The grand theme of managing technological innovation is the story of technological change and its impacts on society. Historically, this story is both dramatic and ruthless. The drama is the total transformation of societies in the world from feudal and tribal to industrial. The ruthlessness in technological change has been its force, which no society could resist and which has been called the technology imperative. For the last 500 years, technological change has been irresistible in military conflict, in business competition, and in social transformation.
The pace of change in manufacturing technology has accelerated dramatically in the past two decades -- and exponentially since the mid-nineties. Once the purview of a few large American and Japanese corporations, manufacturing advances now emanate from every corner of the world, stimulating a never-ending battle to create the highest-caliber products quickly, efficiently, inexpensively, and in sync with the company's marketing, sales, and customer service strategies. Several new initiatives in manufacturing promise to make manufacturing more flexible and responsive.
Agile manufacturing, quick response manufacturing and virtual manufacturing initiatives in the US are aimed at supply chain efficiency and quick response to changing markets and new opportunities. Virtual manufacturing refers to new manufacturing entities created through very rapid integration of scattered resources in one or several firms. The rise of information technologies and the internet fuels the growth of virtual manufacturing. Business process reengineering, which gained momentum in the nineties is a major force in reducing wasted effort and resources in established manufacturing firms.
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BPR can revitalize established firms, remove rigidity in the manufacturing system and make it more and more flexible and responsive. Manufacturing increase the agility and the quickness of system response using BPR. Innovation Managers Focus on Technology The internationalization of research and development and of other knowledge intensive activities has been continuously increasing. Multinational corporations (MNCs) are the major engine of growth and international technology transfer. MNCs play a key role in the Japanese economy and in the European system of innovation.
They are pushing the frontiers and they need to respond to the changing pattern of innovation in the global arena. Structural changes in global innovation and transnational technology transfer lead to great challenges for innovation managers as well as for decision-makers in government agencies and within the research system. The following trends characterize international innovation activities, new mode of knowledge production and describe why focus should be on technological innovation.
- The increased intensity and speed of innovation and accelerated product obsolescence. Cycle times in consumer electronics and mobile communications have been reduced to six months. Product development times have been shortened in several industries, often induced through competitive pressure of Japanese firms (e. g. in automobiles). More recently, other Asian countries are pushing the frontiers and exerting pressure on Japanese and European firms.
- More and more countries building up strong R;D capabilities and this has led to greater global dispersion of innovation activities. The increased globalization of R;D and the concomitant international sourcing strategies of multinational corporations will be a core theme of this article.
- A third important trend involves the stronger emphasis on application and demand-pull, and the reduced emphasis on basic research and technology-pull, we characterize this as “innovation moving downstream”. The core of value added in the innovation process moves toward the application system and end user side of spectrum.
- In addition to these two types of innovation (research driven vs.lead-market induced), there is a third mode of innovation often promoted in industries and countries with a strong engineering culture and a more technical tradition. For reasons of simplicity, we call this engineering innovation. The core of value added lies in quality and efficiency, and this requires an effective combination of product development, process engineering, supplier involvement and advanced logistics. Engineering innovation builds on a sophisticated network of manufacturers, suppliers and service providers, and also on an educational tradition of sophisticated skills, and workmanship across a wide range of related fields.
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