2. Most Technological Innovation Takes Place in Business You Must Understand the Business Viewpoint Even if You’re in Security, Health or Environment, if you Want to Guide or Stimulate Innovation
20. Old Theory: Boston Consulting Group (BCG) Divides Businesses into Dogs : Sell! Cash Cows : Milk! Low Hold Stars : invest! High Low High Growth/Market Share
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22. 3. Start-Up Firm, State-of-the-Art Technology (These Firms are Vulnerable, but May Have Technologies Critical for Security, Environment, Health or Other Public Purposes)
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33. The More Sweat Equity You Have, the Less You Have to Give Up to the Venture Capitalist. (But Don’t Be Too Greedy: 100% of Zero is Zero)
40. Moving Up the Value Chain Carries Big Rewards, but Also Big Risks It’s Your Product. You Find the Market, Develop the Product, Redesign it if it Doesn’t Sell, Fix it if it Doesn’t Work, and Keep up with the Competition. If the Market Disappears, You’re Stuck.
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Hinweis der Redaktion
Corporate: Respond to Strategic Challenges and Opportunities (Recall Bucolic Post-War Corporate Laboratories) Business Unit: Responds to Immediate Needs of Existing Business Production Bottlenecks and Quality Glitches Improvements in Existing Products Extensions in Product Line Response to Customer Requests
Private R&D soared during the 1990s and is still high But it’s mostly development of new products to take advantage of the explosion in information technology (maturing phase of Kondrateev cycle) Research is mostly tied to existing product areas Long-range research at the corporate level is much reduced, in part because of modularization: only IBM remains of the former giants (GE, AT&T, etc.), And even its efforts are smaller.
Rationalize Before You Introduce Technology GM-Perot Merger: Automate a Poor System at Great Expense A Fast, Inefficient System Contrast with Saturn: Introduce Japanese Management, Add a Little ‘Technology’ Be Aware of the Organizational and Human Consequences of Introduction of New Technology Co-Opt or Retrain Those Who Will be Responsible for Implementation: Unions, Teachers, Salesmen, Distributors
Only Blockbusters Justify >$1/2 Billion in Development Costs to Meet FDA Requirements Profits Depend on a Few Such Blockbusters – A Very Fragile System As Patents Expire, Tremendous Pressures to Replace Blockbusters with New Cash Cows Stimulus to Research but also to Fraud, Cutting Corners Companies Fiercely Defend Intellectual Property Rights Future Emphasis on Personalized Medicine (Tailoring Recommendations to Individual Genome) puts this Model at Risk Much Weaker Economies of Scale Requires Redesign of FDA Testing Procedures
Venture Capital is Normally Available in the US at Most Levels of Risk, Except for High Risk, Long Term Applied Research Projects Carried out in Government Laboratories The “Valley of Death” Between First Working Model and a Viable Business This Follows from the Institutional Divide between Basic Research (Usually at a University or Government Laboratory, Funded with Public Money) and Product Development (in a Private Firm, with Private Money) A Few, Important but Relatively Modest Government Programs Try to Bridge this Gap
Venture Capital is Normally Available in the US at Most Levels of Risk, Except for High Risk, Long Term Applied Research Projects Carried out in Government Laboratories The “Valley of Death” Between First Working Model and a Viable Business This Follows from the Institutional Divide between Basic Research (Usually at a University or Government Laboratory, Funded with Public Money) and Product Development (in a Private Firm, with Private Money) A Few, Important but Relatively Modest Government Programs Try to Bridge this Gap
Desire to Move Up-Market to Higher Technology and More Profitable Links of Value Chain. This May Not be Easy: Higher Links in the Value Chain May Require Different Skills, or Public Policies and Infrastructure Investments The Most Lucrative Parts of the Value Chain – Especially Brand Definition and Knowledge of Consumer Demand, but Sometimes Processing and Associated Technology -- May be Tightly Held Must Invest in Technology Absorption and Eventually in Own Research
