Innovation - Wiki

School of Business
Yonsei University
Introduction &
Core Concepts of
Management of
Technology
Sung Joo Bae
Associate Professor
Technology & Operations Management
Class Wiki
• Extra material related to the class + team
wikis for team projects
http://sjbae.pbworks.com/teaching/
Professional Standards
•
•
•
•
•
Attendance
Being on time
Being prepared to discuss the case
Teamwork
Respect for the instructor and fellow
students
• No Laptop Policy
Management of Technology (MoT)
• Interdisciplinary academic field
• Integration of science, engineering, design,
and management knowledge and practice,
etc.
• Related topics at the firm level
• Individual/team creativity, NPD project
team & mgmt, R&D mgmt, technology
strategy, technical change & firm failure,
product design, engineering mgmt,
innovative organization, patent strategy,
etc.
Definition?
• Creativity
• Invention
• Innovation
Definition?
• Creativity is the ability to produce novel
and useful ideas in any domain
• Invention is the creation of useful goods
(or ideas)
• Innovation is the successful
implementation (product, service,
process, structure…) of creative ideas
within an organization
• Diffusion of innovation
(Source: Amabile, 1996)
Same Perspective…
"Innovation has been essential to our prosperity
in the past, and it will be essential to our
prosperity in the future"
- President Obama, 2009
“Innovation is the core of our national
development strategy and a crucial link in
enhancing the overall national strength”
- President Hu Jintao, 2007
Policy concerns related to MoT
• economic growth by stimulating
innovation
• technological change
• source of innovation
• national R&D management & technology
development
• impact of technology on society, firms,
individuals, and nature
• patent policy
Class Overview
Sources of
Innovation
Architecture
Of
Technology
Patterns of
Technical
Progress
Technical Change
Failure of
TechnologyOriented Firms
Nontechnological
Innovation
Platform
Strategy
Technology
Forecasting &
Portfolio Mgmt
Appropriating
Innovation
Organizing
for Innovation
Management of
Technological
Innovation
Appropriating
Innovation
Today’s Economy in General
• Rapid technological progress everywhere
• Ever-increasing performance of the
products – any exception?
• Many industries in a state of saturation
• But many industries still emerging
• Information technology brings the cost of
communication down
• Widely available low-cost production
(outsourcing) puts more emphasis on
innovative design
• Pressing issues: climate, hunger, natural
resources, etc.
Imitation to Innovation
Model of Technology Development between 1960 and 1990
Technologically
advanced countries
Product Innovation
Process Innovation
Rate of Innovation
Time
Fluid (Emergence)
Transition (Consolidation)
Technology Transfer
Technology Transfer
Specific (Maturity)
Technology Transfer
Generation
Catching-up
countries
Improvement
Assimilation
Improvement
Technological
Capability
Acquisition
Assimilation
Acquisition
Time
Current status of South Korea
Korea, No. 1 in global market share in 143 products
113
2008
131
121
119
2009
2010
2011
143
2012
Source : Korea Ministry of Trade, Industry and
Energy(2013)
Smartphone 30.2%
(Samsung Elec.)
D-RAM 41%
(Samsung Elec.)
Flat Panel TV 27.7%
(Samsung Elec.)
Liquid Crystal Panel 24.6%
(LG Display)
Current status of South Korea
Paradigm Shifting : From Fast Follower to Creative leader
Source : IDC’s latest Worldwide Quarterly Mobile Phone Tracker report
Current status of South Korea
Interesting facts in Smartphone Market
Korean suppliers in iPhone
Current status of South Korea
Interesting facts in Semiconductor Market
Announce the plan for investment in equipment(Toshiba & Sandisk)
Vs.
Announce the mass production(Samsung Elec.)
News on the same
specification products within
two-hours interval
Samsung Electronics & Hynix
has over 50% global M/S
Current status of South Korea
Samsung reached the largest sales in the world for all of digital products market
Operating
Profit (2009.7~2009.9)
Aggregate value
of listed stocks
Source : Bloomberg(2011)
Current status of South Korea
Hyundai and Kia is global top 5 in 2013 1st half(Sales)
Sales (Bil.
USD)
Variation(
%)
Operation
Profit
(Bil. USD)
Ratio of
profit
(Bil. USD)
Toyota
122
-13
11.8
9.6
GM
76
1
2.7
3.6
Volkswagen
76
1
4.4
5.9
Ford
73.9
12
4.7
6.4
Hyundai &
KIA
60.3
4
5.4
8.9
Honda
56.3
-7
3.2
5.8
Nissan
51.5
-11
2.8
5.5
Daimler
42.9
-3
-
-
BMW
28.5
-4
3.2
11.1
PSA
21.3
-6
-0.27
-0.1
Name
Source : Bloomberg(2011)
Current status of South Korea
Global companies in Korea
Desalination No.1 in the world
- Produce water that can supply
2.2 mil. population a day
Biosimilar: biologic
medical products whose
active drug substance is
made by a living
organism or derived from
a living organism
Current status of South Korea
Aerospace in Korea
Korea Aerospace Industries, Ltd
South Korea Launches Rocket in
Space - Naro Rocket(KSLV-I) -
New Era of Innovation in Korea (2010 ~)
Interaction of different aspects of innovation
Cultural Development
 Creative Minds
Social Atmosphere
Aesthetic Design
Innovation
Organizational Dynamics
Technology
R&D and Technology Development
Entrepreneurship
Culture Development
Psy's "Gangnam Style" is the first video ever to hit a billion views on YouTube.
Culture Development
Global views of K-pop videos on You Tube(2011)
Source : Reorganized based on “Youtube video clicks for K-pop reach 2.3
billion from 235 countries “The JoongAng Ilbo, 2012.1.2”
Culture Development
Trend of K-pop Korean Wave Indices
Source : CEO Information, No. 841, February 15, 2012, published by the
Samsung Economic Research Institute
Culture Development
Success factor behind K-pop : Cultural Diamond Model
Girls’ Generation’s song “Genie” (Sowoneul
malhaebwa) was composed by Design Group from
Europe with lyrics and arrangement by Yu Yeong-jin
in Korea, and choreography by Rino Nakasone
Razalan, a Japanese-American.
Distribution
Method
Creators
Systemized production
- Casting & training (5y)
- Globalized sourcing
Well-planned promotion
- Cooperation with local partners
Active use of
Social media
Consumers
Tech-savvy and
active fan base
Contents
Source : CEO Information, No. 841, February 15, 2012, published by the
Samsung Economic Research Institute
Triple combination of vocal and
dance skills and attractive looks.
Culture Development
Commercial application of K-pop
1) Production Inducement Effect of K-pop for other
industries
Source : CEO Information, No. 841, February 15, 2012, published by the
Samsung Economic Research Institute
2) Industries expected to benefit from K-pop boom.
Social atmosphere
Growing emphasis on individual’s lifestyle drives innovative social atmosphere.
Student’s growing interest in Start-up inside the Campus
25000
22463
20000
18027
15000
# of Start-up student club
# of students who join the
Student start-up club
12248
10000
# of universities that have
student club for start-up
5000
0
639
164
2010
1222
182
2012
1833
190
2013
Social atmosphere
Various start-ups covering broad industries and social problems.
CEO of ‘add2paper’ Haena Jeon(25)
- The company’s employees are all
recent college graduates.
CEO of social venture ‘delight’
Jeong Hyun Kim(27)
-The company produces ‘hearing aid’
-Awarded for ‘Beloved Korean Company’
Social atmosphere
Open platform for ‘idea realization’ – creative economy town
Source : http://platum.kr/archives/14355
Product design
Hyundai’s Design strategy
“IDEA festival” – internal contest for the future design.
-Enhance and expand the R&D staff’s creativity
-Discover fresh ideas for future mobility
Source : Hyundai Motor’s New Thinking for Future Mobility
Product design
Hyundai’s strategies to accelerate design innovation
Promote “Quality” among managers
Hold monthly meetings “relentless about quality”
Use consistent design language across its product range
Use top-down management structure – quicker decision making on design
Learn from competitor
“Hyundai was a fast follower, now we are becoming a leader in the industry,”
Source : http://www.smartplanet.com/blog/design-architecture/how-hyundais-design-strategy-has-paid-off/6168
Product design
The iF Design Award 2013 in Munich, Germany awarded Samsung Electronics a grand total
of 39 awards, including 2 iF Gold Awards
- iF Gold Award Products - CLP-415 and CLX-4195 Color Printer Series & twin tub washing machine
CLP-415 and CLX-4195 Color Printer Series
Source :http://global.samsungtomorrow.com/?p=23236#sthash.XuQx4E4p.dpuf
Product design
Twin tub washing machine – designed for Southeast Asian users
Source :http://global.samsungtomorrow.com/?p=23236#sthash.XuQx4E4p.dpuf
Product design
Collaboration with foreign designers
KIA motors - Peter Schreyer
KIA motors – Christopher Chapman
Product design
Collaboration with foreign designers
Samsung electronics – Chris Bangle
Hyundai motors- Karim Rashid
Product design
Samsung’s value innovation program
Value innovation is achieved only when the whole system of reality, identity and
image of a team project is properly aligned.
Objectives for value innovation program
- Activate CFT(Cross Functional Team) activities in
the initial stage of the NPD process
- Encourage communication and ownership among
CFT members
- Formulate strategy for organization execution
- Build team projects into hit products through value
innovation
Characteristics of the value innovation program
- Analysis of customers’ behavioral psychology from a
zero base
- Logic of product planning in NPD
- Logical decision-making
- Recognition of anticipated problems : risk
management
Source : Value Innovation Program for Product Planning of Samsung
Electronics(2008)
Product design
Samsung’s design oriented product development
Design concept: “thin” and
“glossy” in an organic design
that made the TV seem to be of
one piece – front, back and
stand
VIP Center: Developed the
product concept
- Emotion and lifestyle
- Room decoration
- Picture & Sound etc. (functional)
Engineering
Challenges
1. Slimmer,
Glossy throughout
2. Speaker holes
3. High glossy finish
Solution:
• Reducing the size of
printed circuit board
• Integrated frame
(speaker holes into the
frame)
• New injection
molding technique
Organization culture
The horizontal structure is wide-spread in organization
Case 1
Flexible
Organization
Free
Communication
Organization structure can be very flexible due to the projectoriented approach
Discuss and exchange ideas via Kakao Azit which is closed
community between employees
Organization culture
Increasing the horizontal structure in organization
Case 2
Staff
Remove the
position(rank)
Assistant
Manager
Manager
Open Idea
Contest
Manager
Deputy
Manager
General
Manager
General
Manager
Using idea contest, some business units are established
Technology Development and R&D
Increasing the R&D investment and ratio of R&D to GDP
National R&D
Investment
(Bil. USD)
Ratio to
GDP(%)
USA(‘09)
401.6
2.90
Japan(‘10)
178.8
3.26
China(‘10)
104.3
1.77
Germany(‘10)
92.6
2.82
France(‘10)
57.8
2.25
Korea(‘11)
45.0
4.03
4.03% (1th)
2.48%
45,016(6th)
0.25%
12,810
4
1963
National R&D investment
Source : OECD MSTI(2013)
1997
2011
Ratio to GDP(%)
Technology Development and R&D
National strategic investment – selection and concentration
1970’s
Government Driven
1980’s
Government Driven
 4M/16M DRAM
2000’s
World No.1 M/S
 40.4%('06)
1990’s
2000’s ~
Private R&D
World No. 1 M/s
 64M/256M DRAM
In the early 1990
In the later 1990
Government Driven
Expanding the market
 CDMA
Cellphone
Private Investment
 Increasing the private lab.
 Engineering tech.
Shipbuilding
Semiconductor
1980’s~90’s
 Technology push
 MS10.2%('13)
2000’s
World No. 1 M/s
 MS 37%('13)
Technology Development and R&D
Strategic roles and cooperation between Gov. and private.
In the early 2000’s
1990’s
Industry-academic
cooperation in R&D
Private Investment
Display  Supplying R&D Seed Money
In the early 2000’s
Gov.-Pri. Co-R&D
 WiBro
 Global Mass production
In the middle 2000’s
World Standard and
global development
Present
World No.1 M/S
 40.4%('13)
Present
Rapid market expanding
 Increasing aver.20%
Mobile Internet
Localizing the core technology
1970’s
Introduction of
oversea tech.
Nuclear Energy
1980~1990’s
Intensive R&D
Development of
Korean standard nuclear reactor
1990~
Foundation for
economic development
Technology Development and R&D
The export structure centered advanced product through innovation
The ratio of Top 20 product in Export
56.0%
52.3%
51.8%
49.3%
Med/low tech product
High tech product
In the late 1970’s
1980’s
1990’s
2000’s
Representative National R&D Business
Business
Periods
Fund(Mil. $)
Ultra large scale integrated semiconductor
’86 ~ ’93
278
Next generation semiconductor
’93 ~ ’97
195
Cellphone (CDMA)
Commercializing CDMA
’89 ~ ’96
100
Display (TFT-LCD)
Next generation TFT-LCD
’95 ~ ’01
182
DRAM
05. Technology Development and R&D
Contribution to economic growth and creation of jobs
The ratio of Top 20 product in Export
1970’s
Labor
and
Capital
(82.4%)
Technological
Innovation
(17.6%)
Change in the level of
contribution to
economic growth
Unit : USD. Bil.
111.4
Labor
Technological
and
Innovation
Capital
(45.1%)
(54.9%)
Unit : person
259,000
66,090
81.5
2000’s
65,000
6.9
0.3
0.1
TDX
DRAM
R&D Investment
0.1
CDMA
Sales(until ’04)
key components DRAM
in Auto industry
CDMA
New employment after finishing
the national R&D Business
Challenges ahead
Higher level of global competitiveness
Scientific Competitiveness
0
5
10
15
20
25
30
35
Technological Competitiveness
National Competitiveness
7th
14th
11th
21th
29th
22th
2001
2013
Source : IMD(2013)
What is the role of creativity
and innovation in MoT?
• What does technology solve? What does it
not solve?
– Ian Pearson
• New generation’s role in it
– Don Tapscott