Indicators of firm technological capability: validity andperformance implications

Academic researchers and practicing managers in the area of management of technology are faced with a difficult challenge in attempting to measure technological capability at the firm level. A number of different indicators of firm technological capability (FTC) have been proposed and used, however, they have not been systematically evaluated across different industry settings. These indicators include R&D expenditures, patent statistics, and statistics on new product introductions. In this study, the authors discuss some of the relative advantages and disadvantages of these indicators and they assess their validity in the chemical, electronics and pharmaceutical industries. They find that measures of the scale of FTC are relatively consistent across industries, but that measures of the quality of FTC are somewhat less consistent. Finally, they find limited evidence that aspects of FTC quality are related to firm performance     

Determinants of Corporate R&D Investment: An Empirical Study Comparing Korea's IT Industry with Its Non‐IT Industry

In our study, we extracted the market, finance, and government factors determining R&D investment of individual firms in the IT industry in Korea. We collected the financial data of 515 individual firms belonging to IT and non‐IT industries between 1980 and 1999 from the Korea Investors Service's database and investigated the empirical relationship between the factors using an ordinary regression model, a fixed effects model, and a random effects model. The main findings of our study are as follows: i) The Herfindahl Index variable representing the degree of market concentration is statistically insignificant in explaining R&D expenditures in the IT manufacturing industry. ii) Assets, which is used as a proxy variable for firm size, have a positive and statistically significant coefficient. These two results suggest that the Schumpeterian Hypothesis may be only partially applied to the IT manufacturing industry in Korea. iii) The dividend variable has a negative value and is statistically significant, indicating that a tendency of high dividends can restrict the internal cash flow for R&D investment. iv) The sales variable representing growth potential shows a positive coefficient. v) The subsidy as a proxy variable for governmental R&D promotion policies is positively correlated with R&D expenditure. This suggests that government policy has played a significant role in promoting R&D activities of IT firms in Korea since 1980. vi) Using a dummy variable, we verified that firms reduced their R&D investments to secure sufficient liquidity under the restructuring pressure during Korea's 1998 and 1999 economic crisis.     

Inventive payoff from R&D in Japanese industry: convergencewith the West

An attempt is made to determine if investment in R&D and the hiring of college-educated employees result in a higher rate of inventions. The relationship between the input of R&D and inventive output is studied in two samples of Japanese factories, 34 in 1982 and 44 in 1970. These results are compared with findings in a parallel American study. The correlations between R&D and inventive output are similar in Japan and America in the 1980s, despite some differences in the management of innovation in the two nations. Moreover, the most Westernized subsample of Japanese firms in the 1970s had correlations between R&D and invention similar to those observed in the American study. Thus, it is concluded that some degree of convergence may be taking place in R&D management strategies in the two nations     

Israel: a high-tech haven

The author describes how a well-developed military electronics technology, strong governmental support for industrial R&D and an influx of scientific talent from the USSR have endowed Israel with the wherewithal for thriving high-technology industries. He details how the small country has already begun to make its mark in global high-tech commerce     

Federal funding and R&D output in US industrial laboratories

The factors associated with inter-R&D laboratory differences in output from the R&D processes are investigated with emphasis on the influence of federal R&D on the composition of this output. An attempt is made to describe the various categories of innovative output characterizing industrial R&D and to investigate factors affecting the distribution of these activities among industrial R&D laboratories. It is shown that federal R&D allocations significantly redirect a laboratory's output, skewing it toward activities with public-good characteristics     

The impact of technology strategy on firm performance

This study focuses on the link between research and development (R&D) expenditures and two firm technology measures: technological cycle time; and technological strength. The subsequent focus is on the two firm technology measures and firm performance while controlling for firm size and productivity. An empirical test on 49 firms across several industries revealed that the first link was quite weak, possibly caused by the inclusion of much engineering on ongoing operations being included in R&D. However, the overall model results were quite strong, showing that 45% of the variation in firm performance, measured by operating profits, was explained by the comprehensive three-stage model     

Innovation strategy and the R&D-marketing interface in Japanesefirms: a contingency perspective

This study proposes a contingency model suggesting that a firm's strategic position will affect cross-functional involvement and information sharing between R&D and marketing departments in five major new product development stages, as well as the quality of R&D-marketing relations and organizational structure. To test the model, the authors surveyed 274 R&D managers and 264 marketing managers in 315 Japanese high-technology firms. The results indicate that, contrary to anecdotal suppositions of Japanese firm homogeneity, Japanese firms differ among themselves and among the strategic types in several important ways. The results also suggest that the level of R&D-marketing integration should be contingent on new product development strategy, making uniform promotion of cross-functional team integration questionable. Despite the differences in innovation strategy pursued by aggressive new product developers versus nonaggressive new product developers, all three strategic types rank the stages of innovation in a similar manner     

To terminate or not an ongoing R&D project: a managerialdilemma

This empirical study attempts to develop a framework to assist managers in deciding whether to abandon an ongoing research and development (R&D)/innovation project at various stages of R&D. The monitoring framework is based upon the models developed through multiple logistic regression analysis on a data set of 60 successful and unsuccessful projects. The technique determines those factors which discriminate between success and failure of a project. The major advantage of the proposed framework is that it provides a single indicator which can be used to monitor the success of an ongoing project at various stages over its life span. The indicator incorporates the combined effect of all the factors and avoids the problem of setting thresholds for individual factors or success indicators     

Careers: Where the Jobs Are

IEEE Spectrum teamed up with The New York Times to survey 752 IEEE members about the past, present, and future technological trends they are seeing. Rather than looking at industry statistics such as sales or market values, this paper focused on tracking research and development efforts across 19 technological areas as well as academia. This focus was chosen because, apart from the fact that R&D is specifically the work many engineers do to earn their living, R&D staffing and spending act as a general bellwether: declining investment in R&D typically indicates an area that isn't set for high growth or is experiencing commoditization of its products and the attendant squeezing of profit margins     

Foreign R&D in the United States

A new study reveals a marked rise in US activity of R&D by foreign companies. How large is direct foreign investment in R&D in the USA? What exactly do these facilities research and develop? Why have non-US companies set up new operations or expanded existing facilities for R&D in the USA? How do these firms decide where to locate? To address these and related questions, the operations of over 50 European, Japanese, and South Korean R&D facilities were studied. All belong to the the electronics, biotechnology or automotive industries. The results of this study are analysed     

Message and source factors, market uncertainty, and extrafunctionalinformation processing: hypotheses and empirical evidence

This article examines how the perceived quality of extrafunctional information improves the innovation management process and contributes to success with innovations. Data collected from 420 Japanese managers and 270 US managers are used to test hypotheses about the antecedents of satisfaction with extra-functional information and the impacts on new product performance. The results demonstrate that the level of marketing and R&D managers' satisfaction with extrafunctional information is an important predictor of new product success and financial performance. The results also show that marketing and R&D managers differ significantly in their preferences and criteria for evaluating extrafunctional information. The empirical evidence suggests that the factors that increase R&D's satisfaction with market information are not necessarily the same as those that increase marketing's satisfaction with R&D satisfaction. Each functional area should recognize which message factors are most related to high satisfaction with received information, and emphasize these when sending such information. The authors also discovered the moderating effects of market and technical uncertainty that should provide guidance for marketing and R&D managers on how to allocate their efforts in information transfer based on the external environment. The empirical findings also revealed some cross-cultural differences, as well as a few similarities, between US and Japanese respondents     

Developing and Evaluating New ICT Innovation System: Case Study of Korea's Smart Media Industry

The smart media (SM) industry has demonstrated that it has the characteristics to increase user innovative activities, enhance open innovativeness, and increase the segmentation of innovation value. This study introduces and evaluates an innovation system that reflects the characteristics of the SM industry. We categorize the SM industry into hardware, network, platform, and content industries and perform an AHP analysis (based on a survey of 96 experts) to evaluate the relative importance of the factors/factor groups affecting the creation of innovation. The results show that “collaboration activity” is a more important factor than other innovation factor groups (financial support, R&D, policy environment, human resources) in the SM industry. The results also show that the important factors/factor groups differ by industry.     

Observations on the measurement of R&D productivity: a casestudy

Recent concerns over national and corporate competitiveness have stimulated a renewed interest in the measurement of R&D productivity. However, the complexity of measurement problems in R&D organizations has resulted in a situation where there is a scarcity of generally accepted techniques. The authors review the major measurement issues connected with R&D productivity and presents the results of a case study to develop a R&D productivity measurement system. They describe the process of designing such a system for a high-tech product-development organization, and also provide a reduced list of ten R*D productivity indicators for ongoing monitoring purposes     

R&D/marketing communication during the fuzzy front-end

The planning stage of an innovation project has a great effect on the commercial performance of the project. During the “fuzzy front-end”, the organization formulates a concept of the product to be developed, and determines whether or not the organization will invest resources in the concrete development of the idea. The integration of R&D and marketing activities is a necessary condition for success in innovation projects. The research question of this study is: from an information processing perspective, what role does information transfer play in integrating R&D and marketing functions during the planning stage, and what effects do project formalization and project centralization of R&D and marketing planning activities have on the efficiency of marketing and technological uncertainty reduction? The authors use an ex post facto research design to test the propositional model. The findings show that successful project teams are characterized by a maximum uncertainty reduction during planning, i.e., by a maximum decrease of R&D and marketing task variability, and a maximum increase of R&D and marketing task analyzability. Information flows between these functions help them to achieve this efficient uncertainty reduction. While project centralization has a negative effect on efficient uncertainty reduction, project formalization is curvilinearly related to the amount of uncertainty reduced during planning     

Study of Methods for Element Data Service for Electronic Documents Related to National R&D Projects

Major countries are supporting new knowledge creation and innovative activities by opening data so that the research results carried out by government budgets can serve as public goods. The Republic of Korea has also made research and development (R&D) reports and papers available in electronic file format, which is the result of national R&D programs for the general public. However, the extraction of meaningful information among unstructured data in text format has not satisfied researchers’ expectations. In order to evolve into a customized service reflecting the opinions of researchers, we investigated the demand for necessary contents and services at the planning stage of R&D projects. This study attempts to propose a method to offer significant information which shows a bigger unit than objects based on trend information with extraction and processing demands focusing on R&D reports based on the results of questionnaire survey and interviews with researchers. This study aims to provide the integration service, tentatively named ‘element data service’, of key sentences and table/figure images with a high demand for the utilization of researchers. The main procedure of the proposed method consists of the subject classification of the R&D report, the extraction of table/figure image, and the extraction of main sentence. We used public reports of the same classification published from 2012 to 2016 for the experiment and utilized the extractive summarization method for the copyright protection of report original text. After realizing the simple prototype, we examined the service possibility through the researcher target reviews.     

Marketing, R&D, and Startup Valuation

The problem focus is on startup decisions associated with staged venture financing, where both R&D and marketing are significant percentages of overall expenses. When should a startup owner acquire working capital, and how should she/he distribute that capital between R&D (to improve product quality) and marketing (to increase sales) to ultimately grow valuation? Also, should the startup owner cap the total R&D and marketing budgets to increase profitability during staged venture financing? We develop a model to study resource acquisition and allocation decisions across successive stages of startup growth. The model incorporates a funding process whereby the startup valuation is positively impacted by improved product quality and market growth. This model provides insights on optimal acquisition and allocation practices and characterizes the impact of changes in productivity, along with the evolution rate of R&D and marketing payoffs, on the underlying decisions. Our results also illustrate conditions for optimal capping of R&D and marketing expenses as a percentage of revenues.     

Harnessing university research for competitiveness, industrysupport

The effects of changes in the industrial R&D climate on research performed at universities in both the East and West are examined. The approaches to using university research for industrial problems taken by SRC, a nonprofit industry consortium based in Research Triangle Park, NC, by the National Science Foundation, and by other university-industry collaborations are described. In Europe, Great Britain has taken the lead in making its institutions of higher education more market-driven by requiring them to compete for contracts from industry as well as from the public sector. Its universities (and their European counterparts) also have become more conscious of the value of their intellectual property. In Japan, where industrial researchers have dominated and academic R&D has not enjoyed much esteem, support continues for fields of basic research where the Japanese have established themselves, such as controlled nuclear fusion and high-energy physics. Universities also receive considerable funding from the Ministry of Education, Science, and Culture, and sometimes additional funding is available at the prefectural level     

Recent progress in modeling R&D project-selection processes

The authors review the progress that has been made in the development of quantitative models of R&D project-selection processes. Future research needs in the area are assessed. R&D project-selection has traditionally been modeled in the management science literature as a constrained optimization problem. The deficiencies of this approach have been described, and the need for new approaches has been recognized. In particular, the optimization approach ignores the organizational context in which decisions are made. A new stream of research in R&D project-selection models emerged in the 1970s in response to this need. The philosophy underlying the new approach differs significantly from traditional optimization models. The new approach seeks insight rather than outcomes and focuses on the decision process     

Blue lasers continue to set the pace in optoelectronics

Recent indicators as to the status the III-nitrides and related compound semiconductors — not the least being our own GaN market report — reaffirm the signs of continuing innovation and development in new devices and thus new markets. To this must be added the evolution of existing ones such as the blue LED. However, the blue laser diode constitutes the leading edge of advanced optoelectronics research and no better is this exemplified than by Nichia labs. Collectively, this R&D thrust is serving to bring closer the second renaissance in a very important sector of our industry.     

Improving the R&D-production interface in industrial companies

Today, technological innovation is considered an essential component of corporate success. However, investment in R&D will result in innovative products only if research findings are transferred to production. This paper presents the results of a study on the barriers to and facilitators of this transfer process. Data were collected from 60 R&D division managers and 58 production managers from 61 companies in Brazil. Size of the R&D unit and the nature of the technology were considered in the analysis. Recommendations to improve the links between R&D and production are presented