Chapter 3 Research & Development

CHAPTER OUTLINE
Definition of R&D

Basic concepts in R&D and R&D management

Technology creation through R&D Categories of R&D R&D needs Funding for R&D

 Processes in R&D management

Stages of technology development Generic technology portfolio model

Problems in implementing R&D

Establishment of R&D unit in organizations

Human Resource Management in R&D

Definition of R&D
Any creative systematic activity done in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this knowledge to devise new applications.

 Apa-apa aktiviti kreatif yang sistematik yang

dilakukan untuk meningkatkan pengetahuan, termasuk pengetahuan manusia, budaya dan masyarakat, dan menggunakan pengetahuan ini untuk mencipta aplikasi baru

JTH 3033 Chapter 3

Technology creation through R&D

Can result either from individual or a group

effort.
Previously, individual efforts of inventors and

trial & error approaches were dominant modes used to develop technology.
Nowadays, complex organizations involving

many employees have been established to conduct R&D activities & scientific approaches to problem solving has been widely utilized.
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 Contemporary R&D involves coordinating the

activities of various disciplines to contribute to technological progress.

A company should engage in R&D to the extent

necessary to create a strong technology portfolio to support its activities.

A technology portfolio can be selected to

support all aspects of the companys technology, from pure research to development, to maintaining and embracing existing business.

Innovation interactive model

Latest sciences and technology advances in society
TECHNOLOGY PUSH
response

Idea

R&D

Manufacturing

Marketing

Commercial Product

response

MARKET PULL

Needs in society and the marketplace

Categories of R&D
Basically R&D can be categorized into

3 major types:
Basic research Applied research Development

Stages of technology development

Technology enhancement Development Applied research Basic research
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Basic research
To gain fuller knowledge or understanding of the subject

under study
No specific practical aim or application and commercial

objectives
Involves the creation of new knowledge; fundamentally

risky
Advances scientific knowledge Essential for new discoveries and the growth of

knowledge
Can either be pure or oriented
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Examples of Basic research

a) Developed from solar system and examines how the power in solar react.

b) Investigation of particle physics; examines how particles in an atom interact.

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Applied Research
Utilize the new knowledge developed by the basic

research to create new products.

Gaining necessary knowledge or understanding

necessary to meet a recognized and specific need

For commercial purposes Less risks than in basic research A mix of science and engineering

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Examples of Applied Research

a) Solar power system

b) Particle detectors: Medical imaging

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JTH 3033 Chapter 3

Development
Systematic use of knowledge or understanding

gained from research

Directed towards production of useful products or

processes
Includes the design & development of new or

improved sciences
More of engineering rather than science

Connecting a link between research and the

commercial use of ideas

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Examples of Development
a) Roof solar, solar modules, solar water heater, solar car etc.

b) Scan machine

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Technology enhancement
Continuous effort by scientist & engineers to

support and improve existing or developing technology.

Aims to improve performance parameter of the

technology, lengthen the technology life cycle & foster incremental innovations.

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R&D needs
Jain & Triandis (1990) proposed the following

R&D needs:
Normative needs Comparative needs

Forecast needs

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R&D needs
Normative needs
Research is directed toward satisfying the needs of the user, the user being primary or follow-on beneficiary of the research product.

Research is driven by the need to stay in the race with competitors.

Comparative needs
Research is driven by the forecast of changes in technology, products, consumer behaviour or new regulations.

Forecast needs

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Establishing R&D unit in organizations

The organization must first determine its level

of technology.
The R&D unit established must be clear on the

organizations specific goals and objectives; as well as its technology portfolio, products and internal processes. strong background in the field related to the organizations technology portfolio.

Normally the unit is led by a technologist with a

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HRM in R&D
Special attention must be given to these issues:
The effects of technological change on the skill

requirements of the workforce

Matching & training the skilled workforce to meet the

requirements of new technologies

Obsolescence of professional staff and the continuing

need for professional development activities.

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 The role of technological gatekeepers and internal

entrepreneurs
Social consequences of technological change

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Funding for R&D

Currently there are 2 known methods for

funding R&D activities in organizations:

R&D is supported as an overhead (OH) expense.
R&D is supported as an investment.

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R&D as OH expense
Management considers R&D as a necessary cost of

the business.
Suitable for projects directed toward knowledge

building; which exploratory or basic research is undertaken as necessary in technology portfolio.

LIMITATION: difficult to determine the appropriate level

of funding that will not cause a problem to a companys financial status.

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R&D as investment
Funds are allocated to R&D on the basis of the

companys traditional financial criteria justifying capital budgeting.

Most common as Return on Investment (ROI)

ROI is suitable for justifying R&D projects at the

downstream end, when uncertainty of outcome is reduced or eliminated.

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Role of R&D: Business view

R&D and its link with businesses

R&D for existing businesses

Drive new businesses Business opportunities arise

Exploratory research

Defend, support and expand

Ensure the business able to compete and exploit all opportunities availability

Broaden & deepen technological capability

Develop understanding of technology that the business is using or may use

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Problems in R&D
Scientists becoming managers
Inappropriate organizational structures Business oriented research: Scientists as salesmen De-emphasis on long-term research Failure to transfer research Increasing financial pressures Frequency of meetings

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References
Tarek Khalil, 2000. Management of Technology: The key to competitiveness and wealth creation, McGraw-Hill International Edition, Singapore. Harrison, N. and Samson, D.,2002. Technology Management: Text and International Cases, McGraw-Hill Irwin, US.

Betz, F., 2003. Managing Technological Innovation: competitive advantage from change, John Wiley & Sons, US.
Betz, F., 1987. Managing Technology: Competing Through New Ventures, Innovations, and Corporate Research, Prentice-Hall, US

White, M.A. & Bruton, G.D. (2007). The management of technology and innovation: A strategic approach, Thomson South-Western, US.

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