Innovation and learning in R&D
management; trends in practice
Jeff Butler
Institute of Innovation Research
Editor, R&D Management
Global publishing –
The world – authors &
referees
Manchester - Editors
Oxford - HQ
India – typesetters & copyediting
Singapore - printing
Shanghai distribution,
marketing
Cambridge, Mass. USA
Africa - readership
http://www.blackwell-synergy.com
A small selection of references
• Strategic management of intangible assets and value drivers in R&D
organizations, Stephen Pike, Göran Roos, Bernard Marr
• Managing and reporting intangible assets in research technology
organisations,
Karl-Heinz Leitner
• Competing in the new economy: the effect of intellectual capital on
corporate entrepreneurship in high-technology new ventures,
James C. Hayton, Mar-2005
• Trends and determinants of managing virtual R&D teams
Oliver Gassmann, Maximilian von Zedtwitz: 13-May-2003
• Managing innovative R&D teams
Hans J. Thamhain May-2003
A small selection of references
• A utopian view of R&D functions, Klaus Brockhoff
Jan-2003
• Technological collaboration in the korean electronic parts industry:
patterns and key success factors, Youngbae Kim, Kwanghoe Lee
Jan-2003
• R&D 'inputs' and 'outputs' of technology-based firms located on and
off Science Parks, Paul Westhead,
Dec-2002
• The allocation of resources for R&D in the world's leading
pharmaceutical companies, R.G. Halliday, A.L. Drasdo, C.E.
Lumley, S.R. Walker,
Dec-2002
Special issue on R&D in China, September 2004
Increasing access to R&D Management in China
The practices of R&D management
have been researched by academics
for more than 50 years
• The journals IEEE Transactions on Engineering
Management, Research Technology
Management, Research Policy, and
R&D Management
are more than 35 years old
• The R&D Management Conferences were
started in the 1970s by Alan Pearson
View over Salford Docks towards and beyond Manchester
Objectives
• The presentation will provide a quick overview of various
concepts and techniques that have interested academic
researchers or have been the focus of management
attention.
• How managers and academics can share their
knowledge of R&D management methods will be
introduced, with illustrations from European activities,
including reference to the R&D Management journal and
its international conferences..
• Implications for research and to advance the state of the
art will be suggested. This will provide a general
background and introduction for thinking about the
theme of the workshop - location of global R&D activities.
The evolution of R&D management as
an academic subject
• Innovation has been studied by economists and
others for over five decades:
– e.g. Carter and Williams, Manchester University - The
characteristics of technically progressive firms – 1956
– e.g. Everett & Rogers, 1970s, the diffusion of innovation
– e.g. ‘Wealth from Knowledge’, Manchester University - 1972
• The R&D Research Unit was created in Manchester
Business School in 1969 to develop the subject of R&D
management and promote it to UK managers
• interdisciplinary research is required to penetrate and
unravel the complexity and uncertainty of innovation
processes and to put R&D activities into an appropriate
business context.
The evolution of R&D management as an academic subject
• R&D management is usually studied at the micro level (e.g. from an
organisational design, financial management, operations research,
human resources, project, portfolio, alliances …. or international
business perspective)
• It can be studied at a more macro level (e.g. from an economics,
regional studies, innovation, investment …. or international business
perspective)
• Scientists and technologists can contribute insights from their work
experience perspective – but seldom do.
• There is a wide international community of scholars and
practitioners interested in R&D, innovation and
technology management. RADMA is a virtual
organisation registered as a UK charity and associated
closely with the journal and its conferences and other
educational and research activities.
what exactly are we discussing
here in this workshop?
• When focusing on foreign direct investment in
R&D, or international R&D, or the global
knowledge system or the attractiveness of
various locations for creative work then R&D
management at the micro or macro level is very
relevant and interfaces with knowledge
management, IP management, science and
technology policy, regional studies, economic
development, national innovation systems, the
triple helix etc etc
• Much about the attractiveness of locations for
R&D investment is however seen as economic
geography. How do the two come together?
some perspectives and perceptions
• R&D as a function
• R&D as a component of a business process – the
innovation process
• Innovation and technology management as networked
activities
• Technology strategy and internationalisation of R&D
• Technology commercialisation (V K Jolly)
• R&D as a business and as a services industry
• Options thinking, Intangible assets
• Global R&D networks and open (source) innovation
Management emphasis
Application
period
R&D as a function – corporate and government laboratories
1960 – 1980
R&D focused on current business and market needs
1972 – 1995
Interfaces between departments – R&D/production and
R&D/marketing. Matrix management.
1975 –1985
R&D serves innovation as a business process
Project teams and concurrent engineering
1990 – 1998
Networks of collaborating organisations including businessbusiness and university-industry projects
1995 – 2002
Core competences
1995 – 1999
The virtual R&D organisation
1996 – 2000
R&D “as a business”
1999 – 2001
Knowledge management
2000 – 2002
e-business, e-R&D, e-science
2001- 2004
Phase of R&D management evolution
Period
Main attributes of the period
1. R&D for corporate business (or public
sector) purposes (1st generation R&D
1950 -1972
Curiosity and discipline-based activities in relevant technology areas.
Technology-push.
Matrix management.
1972 - 1990
Market-driven activities with decentralised laboratories.
R&D as a cost centre.
3. Business-driven R&D[i]
1990 - 2001
Commercial attitudes
Quality focus.
User needs rather than market definition
3rd generation R&D managemen
R&D strategy and technology strategy are closely connected
4. Collaborative networks
1993 – 2002+
5th generation management model[ emerging
Networks and consortia. Strategic alliances.
5. R&D ‘as a business’
1999 – 2002+
R&D projects are each financially viable, using intangible assets concepts,
rather than being justified within a programme.
Contracting out. Outsourcing.
R&D as a profit centre
IP and knowledge highly valued.
Project results commercialised tangentially
R&D strategy and technology strategy are partially independent
6. R&D via business start ups,
knowledge intensive service businesses
(R&D based businesses) and enterprise
developments
2000 – 2002+
Project proposals written as a business plan
Spin-off companies from university and other incubators
R&D sponsored by venture capital and eventually exploited by flotation on
equity markets or by company acquisition
IP and knowledge is more highly valued
5th generation management model firmly established
7. R&D activity parallels the growth of
knowledge-intensive business services
2004+
Extended 5th generation models.
Intangible assets fully recognised.
R&D, innovation and technology management are integrated.
A new model of R&D management is required?
management – a linear model)
2. R&D for customers – the government
department or business division. (2nd
generation R&D management)
The evolution of R&D management
Global business dynamics
• The pace of change is currently very rapid in
business, technology and the management of
technology
– implications not just for R&D management but also for
innovation management, logistics management,
quality management, technology strategy and
manufacturing management etc
• New ideas - how to manage technology and
related activities more efficiently and effectively are being introduced quite frequently.
a historical perspective
• But we can learn from longer term trends as well as
contemporary issues and competitor activity.
• I want in this presentation to reflect on the evolution of
R&D management concepts.
• I think we can then understand better what is meant by
the ‘globalisation’ of R&D.
• We might understand more clearly how to attract R&D to
particular locations. This might help a wider range of
cities and regions – e.g. in Europe, not just China - to
nurture the growth of R&D activities
• It might help existing centres of excellence to compete
more effectively and to retain more R&D in their location!
• How the questions are asked and by whom determines
the shape of the answers that can be given
• It is then useful to ask what will come next in R&D
some more issues
• It is not just a question of facilitating better R&D
management for client companies, but delivering better
services to industries and citizens worldwide. This
concerns new modes of innovation policy.
• It is also valuable to think about the future, and how
things could be or might be and how we can strategically
intervene to shape the future.
• Basic to my presentation is the notion that the terms
‘global R&D’ and ‘globalised R&D’ are inaccurate
descriptions of what is currently happening. I don’t have
a good alternative term – so you will need, please, to
think during the workshop of better terms – better ways
of articulating the problem.
Analogies and metaphors
to stimulate creativity
• Terms such as ‘global’ are sometimes
metaphors rather than accurate descriptors. By
trying to think of a better word we might be
stimulated to think of new approaches to
attracting and encouraging R&D
– although many of the real practical challenges
will still remain.
• Metaphors in R&D management include: the
technology gatekeeper, the product champion,
the innovation funnel or pipeline, options
thinking, ‘open innovation’
• The term R&D is not an accurate description of
some work. ‘research’ – ‘development’ - ‘design’
Concepts and issues persist
In the early days (the 1970s) academic researchers used to study:
• communications in R&D laboratories (e.g. Tom Allen - ‘technology
gatekeeper’ concept, and string diagrams of people movements)
• Structures for organising R&D – scientific disciplines, matrix
management, project teams, dual ladder careers etc
• Application of operations research (OR) to project selection methods
– not very successfully
• R&D was typically organised in major corporate or government
laboratories and some research institutes.
• R&D outputs MIGHT lead to innovation, but managers expected
frequent failure or disappointment
• R&D was often viewed by marketing and manufacturing managers
as an ‘ivory tower’ [another metaphor]
• In various different ways these kinds of problems
and issues still exist
cycles of R&D investment
• R&D was too often regarded as a ‘cost centre’
• To try to improve performance, R&D was decentralised.
(The ‘customer contractor’ principle was introduced to
UK government labs, and similar principles grew in some
other countries)
• This lead to the closure of corporate labs and the
responsibility for paying for and doing R&D was
dispersed across business divisions. This caused R&D
work to become less strategic and less innovative.
• The tight specification of deliverables reduced the
prospect of tactical (project) failure but simultaneously
reduced the strategic potential value of the R&D
programme
More detail
• In the early 1990s quality management was introduced
into R&D – after most other management areas had
embraced the concept. This lead to performance
measurement.
• R&D often became a profit centre, and in order to utilise
resources more efficiently might then serve other
companies as well as the parent and internal business
customers
• Ganguly (Unilever, India) has referred to business-driven
R&D and going beyond this concept the trend in R&D
has been to organise R&D “as a business”
• technology strategy and strategic portfolio management
(core competences and technological capabilities)
became more important
More topics
• Technology complexity and sophistication – this means
longer cycles of skill development and project
experience
• Flatter organisations and leaner businesses
• Outsourcing of manufacturing activities
• Growth of information and communication technologies
to promote collaborations, dispersed teams and virtual
organisations
• The internationalisation of R&D
• Concurrent engineering
• Outsourcing R&D
• Business process engineering
more issues
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knowledge management
Licensing IP
Strategic exploitation of knowledge
Business incubation and intrapreneurship (plus
‘extrapreneurship’ is needed to facilitate this)
Technology as know how or dynamic capability
R&D as a knowledge acquisition process
R&D as the assembly of knowledge from
different sources
Google, Autonomy, other powerful search
engines
integrating R&D management with
business and policy issues
• A shift from R&D (a function) to innovation process and
technology strategy issues in business
• Increasing interest in science and technology planning
and innovation policy – at national and European levels
• Foresight and technology intelligence
• Technology roadmapping (a means of communicating
across companies and industries)
• Network mapping
• Patent scanning and other data mining techniques for
competitor analysis, technology focus and to identify
emerging technologies ad industries
• Increasing knowledge intensification and more emphasis
on design and creative industries (including media)
Innovations in management
• University-industry interaction
• revitalisation and restructuring of public
national laboratories and research and
technology institutes
• Industrial R&D ecologies
• Options theory and options thinking
• Open innovation
• Intangibles – reputation and image and the
credibility to be an R&D partner
Partnerships in learning
• Industrial Research Institute (IRI) in US and European
Industrial Managers Association (EIRMA) – learning
‘clubs’ for major R&D investor companies. Also in Korea
and Australia.
• Knowledge Transfer Partnerships – LINK – many other
schemes in UK – to promote and facilitate university
industry collaboration.
• Some European ‘mobility’ schemes including PhD level –
mainly for individual career development – but have been
used by industry
• European Doctoral Summer Schools in Technology
Management and European Summer Workshop in
Strategic Technology Management – a company focused
project-based learning for masters students
The R&D Management Conferences
• In Europe - Manchester, Kiel, Fontainebleu,
Ghent, Zurich, Lausanne, Twente, Pisa, Avila,
Lisbon, Hyderabad, Delhi, New Zealand
• Themes have usually been relevant and
contemporary, frequently coinciding with industry
themes as defined for conferences by EIRMA,
IRI etc
• RADMA (a UK charity) supports participation at
these conferences and the Doctoral Summer
Schools
• Other conferences include IAMOT, PICMET,
ITMF, IEEE EM, PDMA, EIASM
The R&D Management Conferences
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Internationalisation of R&D
Interdisciplinary R&D
Knowledge Networks
R&D and entrepreneurhip
Quality management and R&D
R&D as a business
People and R&D
Leveraging R&D
Organising R&D – a balancing act
European R&D as a learning and
innovation opportunity
• EC Framework R&D programmes – encouraged and
supported much collaboration between partners who
were often strangers
• EUREKA – a decentralised programme of near market
R&D support – funds from national governments
• Commercial ventures – e.g. Airbus
• Mergers and acquisitions
• Action learning, management workshops
• Gate2growth.com – fusion of innovation, finance and
entrepreneurship
• INSPIRED project – intended to focus on less innovative
or less R&D intensive regions
Imperfections in knowledge
• science and technology practices and how they are
managed
• the academic theory of R&D management and its
practice
• consultancy advice and implementing recommendations
• policy research and management research
• policy design and policy implementation (e.g. OECD
EIRMA seminar in Paris to inform policymakers
worldwide about business management methods)
• the statistics and reality of R&D activity (OECD, Eurostat,
UK R&D scoreboard (now a European version in 2005)
• indicators of innovativeness (for countries) and
aggregate and composite information
• innovation ‘trendcharts’ and what next for those at the top
of the league tables (e.g. Finland)
R&D concentrations
• By industry sector (as classified) but only a few
sectors
• By focus – products and processes but not
services – 80% US GDP is service economy and
60% of R&D is for manufacturing
• By company –typically the larger companies in
each sector
• By geographical area – R&D is concentrated in
only a few countries even in advanced
economies and only a few cities and regions
within those countries
Manchester – a historical perspective
• The oldest railway station in the world
• The first stored program computer designed and built (in
1948) in Manchester University
• The oldest industrial estate in the world – about 109
years old – Trafford Park (which is also home for
Manchester United)
• 1956 – Jodrell Bank radio telescope – now connected to
a Japanese satellite
• 2005 – Manchester the most buoyant economy in the UK
• Exciting architecture and constructions
• The Commonwealth Games – The B of the Bang
• Economy based around ‘knowledge capital’ and creative
sector.