Standard and Innovation: Management and Policy

1. ICES Workshop 2011 Standard and Innovation: Management and Policy Dr. Jin CHEN Qiushi Distinguished Professor of Innovation Management, College of Public Administration, Zhejiang University, China June 27th , 2011

2. Standard and Innovation • Managing the creation process of standard: Case of Supcon • Policy suggestions

3. Standard War for Innovation Leader

4. Far from being a barrier to innovation, standards can be an important driver. • Standards give innovators a level playing field, allowing solutions from different suppliers to work together (known as “interoperability”) and competition between new and existing products, services and processes. • They also help diffuse knowledge and encourage technology to be applied in new ways, which may trigger innovation. • Standards provide legal security for innovative companies, creating large-scale markets and building confidence among consumers. • www.europe-innova.eu/archive/standardsnetworks

5. To promote innovation is a key issue at political, economical and professional levels. • Standardization can play an important role in support of innovation management, as it plays for safety, quality, environment and interoperability. • www.innovationmanagement.se

6. New Audi A6: setting standard in innovation • With its light body, sporty chassis and a wide array of new assistance and multimedia systems, the full-sized sedan is packed with innovative solutions in every area of technology.

8. MacDonald, KFC, Starbucks, UPS, Disneyland, Hollywood…

9. China’s catch-up from Made in China to Invented in China • China aims to the moderate innovative country by the year of 2020.

10. Branding! 中国最有价值品牌排行 中国十大世界级品牌 首批中国的世界名牌 NO.001 亿元 1、Haier 海尔 702亿元 Haier 红塔山 一汽 NO.002 长虹 2005年8月30日，世界著名媒体－－英国《金融时报》公布了“中国十大世界级品牌”调查结果，海尔荣居榜首。 海尔连续五年蝉联“中国最有价值品牌”冠军。2006年，海尔品牌价值高达749亿元。 国家质检总局评选公布首批三个中国世界名牌，海尔包揽前两名。

11. From patent competition to standard competition: 86 national standards and 3 international standards Global standard Country standard • Network electrical home appliances • The house integrating • The performance of the ultra-low temperature freezer and method of testing • Portable fridge The water heater of Haier defends electric wall technology 6

12. U-home by Haier 数字化家电一定会改变我们的生活……

13. CIMC: Evolution of strategy development 适时启动适合中集战略、有生命力、有能力整合的新业务。 海洋工程 Ocean oil 能源化工装备 Energy facility 道路运输车辆 SP vehicle 通过优化管理，研发创新，成为全球海洋油气勘采装备提供商。 空港设备 Air-support 搭建能源、化工、食品装备的全球化营运平台，域全球领先的装备制造商以及整体解决方案供应商。 集装箱 Container 不断内涵优化，提升全球化营运水平，成为中国专用车领导品牌以及全球最主要的供应商。 为全球机场提供优质的地面设备和服务，成为登机桥最主要的供应商。 通过完善网络布局，以及业务模式创新，不断提升集团在集装箱制造产业的竞争力，并引领集装箱制造产业发展趋势。

14. 集装箱 Containers ·Active participator to international standard and a leader of national standard

15. Corporate strategy Technology strategy Basic technology Product development Manufacturing technology Mot platform: patent and standard R&D center HR Motivation Innovation Platform of CIMC

16. However, China is still lack of innovation capability, especially at standard. • Standard is the weakness of innovation capability: most national standards are old dated and few international standards reached, China owns 0.21% among 14941 items of ISO and 0.28% at IEC.

17. Managing the Creation Process of Standard • Standards creation is an important issue for the healthy development of industries at the international arena. • Up to now, most extant research has focused on investigating economic, strategic rationale and conditions responsible for standards creation and economic payoffs to the stakeholders, the process of standardization has largely been ignored within the research community despite the tremendous importance of standards in modern society (Choi et al. 2004; Björk and Laakso 2010).

18. According to the socio-technical models, standardization process is often viewed as collaboration and negotiation processes between stakeholders and is characterized by dynamic interactions among stakeholders such as technology providers, user organizations and other standards bodies (Choi et al. 2004). In fact, it is a coalition of organizations and groups of individuals working together towards a common goal that make standards happen (Saltzman et al. 2008).

19. According to the innovation process models, standardization can be seen as an innovation and product development project (Björk and Laakso 2010) covering from basic research to product design, manufacturing and introduction (Miller and Morris 1999). In both regards, managing the standards creation process is to deal with the relationship with project partners at the different development stages.

20. we conduct a longitudinal study to explore the standards creation process in which a project team has initiated, planned and selected relative cooperative partners and organizational modes to fulfill the project. • Specifically, the case of Ethernet for Plant Automation (EPA) standard in SUPCON based on the project management and innovation management literature.

22. After the stage of basic research of EPA project, SUPCON starts to make the most of its advantage in industrial application and practice. It actively makes alliance with other leading firms within the operation field, • SUPCON creates a technology development club called ‘EPA club’ which puts forward a lot of valuable suggestions for SUPCON’s enhancement. • SUPCON contacts timely the lead users to obtain feedback about technology and product to make the standard more perfect.

23. Under the support of SAC from the national level, the EPA technology of SUPCON had been recognized as the international standard by IEC. In October 2007, SUPCON, as the first domestic enterprise, obtains the international standard for field bus (IEC61158/ Type 14) and international standards for real-time Ethernet (IEC 61784-2 /CPF14) in industrial automation.

24. SUPCON further expands the EPA club in which at last the number of firms, universities and research institutes altogether exceeds about 100. SUPCON contracts with the club firms and provides them with preferential treatment, allowing them to using the standards at free. • On the other hand, SUPCON in alliance with the main members of the EPA club continues to apply for the national research funds for standard industrialization.

25. Table 1 Selected partners and corresponding organizational modes along the EPA realization process

26. Policy suggestion • Standard as the first priority and new indicator for innovation capability. From R&D expenditure, patents and papers to Standard. • Both at technical standard and service standard. • Setting the standard patent.

28. Setting Standard network. Strategic Alliance of Technological Innovation in China should pay more attention to industrial standard. • The Europe INNOVA Standards Networks focused on integrating standards in innovative products, services and business practices and on demonstrating the benefits of using standards in six different industry and services areas. • Using existing standards better • Award-winning project • Standards for better products • Spreading the word

29. Taking standard and its income as the new competitive advantage for the company. • CEOs and other executives should provide strong incentive and management system for standardization, from copy cat to a vision of changing the world.

30. Managing the creation process for standard. • The innovation project should be selective open (Henkel 2006) which in our case means the partners and corresponding organizational modes being chosen should vary at each stage and even at the single stage the openness to partners is also different.

31. Governments play an important role at the standard application and exploitation process which is noteworthy for high-tech firms in developing countries as it faces a lot of dilemma in resources, such as research funds, talents and international fame.

32. Thanks chenjin@zju.edu.cn