general and pure sense, the product or process developed is new to the world This need not be the case, however Certain experts go as far as considering any product or process an ‘innovation’ as long as it is perceived as new to the organisations involved, even though it may appear to others to be an ‘imitation’ of something that exists elsewhere (Van de Ven, 1986) Whereas the invention process may be hard to manage, the management of the innovation process (as a systematic approach to exploit inventions and reduce them to practice in a successful manner) has been well-embedded both in theory and practice over the last decades Before turning to these managerial issues, though, it is necessary to address the following question: What are the characteristics and the complexities involved along the innovation trajectory? The process of technological innovation In this section three different approaches to unravel the characteristics of the innovation process are discussed (the models by Roberts (1978)and by Abernathy & Utterback (1975), and the S-curve by Roussel and Foster (1984 & 1986)) The ‘economic’ origins of innovation theory are highlighted first This economic debate has focused on the relationship between market structure and innovative activity 2.1 The economic debate: market structure, technology-push and market-pull Schumpeter was the first to fully portray the active role played by economic agents in technical advance Schumpeter’s different books, though, reveal the many subtleties involved in explaining the origins of technological innovations It is important to grasp those subtleties since they are essential to understand the more managerial oriented models of the innovation process to be discussed in the next sections In his first two books (The Theory of Economic Development, 1934 & Business Cycles, 1939), the entrepreneur plays a central role The entrepreneur is defined as the person who creates new combinations He sees how to fulfil currently unsatisfied needs or he perceives more efficient ways of doing what is already done These acts may, though need not, involve the presence of inventions In some cases, it may only involve a new application of an existing technology As a consequence, the act of invention and the act of entrepreneurship are separate: the inventor need not necessarily be the entrepreneur and vice versa However, the entrepreneur plays a central role since he is the one who turns the invention into exploitation Given the importance attributed to the ‘entrepreneur,’ this theory has often been called Schumpeter’s theory of ‘heroic entrepreneurship’ or ‘creative destruction.’ Indeed, the logic of the theory is as follows (see Figure 2) There exists a pool of inventions related in an unspecified way to the state-of-the-art developments in scientific and technological knowledge The important observation now is that this pool of inventions is largely exogenous to existing firms and market structures Thus, they are unrelated to any specific and quantifiable type of market demand Of course, this does not mean that they may not be influenced by an anticipated demand or shortage We all know that, in an abstract manner, human needs are infinite However, in the realm of Schumpeter’s theory of heroic entrepreneurship, there is no direct coupling between a measured market need (as we would detect from extensive market research, for example) on the one hand, and the efforts invested and the directions chosen in the pool of inventions, on the other hand The essential link between the ‘pool’ of inventions and the ‘market’ is made through the person of the entrepreneur He is aware of the potential of certain inventions, and as a consequence, becomes prepared to take the risk and the commitment necessary to turn these inventions into innovations Thus, innovating is more than inventing As defined previously, it is the (successful) commercial exploitation of inventions Schumpeter then remarks that such a hazardous activity would not be undertaken by an ordinary capitalist economic agent (such as an existing firm) Only the entrepreneur has the vision, the drive and the commitment to survive the turbulence and the uncertainty involved If he succeeds, though, the rewards are enormous The entrepreneur will realise exceptional (be it temporary) monopoly profits and he may be able to fundamentally alter existing market structures — Insert Figure about here — Examples of the successes of ‘heroic entrepreneurs’ abound For instance, the advent of Texas Instruments as a major electronics firm can be seen as the result of heroic acts of technological entrepreneurship The company did not actually invent the transistor, though it made judicious use of the new technology to create products that would meet hitherto unfulfilled customer needs Other examples of heroic technical entrepreneurship are Edwin Land and the development of the Polaroid camera and Joe Wilson who turned the Haloid Company, a small photographic paper and supply firm, into today’s giant Rank Xerox through his vision and ideas about a revolutionary copying process More recent examples of ‘heroic entrepreneurship’ can be found in the formation of new biotechnology firms such as Plant Genetic Systems, Genentech, Amgen, etc They all symbolise the entrepreneurial vision that attempts to turn ‘knowledge’ into ‘commercial exploitation.’ In doing so, those firms are at the origin of what Schumpeter called “the eternal gale of creative destruction.” In his third book, Capitalism, Socialism and Democracy (1942), Schumpeter’s focus on technical progress took on new directions (see Figure 3) Instead of focusing solely on the ‘heroic entrepreneur,’ Schumpeter now incorporates the importance of scientific and technological activities conducted by (mostly large) firms In this additional model of the innovation process, the coupling between science, technology, innovative investment and the market, which was tenuous at best in the first model (see Figure 2), is much more intimate and continuous Successful innovations generate profits leading to increased in-house innovative activity and R&D investments — Insert Figure about here — As a consequence, the heroic entrepreneur is not the only central agent linking invention to its subsequent exploitation Whereas science and technology are largely exogenous in the first model depicted in Figure 2, they are at least partly endogenised in the model described in Figure Thus, the link between invention and exploitation is internalised within existing economic agents, i.e the firm (and preferably the large firm, as Schumpeter hypothesised) As a consequence, the role of the heroic entrepreneur who couples invention and exploitation, is complemented by intrapreneurial modes of invention exploitation Still more important, Schumpeter’s paradigm on the economics of technical advance inspired the hypotheses that innovative activity would be proficient in (1) large firms and (2) in monopolistic industries Large firms were deemed more innovative than small firms because they can finance a larger research and development staff, leading to economies of scale in R&D; because large firms are better able to exploit unforeseen innovations given their more diversified product lines; and, because indivisibility in cost-reducing innovations makes them more profitable for large firms In the same vein, it was hypothesised that innovation would be greater in monopolistic industries than in competitive ones because a firm with monopoly power can prevent imitation and thereby can capture more profit from an innovation; and, because a firm with monopoly profits is better able to finance research and development (Kamien and Schwartz, 1982) Although the hypotheses on the relationship (1) between firm size and innovative activity as well as (2) between monopoly power and innovative activity have only received limited support, the models described in Figures and further lead to the origins of a debate that has engaged students of the innovation process for quite some time, namely: what is the causal direction of the relationship between technological research and the market? In other words, is technological research the initiator of innovations that lead to the creation of new markets (i.e the ‘technologypush’ hypothesis)? Or, on the contrary, is it the market that initiates innovations (i.e the ‘marketpull’ hypothesis)? Although the question on causality may seem superfluous, it has nevertheless important consequences, not in the least at the macro-level of economic policy-making Indeed, if one adheres to the technology-push hypothesis, then one will recur to a supply-side oriented (neo-classic) macro-economic policy with respect to technological innovation Enough money has to be invested in research facilities and R&D programs, and markets will ultimately follow suit Oversimplified, a technology-push oriented policy will allocate considerable sums of money to R&D, hoping that heroic entrepreneurs will tap the pool of knowledge thus generated and create new products and processes that ultimately serve markets On the other hand, a market-pull policy will stimulate innovation through creating a demand for new products or processes This demand will trigger innovative behaviour For instance, in order to stimulate innovations in telecommunication technology, a market-pull oriented policy might operate through the creation of a national demand for a new telecommunication network This demand would then spur the innovative behaviour of the organisations participating in the national program A technology-push oriented policy, on the other hand, might operate through formulating R&D programs in telecommunications technology A scrutiny of government policy frameworks aimed at stimulating technical innovation shows that, in fact, both technology-push and market-pull orientations are relevant Innovations have their origins both in the market and in the creation of new technological capabilities For sure, research has shown that market-induced innovations tend to have a higher probability of commercial success than innovations that originate from a technological capability and that are isolated from a marketselection environment However, this relationship between market-relatedness and commercial success is moderated by the fact that market-induced innovations tend to be more incremental and thus less radical than innovations having their origins in the research laboratory (Rothwell et al., 1977) Moreover, it appears that technological innovation certainly is not a linear, sequential process as might be (incorrectly) deduced from Figures and Instead, it is a complex, multi-stage, crossfunctional, and multi-disciplinary process in which both supply-side and demand-side arguments are relevant and should be carefully considered This is all the more true when studying technological innovation at the firm-level Here the managerial models of technological innovation become relevant 2.2 Managerial models of technological innovation 2.2.1 The process of technological innovation: a general model The first managerially relevant model to be discussed is the one proposed by Roberts and Frohman (1978) This model (see Figure 4) emphasises three key generalisations First of all, ideas and opportunities for innovation originate both from the supply-side (‘technology’) and the marketside (‘market’) Thus, both the ‘technology-push’ and the ‘market-pull’ dimensions are highly relevant Second, the process of technological innovation is a multi-stage or -phase process Significant variations in the primary task as well as in the managerial issues and effective management practices occur across these different stages Third, in the model, six stages are presented The exact number of stages or phases is, of course, somewhat arbitrary What is key, though, is that each phase of activity is dominated by the search for answers to different managerial imperatives Finally, each phase requires clear go/no go decision points and phase-reviews — Insert Figure about here — At the outset (stages and 2), emphasis is on finding a motivating idea, a notion of possible direction for technical endeavour Thus, ideas have to be generated and, still more important, once generated, attention has to be paid to those same ideas Good managerial practice at these early stages frequently involves loose control, the pursuit of parallel and diverse approaches, fostering conflict or at least contentiousness, and stimulating a variety of inputs Small amounts of money 10 should be rather freely available to enable the assessment and evaluation of the ideas generated A major mistake is to set up rigid formal processes for approval of the small sums needed to try out an idea But, most of all, an organisational environment and culture has to be developed that tolerates new ideas and allows proper attention to be paid to them 3M’s statement “Thou shall not kill an idea” clearly reflects what is meant by this attitude In addition, a tolerance for new ideas also implies a tolerance for failure As has been often documented in the innovation management literature, false foundations can prove to be challenging new starts This, though, is only possible when ‘failures’ are tolerated As we move further along the different stages, the managerial issues and the actions required change dramatically During stages and 5, for example, the task involves in-depth specification and manufacturing engineering of ideas that are being reduced to an acceptable working prototype The managerial issues evolve towards co-ordinating a number of scientists and engineers of different disciplinary backgrounds to achieve, within previously estimated development budgets and schedules, a predefined technical output ready for manufacture in large volumes; reliable and at competitive production costs Effective managerial practice will thus involve tight control, elimination of duplication, strong financial criteria and formal evaluations of resource use, even somewhat rigid adherence to planning Thus, during the later stages of the innovation process, the managerial actions required are rather opposite to the ones advocated during the first stages of the process Whereas the first stages focus on ‘managing ideas,’ the later stages focus on the management of the ‘part-whole relationships’ required to turn these ideas into a tangible product or process Part-whole management indeed requires the co-ordination of the efforts of people with different disciplinary backgrounds, working together toward achieving the new product or process goals As is obvious from Figure 4, innovation occurs through efforts carried out primarily within an organisational context, but involving heavy interaction with the external technological as well as market environments Proactive search for technical and market inputs, as well as receptivity to information sensed from external sources, are critical aspects of technology-based innovation Many studies of effective innovations have indeed shown the presence of significant contributions of external technology (e.g via contacts with universities) and have found success heavily dependent upon awareness of customer needs and competitor activity Another remark is warranted with respect to the model in Figure For ease of presentation, all stages are shown at equidistant intervals inappropriately suggesting perhaps the similarity of these phases from a time duration and/or resource consumption perspective Stage 5, commercial development, for instance, usually takes as long as the several earlier stages combined and requires more resources than most of the other stages together This is why tight financial control becomes necessary at this stage A typical cash flow diagram for new product or process development is 33 - Should we share the financial burden with other ‘venture’ partners? 34 References Abernathy, W.J and J.M Utterback (1975) “A Dynamic Model of Product and Process Innovation,” Omega, Vol 3, No Abernathy, W.J (1978) The Productivity Dilemma Baltimore: The Johns Hopkins University Press Abernathy, W.J and K.B Clark (1985) “Innovation: mapping the winds of creative destruction,” Research Policy, Vol 14: 3-22 Allen, T.J (1977) Managing the Flow of Technology Cambridge, Mass.: The MIT Press Braun, E and S Macdonald (1978) 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M.I and N.L Schwartz (1982) Market Structure and Innovation, Cambridge, UK: Cambridge University Press Katz, R (1982) “Managing Careers: the Influence of Job and Group Longevity,” in R Katz (ed.) Human Resource Management Englewood Cliffs, N.J.: Prentice-Hall Katz, R and T.J Allen (1982) “Investigating the Not Invented Here (NIH) Syndrome: A Look at the Performance, Tenure and Communication Patterns of 50 R&D Project Groups,” R&D Management, Vol 12, No Katz, R (1988) Managing Professionals in Innovative Organizations Cambridge, Mass.: Ballinger Publishing Company Marquis, D.G and D.L Straight (1965) Organizational Factors in Project Performance MIT Sloan School of Management, Working Paper 1331, Cambridge, Mass Meyer, M.H and E.B Roberts (1986) “New Product Strategy in Small Technology-Based Firms: A Pilot Study,” Management Science, Vol 32, No Pelz, D.C and F.M Andrews (1967) Scientists in Organizations: Productive Climates for R&D New York: John Wiley and Sons Roberts, E.B and A Frohman (1978) “Strategies for Improving Research Utilization,” Technology Review, Vol 80, No Roberts, E.B (1980) “New Ventures for Corporate Growth,” Harvard Business Review, Vol 59, No 35 Roberts, E.B and C.A Berry (1985) “Entering New Businesses: Selecting Strategies for Success,” Sloan Management Review, Vol 26, No Rosenbloom, R.S and M.A Cusumano (1987) “Technological Pioneering and Competitive Advantage: the Birth of the VCR Industry,” California Management Review, Vol 29, No Rothwell, R et al (1977) “The Characteristics of Successful Innovators and Technically Progressive Firms,” R&D Management, Vol 7, No Roussel, P.A (1984) “Technological Maturity Proves a Valid and Important Concept,” Research Management, January-February Roussel, P.A., Saad, K.N and T.J Erickson (1991) Third Generation R&D: Managing the Link to Corporate Strategy Boston, Mass.: Harvard Business School Press Schumpeter, J.A (1934) The Theory of Economic Development Cambridge, Mass.: Harvard University Press Schumpeter, J.A (1939) Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process New York: McGraw-Hill (2 Volumes) Schumpeter, J.A (1942) Capitalism, Socialism and Democracy New York: Harper and Row Smith, D.K and R.C Alexander (1988) Fumbling the Future: How Xerox Invented, then Ignored, the First Personal Computer New York: William Morrow & Company Thamhain, H.J and D.L Wilemon (1977) “Leadership, Conflict, and Program Management Effectiveness,” Sloan Management Review, Vol 19, No Twiss, B.C (1992) Managing Technological Innovation London: Pitman Publishers Utterback, J.M (1994) Mastering the Dynamics of Innovation Boston, Mass.: Harvard Business School Press Van de Ven, A.H (1986) “Central problems in the management of innovation,” Management Science, Vol 32, No von Hippel, E (1977) “The Dominant Role of the User in Semi-Conductor and Electronic Subassembly Process Innovation,” IEEE Transactions on Engineering Management, Vol EM24, No Wheelwright, S.C and K.B Clark (1992) Revolutionizing Product Development: Quantum Leaps in Speed, Efficiency and Quality New York: The Free Press 36 FIGURE 1: Modelling the differences between scientific and technological activity (adapted from Allen, 1977) System Input Output SCIENCE Information & Knowledge Information & Knowledge Output Input TECHNOLOGY Information & Knowledge Products & Processes By-product Information & Knowledge 37 FIGURE 2: Schumpeter’s theory of heroic entrepreneurship (based on: The Theory of Economic Development, 1934 and Business Cycles, 1939) exogeneous science and technology entrepreneurial activities investments in innovation production patterns & market structure profits or losses from innovation 38 FIGURE 3: Schumpeter’s theory of endogenised R&D (based on: Capitalism, Socialism and Democarcy, 1942) exogeneous science and technology endogenous science & technology (mainly inhouse R&D) investments in innovation production patterns & market structure profits or losses from innovation 39 FIGURE 4: A general model of the technological innovation process (based on Roberts and Frohman, 1978) TECHNOLOGY Search Recognition of technical feasibility Fusion into design concept and evaluation and/or Recognition of potential demand Use Use Technical information obtained by search, experiment and calculation Solution through adoption or adaptation of existing technology and/or and/or Work out bugs and scale up Technical information available Market information obtained Search Transfer to manufacturing Solution through invention Use Test Response MARKET Recognition of opportunity Idea formulation Problem solving Prototype solution Commercial development Utilisation and/or diffusion 40 FIGURE 5: Cumulative cash flow during innovation projects (source: Twiss, 1992) end-of-lifecycle + Cumulative Cash Flow technical feasibility established break-even Time market launch production technology established research prototype plant earnings from sales 41 FIGURE 6: A dynamic model of product and process innovation in a productive unit (source: Abernathy, 1978) Rate of Innovation Product Innovations Process Innovations Dominant Design FLUID TRANSITION SPECIFIC Time 42 FIGURE 7: The technological S-curve “superior” technology discontinuity mature Performance “inferior” technology key pacing emerging Time / Cumulative R&D Investment 43 FIGURE 8: Example of a technology roadmap MARKETS product lines product product product product internal technology external technology technology technology technology COMPETENCIES technology technology Time 44 FIGURE 9: The innovation project portfolio as proposed by Wheelwright and Clark (1992) Research & Advanced Development Degree of Process Change New Core Process New Core Product Degree of Product Change Minor/Incremental Product Change Minor/Incremental Process Change Breakthrough Projects Platform Projects Derivative Projects 45 FIGURE 10: In-house scientific and technological functions of the firm according to innovation strategy followed (source: Freeman, 1982) Range 1-5 indicates weak (or non-existent) to very strong Offensive Defensive Imitative Dependent Traditional Opportunist Fundamental research 1 1 Applied research 1 Experimental development 5 1 Design engineering 5 1 Production engineering/quality control 4 5 Technical services 1 Patents 1 Scientific and technical information 5 5 3 1 5 Type of strategy Education and training Long-range forecasting and product planning 46 FIGURE 11: Choice between functional and project organisation forms (based on Allen, 1977) Project duration long Functional Organisation Project Organisation short stable rapidly changing Rate of change of knowledge base 47 FIGURE 12: The knowledge economy of the innovative organisation, hypothetical example for R&D 26 staff members Knowledge areas or specialties Level of competence Hydrometallurgy 14 Pyrometallurgy 14 Physical metallurgy 18 4 Modelling 20 Note: This knowledge map shows the hypothetical distribution of specialities among 26 scientific staff and engineers of a metallurgical R&D centre Four different competence levels are considered: (1) Level indicates that a person has no competence at all in the designated area; (2) Level indicates that the person has an understanding of basic principles in the specific knowledge area considered; (3) Level indicates that a person is able to collaborate on a task of activity in that area; (4) Level indicates that a person is able to conduct an independent problemdefinition and problem-solving activity in the particular area The example shows that the group is particularly vulnerable in the “Modelling” field ...2 Topics in the Management of Technology and Innovation: A Synopsis of Major Findings Koenraad Debackere, Department of Applied Economics, K.U.Leuven Abstract In this review paper, major findings. .. engineering and parallel development has convinced managers of the possibilities of having several innovation tasks running in parallel as well as of the potential of engaging in overlapping... (specific pattern) Innovation is stimulated by expanding the company’s internal technical capabilities The rate of product innovations slows down and takes on another character The advent of a stable,