Competitiveness Conference


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  • Competitiveness Conference

    1. 1. the dti /UNIDO Competitiveness Conference <ul><li>The productivity triad approach and the role of institutions in competitiveness </li></ul><ul><li>Professor Michael Best, Centre for Industrial Competitiveness, University of Massachusetts </li></ul><ul><li>7 June, 2004 </li></ul>
    2. 2. Figure 1.1. Capability Triad Business Model Production System Skill Formation M. Best, NCA
    3. 3. Figure 2.1. Evolution of Industrial Structure PS 5 Knowledge intensive (systems integration) information, communication, instruments PS 1 low technology, labour intensive (interchangeability) apparel, toys, furniture PS 3,4 complex-assembly intensive (flow) auto, consumer electronics PS 2 material-intensive (flow) steel, plastic food processing (Principle of production) present future
    4. 4. Figure 3. Evolution of Japanese Industrial Structure Knowledge-intensive industries (computers, instruments, heavy machinery) 100% 100% Unskilled-labour-intensive industries 100% Medium capital and labour-intensive industries (light machinery, motor cars) 100% Medium capital and raw-material intensive industries (Steel, plastics, fibres) Source: Japan Economic Survey, Economic Planning Agency, 1974-5: cited in Magaziner and Hout, 1980 p.7 Best The New Competition p170 Japan (1959) Japan (1974) Japan (1985) West Germany (1974) M. Best, NCA
    5. 5. Table 2. Five Models of Technology Management Case Armory Ford Toyota Canon Intel Production Principle Inter- changability Flow Flow Flow Systems Integration Application Specialization Single Product Multiple Products New product development Technology integration Generic Capabilities Product engineering Synchronization Kaizen Product development Design rules TM1 TM2 TM3 TM4 TM5 Performance Breakthrough Standardization Cost Cost, Quality Time Cycle time Innovation
    6. 6. Table 3. Technology Management & Business Organization Business Model Traditional enterprise Big Business Kaisha Kaisha Multi- enterprise Industrial Organization Open system Market / vertical integration Networks - closed Networks - closed Networks: open Model of Innovation Specialist machine R&D labs Kaisen Evolutionary Disruptive TM1 Armory TM2 Ford TM3 Toyota TM4 Canon TM5 Intel Generic Production Capability Machine tool integration Throughput efficiency Continuous improvement Mechatronics Open systems: 5Ds M. Best, NCA
    7. 7. Table 2. Production Capabilities Spectrum -part one M. Best, NCA Pre-flow, pre-interchangeability: Craft production, by itself, offers no basis for flow. Each drawer is custom fit. The task is to develop product-engineering skills. Jamaica and Honduras. Interchangeability ( PS 1 ): product engineering without process engineering, hence low inventory turns and working capital productivity. Cyprus and Slovenia in the 1980’s. Single product flow ( PS 2 ): plants with economies of speed for a single product or range of products with dedicated lines. Workers are not multi-skilled and attend to a single machine. Training does not include continuous improvement, rapid changeover, or blueprint reading skills. Multi-national corporation (MNC) electronics production in Indonesia. Single product flow with continuous improvement ( PS 3 ): involves problem solving work self-directed work teams. Common training programs include Plan-Do-Check-Act diffused by the Japanese Union of Scientists and Engineers, the 7 problem-solving tools of TQM (total quality management) at shop floor level. Single product flow with process innovation ( PS 3 ): personnel include maintenance and process control technicians with skills to identify, fix and redesign machinery and production lines. Bottleneck analysis determines priorities. This may involve reconfiguring product design parameters at main office as required by DFM (design for manufacturability). Singapore in the mid-1980s, Malaysia MNCs in early 1990s. 1. 2. 3. 4. 5.
    8. 8. Table 2. Production Capabilities Spectrum -part two M. Best, NCA Multi-product flow ( PS 3 ): the Toyota system. Kanban, JIT (just in time), and SMED (single minute exchange of dies) are introduced in large plants. High throughput and flexibility are combined. Cellular production with self-directed work teams. Multi-product flow and product development (PS 4): Japan and Taiwan both excel at concurrent engineering and design for manufacturability. Skills include reverse engineering, prototype development, and pilot runs. New product design and technology fusion (PS 4): Japan’s Toshiba and Canon are leaders in linking development to operations at the plant level and linking research in generic technologies to product development. Core technologies are developed, often via fusion in generic technology labs. Technology management involves world-wide sourcing of the existing technology base in pursuit of novel applications. Systems integration and disruptive innovation (PS 5): 3 M, HP and Motorola use cross-disciplinary teams to identify new technology drivers for product development. Disruptive or breakthrough innovations are pursued but within an organizational context of process integration and HPWSs (high performance work systems). Hardware and software integration drives product concept development. Open systems and design modularization (PS 5): standard inter-face rules and diffusion of design capability support focus and network strategies. Fosters technology deepening R&D and techno-diversification 6. 7. 8. 9. 10.
    9. 9. Table 3. Technology Management and Production Capabilities Spectrum 1. Pre-flow, pre-interchangeability TM1 2. Interchangeability TM2 3. Single product flow TM3 4. Single product flow with continuous improvement 5. Single product flow with process innovation 6. Multi-product flow TM4 7. Multi-product flow and product development 8. New product design and technology fusion TM5 9. Systems integration and disruptive innovation 10. Open systems and design modularization M. Best, NCA
    10. 10. New Product Development Process <ul><li>Product concept </li></ul><ul><ul><li>conceptual design </li></ul></ul><ul><ul><li>product architecture </li></ul></ul><ul><ul><li>technology search and analysis </li></ul></ul><ul><ul><li>target market </li></ul></ul><ul><li>Product planning </li></ul><ul><ul><li>model building </li></ul></ul><ul><ul><li>structural testing </li></ul></ul><ul><ul><li>technology design viability testing </li></ul></ul><ul><ul><li>technology R&D and integration </li></ul></ul><ul><ul><li>investment/financial projections </li></ul></ul><ul><li>Product/process engineering </li></ul><ul><ul><li>detailed design of product </li></ul></ul><ul><ul><li>tooling/equipment design and specification </li></ul></ul><ul><ul><li>building/testing prototypes </li></ul></ul><ul><ul><li>master technology and engineering interfaces </li></ul></ul><ul><ul><li>setting standards </li></ul></ul><ul><ul><li>supplier tie-ins </li></ul></ul><ul><li>Pilot project/scale-up </li></ul><ul><ul><li>initial production runs </li></ul></ul><ul><ul><li>establish work skills and activities </li></ul></ul><ul><ul><li>volume production tests </li></ul></ul><ul><li>Production </li></ul><ul><ul><li>factory start-up </li></ul></ul><ul><ul><li>volume ramp-up </li></ul></ul><ul><ul><li>establish performance standards (cost, quality, time) </li></ul></ul><ul><ul><li>maintain standards </li></ul></ul><ul><ul><li>master engineering and work team interfaces for continuous improvement </li></ul></ul>Source: New Competitive Advantage
    11. 11. Figure 5. TM4 : Fast-Cycle Development and Technology - Pull Source: Adapted from Terao Yamanouchi. A New Study of Technology Management, Asian Productivity Center, 1995 Generational technology improvement Time Fast-cycle competitor Slow-cycle competitor 1 2 3 4 2 3 4 5 6
    12. 12. Figure 1. Competing Business Models The Old Vertical Computer Industry - Circa 1980 The New Horizontal Computer Industry - Circa 1995 Source: Adaptation from Only the Paranoid Survive by Andrew Grove, 1996. Used by permission of Doubleday, a division of Random House, Inc. Sales and distribution Application software Operating systems Computer Chips Sperry Univac Wang Retail Stores Superstores Dealers Mail Order Word Word Perfect Lotus DOS and Windows OS/2 Mac UNIX Compaq Dell IBM Etc Packard Bell HP Intel Architecture Motorola RISC Sales and distribution Application software Operating systems Computer Chips Disk drives Printers IBM DEC I-net SAP Linux Seagate Quantum Western Digital Maxtor Selectron SCI Flextronics Jabil Celestica HP Epson CMs M. Best, NCA
    13. 13. Figure 3.1 Model of Cluster Dynamics Industrial District specialization and speciation dynamics New Firms technological diversification Inter-firm Networks open-systems dynamics Entrepreneurial Firms internal dynamics M. Best, NCA
    14. 14. Source: Steven Syre,Charles Stein, Boston Globe 10/14/1999 Family tree: data communication equipment
    15. 15. Figure 5.4. Electrical Engineering Graduates in Massachusetts Source : New England Board of Higher Education M. Best, NCA
    16. 16. Figure 4. Republic of Ireland Engineering Graduates Source: National Council for Educational Awards, Republic of Ireland M. Best, NCA
    17. 17. Figure 5. Growth in Engineering and Science Graduates 1975-1995 M. Best, NCA Ireland Singapore S. Korea Taiwan 706 702 10266 6700 NA NA 0 1200 5456 2965 47277 15170 NA NA 12351 2818 M&CS NS&E NS&E M&CS 1975 1995
    18. 18. Source: Mission Critical: Closing the Achievement Gap Conf . , Joint Venture: Silicon Valley Network Changing Economy Makes Education More Important
    19. 19. Design capabilities and skills integration Source: Penang Design Center
    20. 20. Knowledge Workers in Massachusetts Compared With the United States Source: R. Forrant, P. Moss and C. Tilly, Knowledge Sector Powerhouse, UML 2001. ** Statistically significant at the 5% level.
    21. 21. Regional Growth and Skill Formation Dynamics
    22. 22. Figure 2. Two Models of Innovation 1. Science Push Innovation: U.S. Big Business BR DR AR Product Knowledge Domain: Science Technology Design Engineering Engineering Detail } BR = Basic Research; AR = Applied Research; DR = Dev. Research Source: Adapted from David Methé; Engineered in Japan . Oxford University Press 1995 PC = Product Concept; TR = Technological Research (New Technological Knowledge) 2. Incremental Innovation: Japan DR AR TR Product Development PC 1 PC 2 PC 3 Technology Applied Technology: Generic + Proprietary M. Best, NCA
    23. 23. Figure 4.3. Systems Integration Innovation Product Development Technology New Technology SI = Systems Integration Enabled by information technology Hardware + software Discipline integration PC 1 SI TR 1 PC 2 PC 3 PC 4 TR 2 BR Science M. Best, NCA
    24. 24. Biodegradable Polymer Research Center* University of Massachusetts Lowell Companies Cargill 3M Monsanto Eastman Chemical Convatee Morflex Dow BASF BF Goodrich National Starch EPA US Army Natick Gov’t Agencies & Labs Regional Companies New Materials Polymer Biodegradation Center* Scientific & Technical Expertise Synthesis (chemistry) Biodegradability Testing (biology) Microscopy Instrumentation (physics) Processing & Blending Techniques (plastics eng) NSF Scientific Literature Patent Search Global Competitor Analysis Research Projects Processing & Blending Environmental Testing Graduate Students Japanese Companies Mitsubishi Taizel Mitsui Topan Ajinomoto Damippon Kirin Nippongos Shimatsu Unitika Japanese Companies Tsukuba MITI * A National Science Foundation Industry / University Cooperative Research Center since 1993
    25. 25. Atomic Figure 5.2. The Law of Diminishing Sizes Critical Size Dimension (Meters) M. Best, NCA Technological Periods Mechanical Electrical Megahertz to Terahertz/sec (Measure of flow) Electronic Armory 1817 Robbins & Lawrence 1000 th ’s Vernier Caliper 1851 Micrometer 1867 Brown & Sharpe Central Power Station 1890 Edison/ Ford Moore’s Law Photonics 10 -12 bits/sec Genome 1/10 atom D 1st Prerequisite to mass production 2nd Prerequisite to mass production Transition to nanotechnology + self-assembly Nanotechnology Photonics Biotech 1800 2000 1850 1860’s 1890 1950 10 -6 10 -4 10 -3 10 -12 10 -9 Nano
    26. 26. Policy Proposals Linked to the Capability Triad
    27. 27. Policy Proposals (PP’s) <ul><li>PP1 Concentrate on entrepreneurial firms. </li></ul><ul><li>PP2 Foster open networks. </li></ul><ul><li>PP3 Apply principle of system integration. </li></ul><ul><li>PP4 Diffuse high performance work organisations. </li></ul><ul><li>PP5 Develop and diffuse technology management capabilities. </li></ul><ul><li>PP6 Partner with inward investment to advance capabilities. </li></ul><ul><li>PP7 Integrate technology management and skill formation. </li></ul><ul><li>PP8 Integrate mission-driven diffusion agencies with industrial policy goals. </li></ul><ul><li>PP9 Link visible and invisible colleges. </li></ul><ul><li>PP10 Administer the research, technology development and innovation infrastructure. </li></ul>
    28. 28. High Growth Rate Processes <ul><li>1. Enterprise growth dynamics </li></ul><ul><ul><ul><ul><li>technology capabilities / market opportunities </li></ul></ul></ul></ul><ul><ul><ul><ul><li>design ideas / leadership (Grove’s dynamic dialectic) </li></ul></ul></ul></ul><ul><li>2. Regional growth dynamics </li></ul><ul><ul><ul><ul><li>enterprise </li></ul></ul></ul></ul><ul><ul><ul><ul><li>techno-diversification </li></ul></ul></ul></ul><ul><ul><ul><ul><li>open systems (internal / external dynamic) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>innovation </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>disruptive: internal / external dynamic </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>dip-down: fast-cycle product development </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>design diffusion: leveraging creativity </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>dispersed: laboratories for experimentation </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>diversity: new technological combinations </li></ul></ul></ul></ul></ul><ul><li>3. Transformational growth </li></ul><ul><ul><ul><ul><li>PS 1-5 and sectoral transition </li></ul></ul></ul></ul><ul><ul><ul><ul><li>capability triad </li></ul></ul></ul></ul>
    29. 29. ITRI Technology Output Source: Industrial Technology Research Institute, Taiwan * Including conferences, seminars, workshops, and technical training programs