Definitions related to Research and Development (R&D)

Course Topics What is meant by R&D? What is meant by other related terms? What are different types of R&D activities? 2

Defining a Word Different definitons, depending upon the context in which the word is used Etymology - the branch of linguistics that studies the origin and history of words 3

Technology Classic Greek – techne (techne) = art or craft – logos (logos) = knowledge Definitions derived from the etymological origin – technology means the knowledge of art or craft – technology means the knowledge of art which can be applied to increasing the efficiency of any art 4

Technology ”systematic knowledge and the action of industrial processes that are applicable to any recurrent activity. Thus, technology is closely related to science and engineering.” Concise Encyclopedia of Science and Technology, Second Edition, Parker, S P, editor, New York, New York, USA, McGraw-Hill Publishing Company 5

Technology ”a method for handling a specific technical problem, or, more broadly, a system by which society provides its members with things that are needed or desired.” Webster's New World Dictionary of American English, Third college edition. Neufeldt, V, editor, New York, New York, USA, Prentice-Hall 6

Technology “the theoretical and practical knowledge, skills, and artifacts that can be used to develop products and services as well as their production and delivery systems.” 7

Artifact “something created by humans usually for a practical purpose; especially: an object remaining from a particular period ” Merrian-Webster's On-line Dictionary 8

Technology 1.a) the practical application of knowledge especially in a particular area : ENGINEERING 2 ENGINEERING b) a capability given by the practical application of knowledge 2.a manner of accomplishing a task especially using technical processes, methods, or knowledge technical 3.the specialized aspects of a particular field of endeavor Merrian-Webster's On-line Dictionary 9

Technology ”the knowledge or science of how to develop, produce, and exploit technical systems, processes, methods, products, and services.” Lumme, A, Kauranen, I, Autio, E & Kaila, M M. (1992) New technology- based companies in the United Kingdom and in Finland. A comparative study, Helsinki, Finland, SITRA 10

Technology ”In simple terms, technology is the way we do things.” Khalil, T. (2000) 11

R&D: Research + Development 12 “creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications.” OECD (1994)

Main Sources of R&D Universities - Research domain Industrial firms - Development and engineering domain Public Sector, - Research, develop- government ment, and engineer- research institutes ing domain (GRIs) 13

Academic Research The orderly approach to the revelation of new knowledge about the universe The objective is to advance new knowledge and understanding Boundaries of the search of new knowledge are limitless Roussel, P.A. & Saad, K. N. & Erickson, T. J. (1991) 14

Industrial Research The orderly approach to the revelation of new knowledge Research goal is knowledge applicable to the company’s business needs Enabling the company to participate in the forefront of new technology or lay the scientific foundation for the development of new products or processes Roussel, P.A. & Saad, K. N. & Erickson, T. J. (1991) 15

Basic Research Generating new knowledge and options Creating and understanding theory Tracking and absorbing external knowledge Outputs: research papers, reports, patents 16

Basic Research “experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomena and observable facts, without any particular application or use in view.” 17

Applied Research Generating new knowledge with a practical aim Tracking and absorbing external knowledge Outputs: research papers, reports, patents 18

Applied Research “original investigation undertaken in order to acquire new knowledge, but directed primarily towards a specific practical aim or objective.” 19

Development Design engineering: developing new products or processes with a primary emphasis on functional utility Translating known and demonstrated principles into new products and models Outputs: designs, prototypes 20

Advanced Engineering Demonstrating technical viability Eliminating technical uncertainty Choosing actual technologies and materials Outputs: demonstrations, know-how 21

Development and Experimentation “systematic work, drawing on existing knowledge gained from research and or practical experience, that is directed to producing new materials, products or devices, to installing new processes, systems and services, or to improving substantially those already produced or installed.” 22

Industrial R&D “any systematic or intensive study undertaken in the field of science and technology with the object of using the results of the study for the production or improvement of materials, devices, products, or processes.” MITI Malaysia (1996) 23

Not Included in Industrial R&D Quality control of products or routine testing of materials, devices, products, or processes Research in the social sciences or the humanities (studying human culture) Routine data collections Efficiency surveys and management studies Market research and sales promotion MITI Malaysia (1996) 24

Types of Industrial R&D Incremental R&D – Small “r” and large “D” Radical R&D – Large “R” and often large “D” Fundamental R&D – Large “R” and no “D” 25

Types of Industrial R&D RadicalIncremental Fundamental rR d D Research Development 26

Incremental R&D (r&D) Small advances in technology Based on an established foundation of scientific and engineering knowledge Small incremental improvements in the aggregate can yield large strategic results 27

Examples of Incremental R&D Objective: Reducing manufacturing costs Energy conservation Computer-guided process control Better metallurgy for lower maintenance costs 28

Radical R&D (R&D) Involved with the discovery of new know- ledge that can be applied to a known useful purpose Using a foundation of existing scientific and engineering knowledge that is insufficient alone to arrive at the desired practical result Intended to change the basis of competition in an industry 29

Fundamental R&D (R&d) 1 Developing a depth of research competence in fields of potential future technologies of great strategic importance to the company in the long term Preparing for the future commercial exploitation of these fields 30

Fundamental R&D 2 Decisions of strategy, vision, and guts – costs now, rewards uncertain and in the far future – will the rewards be during the current managements tenure? Role of universities, government research institutes (GRIs), and non-profit organizations is important 31

Characteristics of the Three Types of R&D 32 Incremental (r&D) Normally, the clever exploitation of existing scientific and engineering knowledge in new ways; characterized by low risk and modest reward Radical (R&D) Fundamental (R&d) The creation of knowledge new to the company - and possibly new to the world - for a specific business objective; characterized by higher risk and high reward The creation of knowledge new to the company - and probably new to the world - to broaden and deepen the company’s understanding of a scientific or engineering arena; characterized by high risk and uncertain applicability to business needs

Characteristics of the Three Types of R&D 33 Types of R&D Time to Completion Competitive Potential Durability of Competitive Advantage Gained Incremental (r&D) Radical (R&D) Fundamental (R&d) Short (0.5-2 yrs) Mid-term (2-7 yrs) Long-term (4-10 yrs) Modest Large Short, typically imitable by competitors Long, often protectable by patents Long, often protectable by patents

The Linear Model of R&D Basic Research Applied Research Development 34 - Engineering prototyping - Pilot production - Full-scale production

Technological Innovation Creation of a product, service, or process that is new to the organization Not necessarily new to the world Introduction into the marketplace either by utilization or by commercialization 35

Technological Innovation “the initiation of the technical idea, the acquisition of the necessary knowledge, its transformation into usable hardware or procedure and its introduction into society, and its diffusion and adoption to the point where its impact is significant.” Bright, J. R. (1969) 36

Innovation “the application of better solutions that meet new requirements, unarticulated needs, or existing market needs. This is accomplished through more effective products processes services, technologies, or ideas that are readily available to markets, governments and society. The term innovation can be defined as something original and, as consequence, new that "breaks into" the market or society.” Wikipedia. The Free Encyclopedia (2014) 37

Innovation "something original, new, and important—in whatever field—that breaks in to (or obtains a foothold in) a market or society.“ Frankelius, P. (2009), Questioning two myths in innovation literature, Journal of High Technology Management Research, Volume 20, Number 1, pages 40–51. 38

Technological Invention 39

Technological Invention Creation of a new concept or a novel technology New to the world Most inventions have followed scientific discoveries Can be a product, process, or system 40

Invention: Dictionary Definition “a new device, method, or process developed from study and experimentation. (the phonograph, an invention attributed to Thomas Edison).” American Heritage Dictionary of English Language 41

Invention “a new, useful process, machine, improvement, etc., that did not exist previously and that is recognized as the product of some unique intuition or genius, as distinguished from ordinary mechanical skill or craftsmanship.” U.S. Patent Law 42

Innovation versus Invention Innovation is a process; invention is an event Inventions are not common. They can precede a number of innovations The bottom line of innovation is the market - only few inventions reach the marketplace and even fewer are able to become successful in the marketplace 43

Innovation versus Invention “Innovation differs from invention in that innovation refers to the use of a better and, as a result, novel idea or method, whereas invention refers more directly to the creation of the idea or method itself.“ Wikipedia. The Free Encyclopedia (2014) 44

Thank you! Acknowledgements Important source: Roussel, P. A. & Saad, K. N. & Erickson, T. J. (1991) Third Generation R&D: Managing the Link to Corporate Strategy, Boston, Massachusetts, USA, Harvard Business School Press, 192 pages. 45