Strelecky how foresight_can_be_beneficial_249

2008/9 Technology Foresight Training Programme
Module 4: Technology Foresight for Corporations
27 – 30 October 2009, Bratislava, Slovakia

Introduction to foresight and innovation
management in companies - how foresight can be
beneficial

UNIDO 1


New trends in the world economy

Globalisation and changes in company structure
Large companies have new possibilities, new markets more
freedom to do the business
Liberalisation is leading to the more intensive flow of capital and
large corporations make use of new conditions
Large corporations are creating regional and local networks of co-
operating companies, mainly small and medium sized ones
Networks are created by suppliers, who are providing to large
corporations flexibility in the accomodation to the regional demand
Large multinational corporations are bringing into the relation with
SME´s new quality standards, creating new presure to decrease
costs and high expactations concerning product and service
improvements

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For small and medium sized companies it means higher pressure to
fulfil expactations of large companies (MNC) and the driving force
for them is to penetrate to networks with new innovative products
and services, which could be achieved by technology innovation,
management innovation
Advantage for these companies is the enlargement of markets
using the distrubution channels of MNCs
Interesting paradox: in EU 15, SME´s bring more innovation to
business as MNCs, in EU 10 are MNCs the main suppliers of new
innovative ideas and products
The main reason:
– Missing innovation culture
– Not existing efficient NIS (national innovation system)

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Difference between innovation content:
– In EU 15 is a higher portion of :
• In-house innovation (30% EU average, Slovakia 10%)
– Innovation based on outputs from direct R&D (EU – 3%,
Slovakia –less as 1%)
• 5% of innovations were based on information sources from
universities and R&D institutions, patents were sources for
3% of innovations in production companies, and 1% in
service companies.
– In EU 10 is innovation based on horisontal technology trasfer,
less vertical

UNIDO 4


Technology transfer schemes
Horisontal transfer

Basic
Vertical transfer application application application application

4.Development

3.Applied
research

2.Strategic
research

1.Basic
research

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Push – pull effect

Push – pull effect
In the most developed countries the prevailing direction is „pull
effect“ based on the real market demand
In the less developed countries there is no market demand and
R&D institutions outputs are not needed,
The pull market effect is replaced by institutional state/public
pressure on R&D institutions (universities, academies of sciences)
to place inventions into businesses

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Innovation performance in EU Európsky inovačný scoreboard 2008

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Message 1

Level of innovation in small and medium
sized companies is low and not appropriate
to the needs of their competitivness.

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Missing transfer from R&D

The main reason of this incongruity is based on:
– cultural attitude inherited from the period of centrally planned
economy when „ R&D activities were not worse any interest“
– Other reason is the orientation of R&D institutions, where the
content of research is missing the need of companies based on
the demand of market.
The research topics are selected very often on the previous
conservative abilities of R&D institutions and not on the basis of
future needs of companies. Foresight is missing.
Enterprises, especially micro and small, are solving more existing
and existence problems and they lack future orientation.Future
view.

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Message 2

Foresight is missing for the better definition
of R&D activities and for the more efficient
and intensive flow of outputs to companies

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Innovation

Innovation is ever more important in today’s
increasingly global, increasingly knowledge-based
economy. Competitiveness depends, to a far larger
extent today than in the past, on the ability of
manufacturing and service sectors to meet fast-
changing market needs quickly and efficiently
through the application of new technology.
(B U I L D I N G A N I N N O V A T I V E E C O N O M Y I N E U R O P E)

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Innovation

Innovation is pervasive and diverse. It does –
and should – take place in firms of all size, in
every region and in every sector, not just in
‘naturally innovative’ high-tech sectors such as
biotechnology and information technology.

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Innovation

Innovation is unevenly distributed.
The innovation performance of Member States,
and of different regions within individual Member
States, varies very widely.

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Innovation

Innovative products (recently introduced or
improved) account for fully one-third of all
European manufacturing sales – but this means
that the great majority of Europe’s industrial
turnover derives from products which have
remained unchanged for at least three years.

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Message 3

Innovation of products and services is slow

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SMEs

„Mass production“ production is being replaced by
„fllexibility economy“, where life cycles of products
and services are continually decreasing and more
small and medium sized companies are involved in
the process and they are providing to the whole
economy requested flexibility.
The number of small companies has been growing
and it exceeds 99% of all companies as a
consequence of these trends.

UNIDO 16


SME´s

The European average of number of company´s employees is 7.
It means that the European economy – employment, growth
and stability depends on small companies.
The number of small companies which become extinct is high,
the employment changes are also high, but the adaption to
the economic deviations (market instability, credit crunch,..)
is quicker, less complicated and more efficient as it is at
MNCs.

UNIDO 17


SME´s and business planning

SME´s are behaving in a different way. The bigger company, the
higher sophistication of management.
More rules, more standards, more defined relations. Division of
tasks and responsibilities is clearly defined.
Only 5% of „micro“ companies have a business plan.
Less than 20% small companies (50 employees or less ) work with
business plan.Majority of them have plans for short-term (1
year), very small portion describes medium-term objectives
and long-term planning occurs very rarely.
In UK only 10% of companies (medium sized and large)are
using foresight exercises for future planning.

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SME´s and large companies

Management
sophistication
Bureucracy

Small large company

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Message 4

Small companies concentrate their management effort more
to the operative issues and less to the future.

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How to continue

Role of advisors, consultants and stakeholders is
to convince companies to focus more to:
- Innovation
- Foresight.

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Why?

Why to innovate, why to do a foresight exercise?
Two case studies:
Regional development – why innovation and
foresight
Mr.Bielik – succesful plagiarist?

UNIDO 22


Definition of corporate foresight (Jemala,2009)

Corporate foresight is an action-oriented systematic process
that should integrate all types of foresight (research,
technology, competitive, consumers´ foresight) at the
corporate level. This process is not only about the study of
the past or current plans and future predictions within a
company. These are only related processes that can help to
integrate strategic business processes through consecutive
systematic actions in different areas. But these systematic
efforts must create anticipative intelligence and
functional networks that will enable a company to benefit
from the future.

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Possibilities for SME´s

There are no unified procedures of foresight and the mix of used
techniques differ in relation to:
- objectives of the foresight exercise,
- stakeholders,
- participants,
- sectors and
- financial coverage.

Due to the complexity foresight studies require substantial source
of financial means, which can not be covered by SME´s themselves.
Solution: - governmental studies, activities of industrial
associations, chambers of commerce – technology platforms

The foresight is a rather complex approach and for SME´s it is
difficult to participate – missing qualified human sources.

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Foresight techniques

SWOT, Benchmarking, Data analysis,
Bibliometrical analysis, Process analysis,
Environmental scanning, Cross-impact analyses,
...... Analysis and scanning... Workshops,
Expert panels... Understanding..., Brainstorming,
Brainwriting, Delphi, Key technologies, Modelling,
Wild card, Surveys,..... Anticipation...,
Roadmapping, Scenarios, Simulations,
Backcasting....Planning

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Decrease of price, create conditions for the participation

For the utilisation of foresight techniques by SME´s is important :
- to simplify the whole process of foresight
- to provide companies a transparent user friedly manual.
- networking - some companies are networking, creating
partnerships to enable execution of a foresight study
- to educate, train management of companies (selection of
appropriate techniques is the key task of foresight exercise)
- governmental programs have to encourage SME´s in the
participation in national foresight activities (and to get
response from wider circle of businesses).

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What is foresight?

The role of foresight is to create a vision of future, a
participative picture of possible scenarios, which could be
influenced by actions of today.

Foresight has social features and is not only a mathematical
solution.

What differs foresight from other forecasting methods?
It is a structured anticipatory dialog ....

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Outputs of foresight exercises:

Political recommendations (user are national and regional authorities)
Identification of trends (national authorities, corporations)
Scenarios (national authorities,regional authorities, corporations )
R&D priorities (national authorities, corporations)
Key technologies (professional associations, corporations)
Prognosis (national authorities,regional authorities, corporations)
Roadmapps (national authorities,regional authorities, corporations).

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Why to participate in foresight (1)

Corporations, MNC´s:

To anticipate trends in sectors, industry, society (even they are not trends
yet)
To accomodate business goals to the real possibilities of corporation
To be prepared for the changes in market, to increase imunity of company
against market failures
To prepare proper strategy for companies
To identify need of new processes, technologies (technology foresight),
products (production companies are very sensitive to new developments)
To find wider social relations in doing business
To identify the proper field for R&D
To avoid or to decrease the future possible risk, avoid critical situation

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Why to participate in foresight (2)
Corporations, MNC´s:

To improve the decision making process of corporations
To create conditions for better and easier selection and set up of
company priorities, objectives, strategies and investments
Many corporations are aware that the technological and R&D push
must meet environmental, social and market pull. This „equiation“
works only in a long-term platform
Foresight is participative and corporations get back a feed back
from a bigger sample. Debates, brainstorming sessions provide
many useful outputs
Foresight has a multidimensional feature and it detects cross
impacts of more variables, so it gives more comprehensive and
possible picture about future
Examples: IBM, Nestlé, Simens, NASA, Motorola (R.Galvin – Six
Sigma, roadmapping, In the early 1990s, U.S. semiconductor competitors decided to work
together to solve some of the more basic, confounding, but precompetitive, technical barriers whose
impact was a concern to our companies over a 15-year time horizon.)

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Why to participate in foresight

Small and medium sized companies:

To anticipate trends in sectors, industry, society
To analyze the development of key technologies
To be prepared for the changes in market
To prepare proper strategy for companies
To identify need of new technologies, processes, products
To find wider social relations in doing business
To avoid or to decrease the future possible risk
To overcome the influx of information about future development
To create conditions for better and easier selection and set up of company priorities,
objectives, strategies and investments
Due to the participative feature of foresight, SME gets a broader view on future
(convince them, that they need future perspective not only, data of tommorrow)

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Case study

Establishment of a business centre in 1996.
- 1995: long term lease of a building in ruins for 30 years
- 1995: start of creation of a future picture of utilisation of the building 2005,
2015, 2025 – several scenarios of future services
- 1995: brainstorming sessions – involvement stakeholders, architects
- 1995: selection of scenario
- 1995: start of reconstruction
- 1996: marketing plans development and roadmapping
- 1996: first clients
- 1998: first survey focused to
- 1998: second stage of foresight exercise
- 1999: second building lease

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Case study

- 2001: start of reconstruction and first clients
- 2003: third foresight exercise, new services (training room, pub)
- 2005 - 8: new facilities
- 2009: third foresight exercise – new conditions - how to handle with crisis

UNIDO 33


Ján Strelecký
BIC Group, s.r.o.

Zochova 5
811 03 Bratislava 1

strelecky@bicba.sk

UNIDO 34

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