why innovate, management of technological innovation 1 why innovate?

Why Innovate, Management of Technological Innovation

1

Why Innovate?


2

Management of Technological Innovation

Lesson 2Why Innovate?

• Changes in World Industry

• Why Innovate?


3

World

Region

HKSAR

You as Innovator

andTechnicalManager

DragonsJa

pan

China

Main

land


4

Factors of Production and Economic Growth

• Capital (Now, reasonable in HK)

• Raw materials (Nil in HK)

• Land (Very little in HK)

• Labor (Limited in HK)

• Technology or Technovation (Some technology transfer in the past but very little

technovation in HK)Technology and its development need to be managed

effectively for the generation of wealth and resources.


5

Change is the only thing constant these days.

Much of this change is due to growth in technology.

Growth in technology takes place through continual innovations.


6

Changes in world industry• Shorter product life cycles• Shorter product changeover cycles• Higher rate of new product development• Shorter production runs• Quality, and productivity-quality integration

(ISO 9000, zero defects)• Company-wide total quality management (TQM)• Equipment and process technology as a strategic

resource• Flexible manufacturing systems (FMS)


7

• Emphasis on flexibility and innovativeness beyond efficiency and productivity

• Emphasis on customer responsiveness, agility and speed to market

• Worker training and worker participation• Extensive use of CAD, CAM, rapid prototyping• Increasing use of decision support systems (DSS),

expert systems, simulation, etc.• Increasing use of information technology


8

Dominant Trends

• Localization• Automation• Knowledge-intensive nature of production

and service related activities• Faster metabolism through IT and Internet• Transnational strategic alliances between

firms, organization networks and inter-organizational structures.


9

Value of Life: What is important (Japan) [M. Takahashi, 1999]

0

10

20

30

40

50

60

%

MaterialAbundancePsychologicalAbundance


10

Relationship between human beings and nature (Japan) [M. Takahashi, 1999]

01020304050

%Use itFollow itConquer it


11

Common problems in industry

• Over-capacity of production facilities• Increasing market segmentation and saturation• Changing customer values and more exacting user

requirements of cost, quality and performance• Emergence of unexpected competitors across the

world• Unsteady currencies, exchange rates, and markets


12

Toyota’s approach to car manufacturing :

‘It’s a wrong notion to believe that mass production will guarantee you less cost. That was true in the 1960s,in those days, where there was a high demand. But the notion has become a myth that no longer applies in the 1980s and beyond. Now production capacity exceeds demand. For some reason many people in the world still believe in this myth and they still take for granted that if they increase mass production they can reduce costs.’


13

Productivity

Quality

InnovationIndustrialProgress


14

Innovation is not easy

Although innovation is increasingly seen as a powerful way of obtaining competitive advantage and more secure approach to defending strategic positions, success is not guaranteed. After all, innovation is by its nature a risky business. And we need to remember that there is a great deal of uncertainty in innovation, made up of technical, market, social, political and other factors.


15

Innovation is essentialBecause the innovation process is so uncertain,

it sounds that it is forgivable for many organizations to decide not to innovate. But, the approach of doing nothing is rarely an option, especially in the rapid change of the technology and the economics.


16

We have no option but to learn to manage innovation

So the question is not one of whether or not to innovate but rather of how to do so successfully. What lessons can we learn from research and experience, and is there any pattern to these which might be used to guide actions? (Visit the case Study on the “Decline of Wang” here)


17

Per Capita GDP Ranking, 1997

1. Luxembourg

2. USA

3. Switzerland

4. Kuwait

5. Hong Kong (US$26,400)Ref: 1st Report of Chief Executive’s Commission on Innovation and

Technology, September 1998.


18

% Share of Mfg in HK GDP

0

5

10

15

20

25

30

1975 1980 1985 1990 1995 2000


19

% Share of Mfg in HK Employment

0

10

20

30

40

50

60

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000


20

Gross Output of HK Mfg SectorHK$ Billion

0

50

100

150

200

250

300

350

1978 1980 1982 1984 1986 1988 1990 1992 1994 1996


21

Value Added Per Person (HK$)

0

100000

200000

300000

400000

500000

600000

700000

1982 1984 1986 1988 1990 1992 1994 1996

MFG

Fin. & Real Estate

Poly. (Fin. & RealEstate)

Poly. (MFG)


22

Is manufacturing hollowing outin Hong Kong?

Or,Is there an industrial

transformation?


23

Transformation: Mfg Moves to the Mainland To Lower Costs

• Over 4M workers in the mainland

• 1995: HK exports to mainland up by 20%

• 1995: 71% of domestic exports and 40% of re-exports attributed to outward processing activities in the mainland

• 1995: 74% of imports and 82% re-exports of mainland origin


24

A quote from the second report (1999) of HKSAR Chief Executive’s Commission on

Innovation and Technology “There is strong competition [to HKSAR] from

neighboring economies for Hong Kong’s regional role in trade, finance, transportation and communications. With respect to manufacturing, Hong Kong must strive to support and further develop high-value activities. Hong Kong is also facing stiff competition from low-cost economies. A fundamental challenge is how Hong Kong should position itself in the knowledge-based, global economy of the 21st century.”


25

Maslow’s Theory of Human Needs

Physiological Needs

Safety Needs

Belonging and Love Needs

Esteem Needs

Self-Actualization

Needs


26

Human Needs: Maslow’s Theory

• Physiological needs, Safety needs, Belonging and love needs, Esteem needs, and Needs for self-actualization.

• Esteem needs prompt users to move to new products quickly - you buy a new shirt you like even if you already have too many shirts.

• Modern customers are demanding more product variety and more innovative products.


27

Missionaryyou work enthusiastically towardsyour own vision of the organization

Self-fulfilling(and) you identify your own values and goals, and work towards them.

Proactive(and) you identify with the goals you have been set, and activelywork towards them.

Reactive(and) you understand and worktowards the goals you have been set,responding to constraints and limitations

Sluggish(and) you do what you are told(when the boss is looking)

Free

Controlled

Intrinsically motivated• you respond to your own vision• you are creative with high motivation

Extrinsically motivated• you respond to the expectations of others• you are less creative with low motivation

[Petty 1997]


28

SuccessSo I create originaland workable ideas

Self-beliefI trust my abilitiesmy taste, andmy judgement

CourageI am prepared to • take risks• be original• persevere in the face of difficulties


29

Controlling Management Style

It is necessary to control you

You feel powerless,unappreciated, and perhaps resentful

You do poor work.Your self-esteemand motivationfail


30

Trusting Management Style

You are trustedYou feel valued,respected and responsible

You do better work.Your self-esteemand motivationrises

why innovate, management of technological innovation 1 why innovate?

Documents

hk technology

production capacity

mass production

factors of production

process technology

technology transfer

hk land

hk labor limited