TRANSFORMING A COMMUNITY TOWARD A KNOWLEDGE SOCIETY THE WINDS OF CHANGE DR. KIP BECKER BOSTON UNIVERSITY

WHAT IS KNOWLEDGE BASED? WHAT DOES IT MEAN TO BE “SMART”WHAT DOES IT MEAN TO BE “SMART” –HOW TO GET THINGS DONE –WHERE THINGS ARE –SITUATION OPPORTUNITIES AND SOLUTIONS –CONSUMER ORIENTED – NEXT GENERATION “WANTS GOAL:A NATION OF “SMART” PEOPLE WITH “ATTITUDE” WHAT IT IS NOT:WHAT IT IS NOT: ABOUT THE TECHNOLOGY / INFORMATIONABOUT THE TECHNOLOGY / INFORMATION QUEST FOR MAGICAL A SOLUTION OR BEINGQUEST FOR MAGICAL A SOLUTION OR BEING A “WORLD CENTER” A “WORLD CENTER” SMART

RESOURCE RICH AFRICA INDONESIA OIL SURINAM BAXITE LEARNING TO MANAGE INFORMATION TO CREATE VALUE VALUE ADDED SOLUTIONS Columba - Seattle Washington India- Dominican Republic call centers

INTERNATIONAL COMPETITION NO FIRM OR GOVERNMENT NO MATTER HOW LARGE OR STRONG IS SAFE 1.“BIG STALE GUYS” NO LONGER RULE 2. MUST DRIVE OUT OLD ATTITUDES MARCU “C Komatsu 3. KNOWLEDGE AND “SMART” RULE OLD RULES ARE OUT

BUSINESS HAS REACHED END OF INCREMENTALISM CATCHING UP NOT THE SAME AS GETTING AHEAD Strategy NEEDS TO BE CREATED FOR THE FUTURE NOT FOR THE PRESENT FORWARD

THE WAY THE WORLD THINKS IS CHANGING MASS PRODUCTION Engineering Model MASS PRODUCTION Engineering Model Make it  Store Inventory To Sell From Early Information Importance LEAN JAPANESE MODEL Just In Time (JIT), TQM, 6 SIGMA Match Production & Inventory / Sales Then Came 70s Today’s Competition INFORMATION AGE MODEL INFORMATION AGE MODEL EMOTIONAL TECHNOLOGY AND CULTURAL INNOVATION Consumer Information  Produce BETTER, FASTER, CHEAPER then

Emotional Technology Production Cultural Innovation DESIGN STYLE PRODUCT DESIGN ADD - VALUE OBM ODM OEM Emotional Technology “Buy me because through incorporating technology I am better on some powerful but specific functional criteria such as lower price or lower weight” (as seen in the netbook’s list of features); iphone apps Cultural Innovation “Buy me because through better marketing awareness of customer needs I am able to make you feel special in some important non specific non functional way such as the elegance and lack of clutter associated with the Apple Computer brand, the beauty of the Asus netbook’s exterior finish or integrated ease of use, or the playfulness of some Asian cell phone packaging”. VALUE ORIENTATION PRODUCTION ORIENTATION

THOSE “NON KNOWLEDGE” ADVANTAGES CAN BE TRANSITORY HISTORY OR RUBBER Manaus Manaus MORANO GLASSMORANO GLASS PLANS FOR THE FACTORIES OF LOWEL STOLEN FROM ENGLAND POLAROID -KODAK FUJI

COMPETITIVE ADVANTAGES OLD ADVANTAGES Low cost labor/ Labor relationships Favorable debt financing Domestic subsidies Protected home markets Superior tax systems NEW ADVANTAGES NEW ADVANTAGES “Smart” Society Consumer aware Responsive Infrastructures Education Enthusiastic to Change and Quick to market Technology & Innovation Driven Competition based on “Knowledge” Advantages SUBJECT TO:  SHIFTS IN CONSUMER DEMAND  LACK OF PROTECTION OF TECHNOLOGY  REPLACEMENTS OF PRODUCTS BY TECH

FRONTAL STRAGEGY CAN BE SUCCESSFUL WHEN FIRM UNDERSTANDS WHAT CONSUMER WANTS? Caterpillar A : equipment, on a desert airport project or Arctic Circle oil would be fixed quickly A guarantee: equipment, on a desert airport project or Arctic Circle oil would be fixed quickly

11 COMPETITION FLANKING Attack the market where the competitor is weakest INFORMATION INTENSIVE 60S JAPANESE 60S JAPANESE CARS, COPIERS MOTORCYCLES 2000s KOREA Sidewinder SMART MEANS WINNING BY FLANKING

12 COMPETITION Offering new product making theirs unnecessary RESEARCH & CONSUMER INTENSIVE WATCHES SWISS to CITIZENS, SIEKO Japan TOTO POLAROID -KODAK FUJI SMART WINNING BY TECHNOLOGY BYPASS

THREE NATIONAL STORIES SHANGAI BRAHAIN DUBAI

“It is generally much easier to kill an organization than change it substantially.” -Kevin Kelly, Out of Control The problem is not really so much how to get new, innovative thoughts into your mind, but how to get old ones out “I THINK THERE IS A MARKET FOR MAYBE FIVE COMPUTERS” - THOMAS WATSON CHAIRMAN IBM 1943 THERE IS NO REASON ANYONE WOULD WANT A COMPUTER IN THEIR HOME” – KEN OLSON, PRESIDENT CHAIRMAN FOUNDER DIGITAL EQUIPMENT 1977 “I THINK THERE IS A MARKET FOR MAYBE FIVE COMPUTERS” - THOMAS WATSON CHAIRMAN IBM 1943 “THERE IS NO REASON ANYONE WOULD WANT A COMPUTER IN THEIR HOME” – KEN OLSON, PRESIDENT CHAIRMAN FOUNDER DIGITAL EQUIPMENT 1977

Knowing what the CUSTOMER wants not just what you want to make INNOVATION’S KEY IN GLOBAL STRATEGY

Technology, friend or foe? 11,000 SELLERS 3,500 FLOWER TYPES 5,000 BUYERS 120 AUCTION GROUPS THE DUTCH FLOWER GROWERS (DFA) AND THE TELE-FLOWER AUCTION (TFA) 1097 Pope Urban II outlawed crossbow

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Facebook 1 yr SPEED AND FLEXIBILITY DEMANDS

20 PRODUCTIVITY GOODS SERVICE PRODUCTIONSERVICES

WHAT DOES IT TAKE? NEVER HAS ENVIRONMENT BEEN MORE RECEPTIVE TO NEW IDEAS & MORE HOSTILE TO EXISTING FIRMS and NATIONS (KNOWLEDGE) COMPANIES MORE LIKELY TO BE AMBITION CONSTRAINED THAN RESOURCE CONSTRAINED

KEEPING UP WITH CHANGE Technology & Pace of Change SIU AND CHINESE BASEBALL SONY WALKMAN HAS HAD TO PRODUCE 160 MODELS SO SUSTAIN IDENTY AGAINST CLONES 1976 TEXAS INSTRUMENTS 90%MK SHARE LOW PRICED DIGITAL WATCHES ($19.95) 1983 LOW END IS $3.00 TI CAN NOT BE PROFITABLE In only 7 years TI went from MK leader to extinct

WHAT TO DEVELOP? – HOW MUCH CONTROL ARE YOU WILLING TO GIVE UP? WHAT / HOW TO ASSIMILATE? –WHAT CHANGES TO CULTURE ARE EXPECTED? –WHAT IMPEDIMENTS TO CHANGE? PART OF GAME OF DEVELOPING INTERNATIONALLY COMPETITIVE KNOWLEDGE BASED SOCIETY IS BEING INTERNATIONAL

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