Session 3 Technical Change

1. Session 3Technical Change 이성호박기범

2. Key word • Demand-pull vs Technology push • Continuity vs Discontinuity • Incremental vs Radical • Innovation Direction • Innovation Source

3. Technological Paradigms and Technological Trajectories

4. Research Question • Why did certain technological developments emerge instead of others? • Are there regularities in the process of generation of new technologies and in technical progress thereafter? • Is there any regularity in the functional relationship between the vast number of economic, social, institutional, scientific factors which are likely to influence the innovative process • Which is Prime Mover?

5. Market-pull theory • There exist a set of consumption and intermediate goods • Demand function are determined by the existence and the forms of utility functions • Demand proportionally more of the goods which embodied some relatively preferred characteristics • The producers realized the revealed needs • Proper innovation process begins • The theory is supposed to explain incremental technical process on the existing products/process.

6. Technology push • Science – Technology – Production • The increasing role of scientific inputs • The increased complexity of R&D activities which makes the innovative process a matter of long-run planning • A significant correlation between R&D efforts and innovative output • Uncertain nature of the inventive activity • No consider economic factors

7. Technological paradigms & Technological trajectories • Technology is a set of pieces of knowledge • Technological paradigm is a model and a pattern of solution of selected technological problem and determinesthe field of enquiry, the problems, the procedures and the tasks. • Technological trajectory is the pattern of normal problem solving activity on the ground of a technological paradigm. • Economic, institutional and social factors are selector which choose technology • Markets operate as selective environment at product stage

8. Discussion • Science의 발전은 누가 이끌어 가는가? • 국가만이 Science발전의 주체가 되는가? • 제도 혹은 사회적 환경에 의해 선택되지 못한 Science는 쇠퇴되어야 하는가? • 유럽입자물리 연구소(CERN) • 2008년 거대강입자충돌기(LHC) 완공 (6조원 소요) • 2013 힉스 입자 발견

9. Discussion • Management 관점에서 Demand-pull과 Technology-push의 중요성은? 단순히 현상을 설명하기 위한 수단인가? • 자원할당,위험관리,경쟁우위 창출,First mover vs fast follower • Technology-pushTheory를 실제 기업 경영에서 어떻게 활용할 것인가?Management화 시킬 수 있는 부분이 있는가? • Xerox’s Palo Alto Research Center 객체지향 프로그램 Ethernet Personal Workstation

10. Discussion • S-curve 관점에서 Technical Change를 설명할 순 없을까? Discontinuity를 위한 지식 암묵기는 아닐까?

11. Discussion • 저자가 주장한 Technological Paradigm and Technological Trajectory에서 제도 혹은 사회적 환경에 따른 기술 선택 Risk를 기업은 어떻게 관리할 것인가? • 어떤 기술이 선택될지 모르는 Risk를 어떻게 관리할 것인가? • 자동차 시장 친환경 기술 ⇒ GM: Fuel cell ⇒ Toyota: Hybrids ⇒ DaimlerChrysler: Diesel ⇒ Honda: Diesel, Hybrids, Fuel cell

12. Discussion • Demand-pull형태의 Radical Innovation은 있을 수 없는가? • 한경희 스팀청소기 • 1999년 한경희 대표가 설립 • 스팀청소기라는 새로운 Product Category를 만들어냄 • 연매출 1500억원 • 2012년 생활가전기업 국내 인지도 3위

13. The Sources of Innovation Chp 1 & 2

14. Functional Source of Innovation • Definition : Categorizing firms and individuals in terms of the functional relationship. • Categorized into User, Manufacturer, Supplier, Other

15. Variation in the Functional Source of Innovation • Functional role of a firm is not fixed. It depends on the particular innovation being examined • Source of innovation differs significantly between categories of innovation. • An Economic explanation (Economic rents) :=> Different expectations of innovation-related profits by each firm make the difference it is necessary that potential

16. Understanding & Managing Distributed Innovation Process • General strategies and rules for generating or predicting innovation are Difficult to identify.=>Suggested way: Field investigation =>Informal know-how trading • Predicting and Shifting source of innovation by managing the distribution of expected innovation profits is Possible.

17. Implication • Innovation Research- Find strong patterns from data and build a understanding of the way innovation-related profits are captured - More complex patterns should be studied • Innovation Management- Modify firms’ organizational arrangements- Develop new tools for analyzing and shifting functional sources of innovation. • Innovation Policy- Develop new tools to measure and influence innovation.

18. Users as InnovatorsScientific Instrument Case

19. Diffusion of Innovations • Mostly researchers employed by universities- Active in speeding the diffusion1) publishing 2) presenting at conferences 3) visiting other scientists • Rapidly picked up by other scientists or by commercializing firms1) other scientists replicate the device and publish papers involving its use 2) commercial version on the market

20. Users as InnovatorsSemiconductor & PC board Case • Purpose : to see the pattern in more “normal” fields before generalizing “users-as-innovators” • Major process steps identified • Definition, Methods taken under same principle

21. Findings • User innovation not restricted to scientific instruments only • Modest amount of joint user/manufacturer innovation activity • Users active in two types of innovations that have not been discussed before.1) users developed all of the technique-only process innovations in the sample.2) users were found to be the developers of all multistep process concepts

22. Diffusion of Innovations • Users of process equipment innovations do not necessarily have an incentive to transfer what they know to an equipment manufacturer. • In fact they might have an incentive to hide what they know to achieve a competitive advantage.

23. User-dominated Innovation Process • It is typically the product user, not the product manufacturer, who recognizes the need, solves the problem through an invention, builds a prototype, and proves the prototype's value in use. • Only commercial diffusion is carried out by the manufacturer.

24. Discussion • 저자는 ‘DiverseSource of innovation’에 대해 경제학적(Economic Rent) 접근을 통해 설명한다.반면 Nelson & Winter(1977)는 ‘generation of innovation’에 대한 profit maximization hypothesis의 한계점에 대해 서술하며 진화론적 접근을 제시한다두 접근은 어떻게 다른가? 서로 대립되는 것인가?

25. Technological Discontinuities and Organizational Environments

26. Overview TechnologicalDiscontinuities OrganizationalEnvironment Uncertainty CompetenceDestroying Munificence Entry & Exit CompetenceEnhancing Interfirm Sales Variance Firm Growth Rate

27. Technological Discontinuities • Competence-Destroying Discontinuities- Require new skills, abilities, and knowledge- Mastery of the new technology fundamentally alters the set of relevant competences within a product class • Competence-Enhancing Discontinuities- Order-of-magnitude improvements in price/performance that build on existing know-how within a product class

28. Hypothesis TestingTechnology & Technological Discontinuities • H1: Technological change within a product class will be characterized by long periods of incremental change punctuated by discontinuities. • H1a: Technological discontinuities are either competence enhancing (build on existing skills and know-how) or competence destroying (require fundamentally new skills and competences). • H2: The locus of innovation will differ for competence destroying and competence-enhancing technological changes.

29. Hypothesis TestingTechnological Discontinuities & Organizational Environments • H3: Competitive uncertainty will be higher after a technological discontinuity than before the discontinuity. • H4: Environmental munificence will be higher after a technological discontinuity than before the discontinuity. • H5: Competence-enhancing discontinuities will be associated with decreased entry-to-exit ratios and decreased interfirmsales variability. These patterns will be reversed for competence-destroying discontinuities

30. Hypothesis TestingTechnological Discontinuities & Organizational Environments • H6: Successive competence-enhancing discontinuities will be associated with smaller increases in uncertainty and munificence. • H7: Those organizations that initiate major technological innovations will have higher growth rates than other firms in the product class.

31. H5 Entry-to-exit ratio : partially supported

32. H5 Interfirm variance : well supported

33. Variation-Selection in the Innovation

34. Evolutionary Process • Variation • Change from current routines and competencies • Selection • Differential elimination of certain types of variation • Retention • Selected variations are preserved, duplicated, or otherwise reproduced • Struggle • Contest to obtain scarce resources because their supply is limited

35. Fixed vs Retractable • Simple design • Reduce the risk of problems at landing • Create extra drag • Increase the length of flight

36. Fixed vs Retractable • Pants Type Gear • Increase need of speed and • need to reduce drag • Retractable gear was dominated

37. Technology Cycle

38. Discussion • 지배적 디자인은 기업에게 어떠한 이익을 주는가?

39. Discussion • 시장경제에서 지배적 디자인은 어떤 문제를 일으키는가? • 지배적 디자인이 기술 발전을 저해하지는 않는가? • CDMA 2300여개 특허 보유 • CDMA 모뎀칩 시장점유율 96% • CDMA RF칩 시장점유율 88%

40. Discussion • Discontinuity와 Continuity를 나누는 기준은? • 생산 관점? 제품 관점? 고객 관점? • Technology-Discontinuity를 달성한 기업은 지속적인 경쟁우위를 창출할 수 있는가? • Apple이 Technology-Discontinuity적인 경쟁우위는 지속될 것인가? • 스티브 잡스 사후 혁신성이 떨어졌다는 평가

41. Discussion • Discontinuity를 이끌어낼 수 있는 product/process를 유의미하게 predict 할 수 없는 것일까? Predict 할 수 있는 가장 빠른 시점은 언제일까? • 비슷한 기술적 특성을 갖는데도 discontinuity를 이끌 수 있었던 것들과 이끌 수 없었던 product/process들의 차이점을 무엇일까? Technological, Market, Legal, and Social factors의 패턴을 분석해 보면 어떨까?