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1. Chapter 10 Global Innovation
2. Global innovation Forces at work: Increasing costs Shortening product life cycles Increasing importance of TIME-to-MARKET for competitive advantages Increasing importance of customers participation in technology development Increasing importance of networking, partnerships and alliances in technology development Increasing importance of multi-disciplinary integrative technologies Emergence of new centres of technological excellence: India, China
3. The world of R and D Source: Barry Jarulesky and Kevin Dehoff, Beyond Borders: The Global Innovation 1000, Strategy and Business, Booz and Co, 2008 3
4. R&D capabilities Source: World Bank World Development Indicators (2011).For the period 2007/2009 data with * are for 2005, ** for 2006, ***for 2007
5. Increasing Importance of Emerging World Source: Unctad, 2005 5
6. Globalisation of R and D and Performances 6
7. Source: Deloitte: Innovation in Emerging Markets 7
8. 8 Source: Deloitte: Innovation in Emerging Markets
9. Managing global innovation Knowledge creation Knowledge sharing / transfer
10. Knowlege Creation Internationalisation of Research And Development in multinational corporations Central Lab Central Lab Central Lab Central Lab
11. Knowledge creation Some of The Well Established Traditional R & D Management Principles “Critical Mass Requirements”: 50 to 100 minimum size for a multi-disciplinary laboratory Linkages with sources of scientific knowledge: Proximity to universities Face to face communications: Personal contacts Pooled R & D more efficient than sequential Growing need for closer interaction with customers
12. Knowlege Creation International R & D Networks ADVANTAGES DISADVANTAGES Close to markets Close to production Close to raw materials Close to universities Small size Flexibility Integrating acquisitions Loss of critical mass Difficult to communicate Risk of duplications Difficult to integrate
13. Knowlege Creation A Typology of Research Units Research laboratories In charge of long projects, dealing with new technologies or scientific discoveries that are not necessarily related to a particular product. These laboratories are global by nature, and most often, but not always, are located near the corporate centre. Development laboratories In charge of projects which has the objective to lead to a product or process innovation. Supporting/adaptive units Provide product or process adaptation according to local contexts. Scanning units Monitor technological development and contribute to the knowledge platform of the company.
14. Knowledge dispersion profile for STin Hard Disk Drive electronics Engineering and design skills in fast microprocessors: Bristol, U.K. Process technology R&D in BICMOS (mixed) and CMOS (digital); Manufacturing (Front End): Grenoble, France Joint design center with Seagate:Scotts Valley, CA Engineering and design skills in digital servo controllers: (JV) SSD - Dublin, Ir. Microprocessor development: (JV) Siemens, Germany Lead Customers R&D and Engineering: Seagate, Western Digital (California,Colorado, ...) Process technology R&D in Bipolar and BCD; Design competence on analog and mixed chips: Castelletto and Agrate, (near Milano), Italy Competence on R/W technology: (JV) EXAR, CA Design of ‘packaging’, testing and final assembly (Back End) capability: Malaysia, Singapore Engineering and Design Capability / Close understanding of customer application / Design Center: S. Jose CA Coordination and strategic capability: Geneva, Switzerland Customers’ manufacturing:Singapore, and other Far East loc Source: Doz, Santos, Williamson
15. Knowlege Creation Knowledge Complexity is a combination of Tacitness and Embeddedness (Context-Dependant) Existential Knowledge “Creep into the Mind” (Tacit and Context Dependent) Learning by doing and discovering JIT and TQC in Japan, Cultural assumptions (Fashion, Music, Arts) Joint teams approach “See through the Eyes” (Codified and Context Dependent) Learning by seeing Long term secondments Apprenticeship “Jump into the Shoes”( Tacit and General) Learning by studying Practices and skills Cases studies Short term secondments “Take a Picture” ( Codified and General) Learning by reading Technical blueprints Patents “Feel and Live” Complex “Study and Live” Endemic Knowledge Experiential Knowledge “Experience & Practice” Simple Explicit Knowledge “See & Study” Source: Santos Source J. Santos
16. Co-Location and Diversity Co-Location and Congruent Knowlege Creation Tapping on the Global Diversity of Competencies C & D D & D Dispersion and Diversity High The tower of Babel The virtual team Knowledge creation and sharing in one place with the participation of managers detached from dispersed business units. The secondment practice. Knowledge creation, sharing in several placeswith the ability for the company to create the conditions for effective sharing of tacit knowledge. Diversity of Knowledge Sources D & C C & C Dispersion and Congruent The Diaspora Team “Centre of Excellences” Virtual co-location Knowledge creation, sharing in several places but with expatriate managers coming from the same “intellectual” mold. Classic role of expatriate managers Classic Co-location Teams. Knowledge creation, sharing in one place and possibly transferred later. Low Same Location Distant Source: J Santos
17. Knowledge Transfer HIGH Move information about the technology to where the market knowledge is Move information by rotating people and by temporary co-location COMPLEXITY of MARKET KNOWLEDGE Move information about the market to where the technological knowledge is Exchange information ( Digital etc..) LOW HIGH LOW COMPLEXITY of TECHNOLOGICAL KNOWLEDGE Source: Doz
18. Knowlege Transfer Sources of "Stickiness" in Knowledge Transfer Causal Ambiguity makes it difficult to have a precise modelling of the cause and effects relationships. Causal ambiguity exists when tacit knowledge is at the core of the functioning of the practice. Lack of Absorbent Capacity by the recipient unit who is not capable of interpreting the knowledge transfer and to apply it. Here again, tacitness may constitute a barrier to knowledge transfer when the recipient unit has not the inside resources to “crack” the implicit, non-verbal elements of the practices. Arduous Relationshipsthat exist when tacit knowledge requires multiple interactions between individuals, particularly when geographical and cultural distance are present. Source : G. Szulanski
19. Facilitating Knowledge Transfer in Global Firms Business units and team leaders trained and experienced in D& D practices: Open, multicultural alert, intuitive communicators Socialisation before team work implying “non productive” social interfaces Transitional encounters (conferences, seminar, workshops..) with loose agenda to allow for tacit knowledge to be shared. Make teams aware of contexts through visits, education Strong, accessible, open, user-friendly knowledge management platforms (Electronic libraries, case studies, chat rooms,..) Deadlines for project completion Yellow pages (who is who for what?) Source : G. Szulanski
20. Organisational architecture for a global R&D network Small central staff Specialised local centres Profit centres? Optimal size (20-300) Role of project managers Temporary assignments Training Language policy Intense travelling Structure People Planning involving operations Intense communciation Systematic diffusion Documentation Information system network Meetings, conferencing “Free budget” Learning culture Shared values Network culture Systems Values
21. BASIC Main central research laboratory Divisional R & D units Specialised R & D units (Closely integrated in the whole corporate research system, e.g. toxicology unit) APPLIED Corporate headquarters Divisional headquarters Technical development support laboratory R & D unit DEVELOPMENT R & D units attached to manufacturing plants Organisational architecture for a global R&D network Location of R & D in a large corporation: A model
22. Intellectual Property Infringement Do you know those brands????
23. Intellectual Property Infringement 23
24. Types of international product forgery PRODUCT Don’t change product Modify product Don’t change trademark PIRACY COUNTERFEITING TRADEMARK REVERSE ENGINEERING IMITATION Modify trademark Source: Jack Kaikati
25. European Statistics on Counterfeit Goods Seized by Customs Source: European Commission Report, 2010 25
26. According to the International Federation of Pharmaceutical Manufacturers Associations (IFPMA), 7% of all drugs being sold around the world are already counterfeits. The value of this trade is more than 50 billion DEM.
27. Software Piracy Source: BSA ,2002, Trends in Software Piracy
28. IPR Protection Approaches Restrict disclosure of IP to selected employees Require key employees to sign individual secrecy agreements Establish a strict catalogue of level of confidentiality Keep IP in secure location Educate employees on the rationale and the consequences of infringement Regular interviews of employees Prepare a handbook giving the list of items to be protected what to do in case of leakage suspicion; give recommendation about best practices. Employees Non disclosure agreements Establish rules about what can be disclosed and what cannot be Education about benefits/risks in IP protection/enfrigment Suppliers Distributors/ Users Formal agreements not to use/ resale copies/ pirated products Education about benefits/risks in IP protection/enfringment Be specific in the Joint Venture Contact Use “black box “ approach when technically feasible Screen partners' employees Joint Venture Partners Lobby governments Use diplomatic channels to support actions Engage in legal action as soon as possible, even if the legal context is unfavourable Legal 28 28