An introduction to New Product Development (NPD)

New products Development: Open Innovation and Technology Transfer

New Product Development- Open Innovation and Technology Transfer

Learning Objectives
1. Recognize the importance of the concept of technology/knowledge transfer with respect to innovation management 2. Provide a summary of the process of technology/knowledge transfer 3. Examine the various models of technology transfer 4. Assess the importance of itnernal organization factors and how they affect inward technology transfer 5. Explain why a receptive environment is necessary for technology transfer 6. Identify the different barriers to technology transfer 7. Recognize how tacit knowledge links technology transfer and innovation

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Background
Overview
Paradigm shift from labor and capital intensive industries to knowledge and technology Internal development too uncertain, too expensive and too slow for the rapid technological changes in the market Corporations trade in technology in world markets just as they do in other goods and services (DFI International, 1998:93)

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The Economic Perspective of Technology Transfer

Can be transferred to

Existing R&D projects and developed technology which has already been paid for

Industry and private enterprise

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Open Innovation
Trend of shifting away from closed systems to new mode of open systems involving a range of players distributed up and down the supply chain Strong linkage within the innovation process between the external environment of the firm and internal environment

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Technology Transfer
Technology transfer is the application of technology to a new use or user. It is the process by which technology developed from one purpose is employed either in a different application or by a new user. The activity principally involves the increased utilization of the existing science/technology base in new areas of application as opposed to its expansion by means of research and development (Langrish et al., 1982)

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Information Transfer and Knowledge Transfer

Information is central to the operation of firms Stimulus for knowledge, know-how, skills and expertise The application of these knowledge then leads to actions and skills

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Models of Technology Transfer

Licensing Involves the technology owner receiving a license fee in return for access to the technology Science Park Model academic scientists will have the opportunity to take laboratory ideas and develop them into real product e.g. Silicon valley Intermediary Agency Model act as the intermediary between companies seeking and companies offering technology Directory Model The produced directories of technology available from the universitys own research laboratories e.g. www.patentexplorer.com

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Models of Technology Transfer

Knowledge Transfer Partnership Model teaching company scheme studies part time for 2 days a week and 3 days working on the project Ferret Model qualified scientists and engineers who would ferret around for interesting defense technology that could have wider commercial opportunities Hiring Skilled Employees Hiring people with the necessary skills and knowledge Research Clubs Funded program which tries to bring companies together with common interest in particular research area Consultancy Consultants are able to offer help, advise and useful contacts to get the research project to a flying start

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Limitations and Barriers to Technology Transfer

The difficulty of applying other peoples technology and the need for this technology to be in such a form that organization can reap some benefits NIH Syndrome Not invented here syndrome Tendency for project group of stable position to believe that it possesses the monopoly of knowledge in its field
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Internal Organizational Factors and Inward Technology Transfer

Types of companies Innovators: The first company to adopt a new idea Initiators: The firms that adopted the idea soon after the innovators Fabians: The firms who adopted the idea only after its utility was widely acknowledged in the industry Drones: The last firms to adopt new ideas
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Internal Organizational Factors and Inward Technology Transfer

Factors leading to technology transfer
High quality of incoming communications A readiness to look outside the firm A willingness to share knowledge A willingness to take on new knowledge, to license and to enter joint ventures Effective internal communication and coordination mechanism

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Internal Organizational Factors and Inward Technology Transfer

Factors leading to technology transfer
An awareness of costs and profits in R&D departments Identification of the outcomes of investment decisions Good quality intermediate management High status of science and technology on the board of directors High quality chief executives High rate of expansion

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Conceptual Framework of Technology Transfer

Activity Awareness Association Assimilation Process Describes the processes by which an organization scans for an discovers what information on technology is available Describes the processes by which an organization recognizes the value of technology(ideas) for the organization Describes the processes by which the organization communicates these ideas within the organization and creates genuine business opportunities Describes the processes by which the organization applies this technology for competitive advantage

Application

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Identifying External Technology

The Importance of Scanning and Networking
Scanning and networking as an informal and unassigned activity Key characteristic of technically progressive firms is high quality of their incoming information For the purpose of maintaining order and knowledge base Each organization research activity represents a fraction of the worlds total scientific and technological activity Important to ensure they are aware of technology around

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Managing the Inward Transfer of Technology

The final stage of application of the business opportunity for competitive advantage Organization brings about commercial benefits from the launch of a new product, improved product or manufacturing process

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Organization Context- Open innovation and technology transfer

Acquisition of technology from outside

Level of Learning

Individual Continual flow of tacit and explicit knowledge

Group

Organization

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Tutorial
1. Explain the importance of tacit knowledge to the technology transfer process 2. Explain how a firms internal activities affect its ability to acquire external technology

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 Effectiveness in the transfer process. E.g. Staff Expertise Convert into long term organization competitive value. E.g. Allow the organization to compete on the same cost or technology platform Reduce dependency on foreign/exclusive technology. Through the tacit knowledge acquired, these tacit knowledge can position the organization as a more competitive organization. Enhance long term R&D progress. Using the technology acquire, business will be able to leverage on the know how to further innovate the business.
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 Staff readiness to adopt external technology e.g. Effective New Technology Training Business cross functional integration and coordination. E.g. Reallocate human resource and adapt to dynamic business environment. Significant changes in overall business processes to accommodate new technology acquisition. Integrating technology into current operations Finance readiness to acquire new technology. E.g. Sufficient cash flow and sustainability of long term business. A form of motivation to retain and enhance value of employees. e.g. Google and Digi empower their staff to be innovative at work place with time allocation for creativity
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