TECHNOLOGY DEVELOPMENT AND MARKET CREATION
In the U.S., technology transfer has traditionally proceeded from academia and the military research environment to industry. That's changing. At a recent Defense Advanced Research Projects Agency (DARPA) workshop, industrial sector attendees were asked about technology transfer. They replied, "Sure, we're interested in technology transfer. What d'ya wanna know?"
There's plenty of talk going around about technology development, technology transfer and revitalizing commercial innovation. Too much of it is just talk. But the issue of corporate support of technology because it creates wealth in a way that investment in things like increased market share never does.
While technology development and transfer has been done well by some government and quasi-governmental agencies, the creation of market is almost exclusively the province of private venture capital in pursuit of new technology, and the creation of jobs is almost exclusively the province of companies with under 500 employees.
A recent story in The New York Times illustrates some of the U.S. Kingsbury Corp., a Keene, N.H.-based machine tool company, wanted to use a new type of diamond-coated tool it had obtained for testing from the National Center for Manufacturing Sciences, Ann Arbor, Mich. But no suppliers produce the new cutter in commercial quantities.
Why couldn't Kingsbury buy a better mousetrap? According to the article, niche technology often go begging for development dollars, and even those attracting investment tend to mature slowly. Why didn't tool companies rush to invest in making the new cutting tools? Reasons cited include questions about performance, cost and where it will fir into the supplier's product strategies. Supplier may fear better technology approaches are due to appear. Attaining full-scale production may be technologically or economically challenging. Finally, patent uncertainties and questions about the potential market inhibit investment.
Too much business focus in the U.S. bears on the short term and too many management decisions are made by the technologically illiterate. Technologists need management champions if their projects are to see the light of day.
To make it happen, the champion needs the following: a business plan; evidence of customer interface; good people; a significant barrier to entry by competition; 100 percent of zero market; and fun-filled adventure. The last may seem frivolous. It's not. Projects centered around boredom and drudgery seldom succeed.
To industry's credit, there've been some countervailing indicators. For example, there's been a recent trend for automobile companies to promote engineers in the senior management ranks. And their strategies for 2002 focus on systems: the automobile as product and manufacturing as process, together as a single system.
The statistics, however, can be discouraging. For example, I am associated with the Breakfast Club, a group of investment angels in southern New Hampshire. We figure that only about one in 25 technology initiatives ever becomes tremendously successful. an additional five might prove worth the money invested, but the rest are worthless. Venture capitalists find 20 percent success rate astounding.
In my experience, a realistic target for full payback of an investment is seven years, it's seldom apparent whether there's a real chance for success. Staying power and adequate funding during this period is very important. Unless you give good people enough time and money to do the job, you're backing failure.
What kind of organization best suites technology development? Development teams or "skunk works," like those Lockheed used developing the SR-71, are a corporate approach to technology development that works. Skunk works take approximately half the time do a project, and for one-fifth the cost. There is a caveat however. Generally, a skunk work yields souped-up race cars, not Chevrolets.
Industry must use skunk works, give technologists clout by promoting top management from engineering backgrounds, and budget research adequately. Technology generates markets and creates wealth. Everything else is just reallocation or redistribution of wealth. We must understand what that means and look to technologies 25 years in the future, and to what their market will be.
As appeared in Manufacturing Systems Magazine November 1992 Page 40
References - Table of Contents
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