Prioritizing telecommunications technologies for long-range R&D planning to the year 2006

This paper concerns telecommunications technologies prioritization for long-range R&D planning at the Korea Telecommunication Authority (KTA), which is the primary common carrier in Korea. Criteria weighting and technological importance ranking were determined by means of the Analytic Hierarchy Process as a decision aid, along with hierarchical representation and pairwise comparisons. The opinions derived from three divisions of KTA were analyzed and aggregated. Such aggregated prioritization weighting of technologies allows the corporation management to use it for funding decisions about technological aspects of its long-range planning for R&D projects during the period from 1992 to 2006; especially those concerning baseline budget level selection and the scope of research activities.<>     

Marketing–Manufacturing Integration Across Stages of New Product Development: Effects on the Success of High- and Low-Innovativeness Products

The study of marketing-manufacturing integration (MMI) in new product development (NPD) projects is rather limited, and has not clearly indicated how levels of MMI should differ across various stages of development for high and low levels of product innovativeness. Our study builds upon prior research that has applied resource dependency theory to product development projects. We examine the influences of MMI in each of four stages of the NPD process. A path analysis of data drawn from 467 completed NPD projects indicates that stronger MMI accomplished early in NPD is associated with stronger MMI in later stages of NPD. For highly innovative projects, increased MMI in each stage of product development is respectively associated with greater product market success, but MMI in the earliest stages is especially salient. For incremental NPD projects, the strongest positive associations of MMI with product market success are indicated in product commercialization. We compare our findings with prior research, and we identify benefits, detriments, and costs of MMI that should be more deeply explored in future research with the objective of a more complete theory of cross-functional integration in NPD.     

Exploring How Lead Users Develop Radical Innovation: Opportunity Recognition and Exploitation in the Field of Medical Equipment Technology

In this paper, we explore how lead users develop radical innovations outside of manufacturing firms. We analyze the transition from a very early stage of activities to the ultimate commercialization of these innovations. The focus in this context is on the initiatives undertaken by lead users in order to transform their radically new solutions into functional prototypes, and then, to convince established manufacturers of the technological and market potential of their innovations. Using a comparative case study design in the high-tech field of medical equipment technology, we find that individual lead users as surgeons launch entrepreneurial activities and bridge periods in which established medical equipment manufacturers would not risk investing in radical innovations. By doing so, lead users create the conditions usually provided in manufacturer-initiated lead user projects, including the supply of diversified knowledge, the development and coordination of a network for further development of the innovation, and initial tests of technical or market feasibility. Our findings have implications for manufacturing firms that wish to design radical innovation projects with (individual) lead users and for research on new forms of lead user cooperation and integration.     

Developing hi-tech industrial products for world markets

The innovation process for 81 industrial products developed and launched internationally by 55 Israeli electronic and chemical manufactures between 1980-5, was investigated. The performance of 25 preparatory marketing activities listed in the context of an innovation process model was studied. Factor analysis and cluster analysis were used to identify four total activity patterns. These patterns were found to be significantly correlated with economic success: best performers were the clusters identified as market guided developers and systematic planners. While the preparatory marketing activity patterns are related to firm characteristics market/product characteristics, and technological process characteristics, the major intercluster differences appear to arise from managerial practice and market strategy rather than external characteristics     

The impacts of speed-to-market on new product success: the moderating effects of uncertainty

Time-based strategy is becoming an important weapon to achieve competitive advantage in the current environment of fast-changing technology and customer requirements. Speed-to-market has become the mantra of both researchers and practitioners in new product development (NPD), but there are limited and conflicting findings on the relationship between speed-to-market and product success. A more important question is whether faster is always better. In a study of 692 NPD projects, we examined the relationship between speed-to-market and new product success (NPS) under different conditions of uncertainty. Our results indicate that speed-to-market is generally positively associated with overall NPS, but market uncertainty moderates the direct effect. Speed-to-market is less important to NPS under conditions of low market uncertainty. Our results also suggest that technological uncertainty does not affect the speed-success relationship. The implication is that it is more important to execute a time-based strategy in an unfamiliar, emerging, or fast-changing market than in a familiar, existing, and stable market. The limitations and future research related to these results are discussed.     

Spectrum R-D 100 [R&D spending]

All companies listed on the US stock markets may have to begin figuring stock outlays into their R&D expenses following the enactment of a new rule proposed by the Financial Accounting Standards Board, which establishes US accounting standards. The looming prospect of this new corporate accounting practice is already buffeting R&D in a way that few other developments have over the past half century. Disruptive as it is, the stock-accounting trend is just one of several poised to have long-term effects on R&D. Also seen to impact R&D are the increasing concentration of R&D resources on software development, systems engineering, and consulting, and the shift of basic research from private corporations to government-funded university projects as well as the globalization of the industrial research enterprise.     

The return on R&D versus capital expenditures in pharmaceutical and chemical industries

The impact of research and development (R&D) on firm performance is generally agreed to be positive, but the nature and extent of this impact share little agreement in the previous research. Using an improved, time series, cross-sectional regression model that accounts for both contemporaneous and firm-specific serial correlation, as well as the feedback between firm profitability and investments, our study compares the rate of return from a dollar investment on R&D to a dollar investment on fixed assets in pharmaceutical and chemical industries. We find positive associations of R&D intensity and all variables of firm performance (net margin, operating margin, sales growth, and market value). We find that an investment in R&D earns an operating margin return much higher than the industry cost of capital. We also find that the effect of an investment in R&D on the firm's market value is about twice as much the effect of an investment in fixed assets. These findings have implications for corporate investment strategies, indicating that additional R&D investment is more likely to provide a firm with a unique and sustainable competitive advantage.     

Analytic hierarchy process with fuzzy scoring in evaluating multidisciplinary R&D projects in China

A system for evaluating the outcomes of multidisciplinary R&D projects was developed in China by using the analytic hierarchy process (AHP) model. The AHP framework was structured as a "vertical" AHP with "horizontal" fuzzy scoring. Original inputs for the index system were elicited from a survey of expert evaluators on a national level. The AHP-based system was then applied by the Chinese Ministry of Science and Technology to evaluate a large number of completed R&D projects from multiple fields. The new R&D evaluation system reduced the heavy workload for experts and government agencies, significantly enhanced the efficiency and quality of the award process, and made the evaluation process transparent and fair. In addition, the new evaluation system was user-friendly and fully computerized, an important attribute required for widespread usage. Although the system was initially developed for R&D project evaluation, it can be extended to evaluations in other fields such as investment selection in venture capital and in corporate capital budgeting.     

TD-LTE商用初期的业务部署策略研究

在LTE建设发展初期,面临着网络覆盖尚不完善、终端类型较少等一系列问题。为了保障TD-LTE业务成功商用,催熟TD-LTE产业链发展,需要在试商用前确定商用初期业务部署策略。本文将结合杭州LTE试商用项目对这些待明确的问题进行从业务到网络的系统性研究。     

The effects of R&D and advertising on firm value: an examination of manufacturing and nonmanufacturing firms

Firm spending on innovation and marketing, as measured by research and development (R&D) and advertising expenses, respectively, are expected to yield positive returns in terms of share price performance. Given resource limitations, firms prioritize the quantum of their investments in R&D and advertising vis-a/spl grave/-vis other investments. We examine the relationship between firm performance and the intensity of their investments in R&D and advertising over an extended period covering 40 years and 15 039 firm-years. Our findings are consistent with the resource-based literature. Specifically, we find that intensive investment in R&D contributes positively to the one-year stock market performances of manufacturing firms but not for nonmanufacturing firms. We also find that intensive investment in advertising contributes positively to the one-year stock market performances of nonmanufacturing firms. For the three-year stock market performance, in addition to the findings of the one-year period, we find inconclusive evidence that manufacturing firms benefit from investment in advertising. The interactions of R&D and advertising intensities are insignificant in explaining the stock market performance of the firms except for the three-year horizon for nonmanufacturing firms, which is significantly negative. Consistent with the resource-based literature, this implies that firm performances are diluted when they invest their resources in activities outside their core competence.     

Managing technology development for safety-critical systems

This paper presents a model that determines the optimal budget allocation strategy for the development of new technologies, for safety-critical systems, over multiple decision periods. The case of the development of a hypersonic passenger airplane is used as an illustration. The model takes into account both the probability of technology development success as a function of the allocated budget and the probability of operational performance of the final system. It assumes that the strategy is to consider (and possibly fund) several approaches to the development of each technology to maximize the probability of development success. The model, thus, decomposes the system's development process into multiple technology development modules (one for each technology needed), each involving a number of alternative projects. There is a tradeoff between development speed and operational reliability when the budget must be allocated among alternative technology projects with different probabilities of development success and operational reliability (e.g., an easily and quickly developed technology may have little robustness). The probabilities of development and operational failures are balanced by a risk analysis approach, which allows the decision maker to optimize the budget allocation among different projects in the development program, at the beginning of each budget period. The model indicates that by considering reliability in the R&D management process, the decision maker can make better decisions, optimizing the balance between development time, cost, and robustness of safety-critical systems.     

Strategy, structure, and performance issues of precompetitive R&D consortia: insights and lessons learned from SEMATECH

This paper examines the evolution of the role, structure, and orientation of SEMATECH in supporting the competitiveness of U.S. semiconductor industry between the late 1980s and the late 1990s. SEMATECH overcame its early challenges and succeeded by shifting its emphasis from horizontal (competitive) to vertical (precompetitive) collaboration, and then to a combined horizontal/vertical form (competitive). This evolutionary path in structure and strategy has broad implications for future relations between SEMATECH and the semiconductor industry as a whole, as well as industry R&D consortia in general. These implications are explored by detailing recent strategic developments at SEMATECH and their relationship to the market environment and structure in the global semiconductor manufacturing industry. This analysis is then extended to explore the implications for strategic research partnerships in other industries, which share particular salient characteristics with the semiconductor industry.     

The organization of innovation and market dynamics: managing increasing returns in software firms

Many contemporary markets, particularly markets of information technology products and information services, are characterized by increasing returns, including those resulting from bandwagon and network effects. At the same time, in larger firms, innovation often takes place in distinct units that are semi-autonomous and that have the responsibility for more than one phase in the product development process. In the most extreme case, a separate profit center is created within which research and development (R&D), production, marketing, and related activities are fully integrated and that has its own responsibility for external relations: an internal innovative venture. The central issue in this paper is the relation between the way firms organize their innovative activities and the market dynamics caused by bandwagon and network effects. We focus on the decision-making actors and we propose a categorization of causes of increasing returns and definitions of bandwagon and network effects that are consistent with this aim. We investigate the extent of internal autonomy of the unit, the extent of the integration of R&D, marketing and other activities in the product development process, and the extent of external autonomy. Three cases of projects creating software products, two of them in the same firm, demonstrate that the organization of innovation and the dynamics of the market are mutually dependent. More in particular, we hold that higher autonomy of teams, particularly in managing external relations, is important to cope with and manage bandwagon and network effects.     

Innovation and competition in standard-based industries: ahistorical analysis of the US home video game market

This paper examines the competitive dynamics in a standard-based industry through a historical observation of the US home video game industry. The paper focuses on the theoretical issues of switching costs, installed base and complementary goods as critical factors of dominant designs and firm success in a network-based industry. The authors' analysis reveals multiple stages of technological innovations and changes of market leadership and industry standards during a relatively short history of the industry. The industry exhibits six generations of technological changes in video game consoles and complementary products, with each generation represented by a new set of competitors, dominant designs, and market leaders out-competing the leaders of the prior generation. Their analysis confirms the efficacy of traditional tenets of successful strategic management in a network-based industry, such as the importance of technological innovation, building entry barriers, protecting firm-specific assets, competitive pricing, brand recognition and effective channel management. These traditional strategies, however, should be geared to achieve new strategic goals, such as building installed base and a network of complementary products, that are critical success factors in competing in a network-based industry     

The underlying event model for approximating probabilistic dependence among binary events

This paper presents a model for approximating positive probabilistic dependence among binary (success/failure) events in decision, economic evaluation, and risk analysis problems. It is not always feasible to obtain the probabilities needed to completely specify the joint probability structure among the binary events in real-world problems, so simplifying assumptions such as independence that require only the marginal probabilities are frequently employed. The proposed model requires the assessment of only one conditional probability in addition to the marginal probabilities. Extensive numerical studies show that it produces more accurate joint outcome probabilities, expected values, and certainty equivalents than commonly used approximations. Binary events are important in a variety of practical problems, such as exploring geologically related petroleum exploration prospects, conducting related R&D projects, or pursuing related lawsuits. The proposed model addresses a practical need for better modeling of dependence in such problems, and it is operational.     

The Evolution of Korean Information Infrastructure and Its Future Direction: A System Dynamics Model

The recent technological and industrial revolution dictates a new approach in constructing Korean Information Infrastructure. Lacking past data on the newly emerging markets, econometrics methodologies cannot accurately forecast future paths of advanced networks, let alone dynamic impacts of public policies. In this paper, we have built a system dynamics model of the Korean Information Infrastructure and simulated diverse policy measures including market integration and government initiative in investment for experimenting their effectiveness. The most counterintuitive result of our research is that the market integration policy will facilitate CATV networks at an early stage until the year 2010, but will result in a diminished market size in the long run. With the system dynamics approach, we can enhance our understanding of the complex policy systems and get valuable insights through learning by modeling and simulation.     

Emerging technology-evaluation methodology: with application tomicro-electromechanical systems

A triple-gateway methodology for evaluating emerging technologies at a very early stage of their development, to avoid costly investments that have little promise, is proposed and applied to four cases of microelectromechanical systems (MEMS). The methodology postulates that a technology must pass through three gateways to become commercially or socially worthwhile: a market gateway, a systems management gateway, and a technology gateway. The relevant issues for each of these gateways are examined. In the market gateway analysis, new users, new skepticism about `improved' performance characteristics, requirements for behavior adjustment by the user, competitive technologies, unpredictable technological developments, and legal barriers are examined. In systems management gateway analysis, the organizational structure of the firm is considered. For the technology gateway, four elements of technology uncertainty, namely, innovativeness, number of constituent technologies, manufacturing difficulties, and institutional changes required to introduce the new technology, are discussed     

How many R&D projects to develop?

The eventual success of any early research project is uncertain. It has been generally recognized that commercial and applied research projects need to be screened prior to undertaking extensive development effort. But how many projects should be continued into development? This paper presents a model to determine an average optimal number of research projects to be developed. The research and development is viewed as a two-stage process, where the task of research is to reduce the uncertainty for eventual development. Research projects consist of both technical and business evaluation, including marketing research. The number of research projects undertaken should be a function of the cost effectiveness of the research effort and the ability of the organization to support the development effort. We have created an analytical model of research and development based on the concept that the function of research is to improve the likelihood of development success. Based on this model and within its limitations, we conclude that (1) an optimum fraction of projects that should be developed usually exists and (2) that optimum fraction is critically dependent on the relative average research project cost and effectiveness compared to development     

Academia-industry joint R&D of VLSIs dedicated to smart appliances

This article discusses three projects among the recent academia-industry joint R&D activities of the author's laboratory. The projects are: a W-CDMA baseband modem, performance estimation at architecture level for embedded systems, and DSP implementation of 3-D sound synthesis.     

Managing R&D alliances within government: the "virtual agency" concept

The virtual agency concept is now used within the United States Government as an alliance approach to manage large research and development (R&D) processes across departments. This paper examines the history of the virtual agency concept and its important characteristics. The paper identifies the potential benefits and associated risks involved in managing R&D within a virtual agency. Three cases are examined where the virtual agency concept has been applied to R&D programs: the High Performance Computing and Communications initiative, the Next Generation Internet, and the Partnership for a New Generation of Vehicles. The case studies indicate that the R&D process is attempting to balance formal process controls with the agility to adapt rapidly to new research opportunities. Virtual agencies can be used to improve organizational efficiency, improve knowledge transfer, increase interoperability through standards, provide better alignment of agency missions with national policy, and introduce increased flexibility into the R&D process. At the same time, the virtual agency concept has major risks including inefficiencies due to organizational complexity, the danger of collective myopia, the problem of adopting standards too early, the difficulty of reaching objectives in a loose organizational structure, and the problem of properly balancing the tension between agency mission objectives and national policy agendas.