Transcript DISRUPTIVE TECHNOLOGIES FIRMS’ STRATEGIES AND GOVERNMENT

The Six Countries’ Conference on Disruptive Technologies
DISRUPTIVE TECHNOLOGIES,
FIRMS’ STRATEGIES, AND GOVERNMENT POLICIES
Professor Y.L. Doz
The Timken Chaired Professor of Global Technology and Innovation
INSEAD, Fontainebleau, Singapore
VANCOUVER, CANADA, June 5th 2003
Professor Y. Doz
Three core questions
• What is a disruptive technology?
• What are its strategic implications, for incumbents?
For challengers?
• Why does it matter to governments?
Technology, Innovation, Discontinuity, Radical Innovation, Architectural
Innovation, Transilience, Competence enhancing, destroying……
Professor Y. Doz
What is a disruptive technology?
Performance
Third technology
Second technology
First technology
Time / Resources devoted
Source: Adapted from Foster (1986) and from Christensen (1992)
Professor Y. Doz
What is a disruptive technology?
Performance
(log. Scale)
First technology
Second technology
Third technology
Time
Source: Adapted from Christensen (1993)
Professor Y. Doz
A well researched example:
hard disk drives
Intersecting Trajectories of Capacity Demanded versus Capacity Supplied in Rigid Disk Drives
Source: Christensen, 1993
Professor Y. Doz
Disruptive, or not? Some key questions
1. Innovation or Technology?
. Social “technologies” (low cost airlines)
. Value innovations (regional jets)
2. Supportive or disruptive?
Winchester
Mainframe
14”
Mini
Desktop
8”
5.25”
. Architectural vs modular / elemental
. Same or different technological trajectory
3. Radical / substitutive or incremental / complementary?
. Bio technology and pharmacy
Professor Y. Doz
Portables
3.5”
2.5”
Disruptive, or not? Some key questions
new
4. For Whom?
(e.g., small office copiers)
XEROX
market
access
Same
new
CANON
Same
Professor Y. Doz
Disruptive, or not? Some key questions
5. How fast: Tornado or mild breeze?
- Dynamics of diffusion: Network effects and critical mass
- Misguided incumbent response
6. “Happening” or “created”?
- Innovations are “created”
- Creative destruction
- Strategic innovation
- New technologies are resources / tools for innovation
Professor Y. Doz
Why are incumbents (often) sitting ducks?
• Economic interest
. Better-off funding incremental supportive innovation
. Risk of accelerating substitution and destroying value
. Increasing returns to competence/installed base, trajectory lock-in
• Organizational logic
. Structural “fit”, interaction routines, collective tacit skills
. Successful strategies grow into mindless recipies
. Orthodoxies, rigidities, cultural homogeneity
. Internal resource allocation processes
. Lack of relevant, and well-located absorptive capacity
• Social heritage
. Network embeddedness (customers, suppliers, partners)
. “Ties that Bind”, unwillingness to challenge past commitments
. “Value networks” require collective agreement on change across firms
Professor Y. Doz
The incumbent's weak response
• Late, slow, half-hearted, tentative and ineffective
• On the “wrong” trajectory (accelerate their own, ignore the
new)
• Lacking critical mass, under funded, under supported
• Expensive
. Time compression diseconomies
. Lasting stalemate
• Often strategically flawed
. Transfer of “old” value creation system
Professor Y. Doz
To challengers, disruptive technologies
open a window of opportunity:
• They are disruptive for incumbents, supportive for challengers
• They mix technical , social and value innovations, making them difficult for
incumbents to emulate …
• They create / open vast new “low-end” markets to use a staging areas...
• They originate and spread below / beyond the radar screen of incumbents
• They draw on distant and diverse sources of knowledge
• They rely on new, or hard to enter, social networks
Professor Y. Doz
Incumbents that respond successfully
• Widely distributed prospecting for and active sensing of new
knowledge, worldwide, including emerging / latent market needs
• Cultivating absorptive capacity and knowledge melding
Professor Y. Doz
Mobilizing Globally Dispersed Knowledge
Prospecting and accessing distant
innovative competencies
and lead market knowledge
LOGIC: Discovery & Reconnaissance
Melding dispersed capabilities and lead market
opportunities to pioneer new solutions
LOGIC: Entrepreneurship & Mobilization
Optimising the scale and configuration
of Operations
LOGIC: Efficiency, Flexibility, & Financial Discipline
(Source: Doz, Santos, Williamson - "From Global to Metanational” - HBS Press, 2001)
Professor Y. Doz
STMicroelectronics in HDD electronics
Engineering and
Design skills in fast
microprocessors:
Bristol, U.K.
Joint Design center with
Seagate:
Scotts Valley, CA
Lead Customers R&D and
Engineering:
Seagate, Western Digital
(California,Colorado, ...)
Process Technology R&D in
BICMOS (mixed) and CMOS
(digital); Manufacturing(Front
End): Grenoble, France
Engineering and Design
skills in digital servo
controllers:
(JV) SSD - Dublin, Ir.
Competence on R/W
technology:
(JV) EXAR, CA
Engineering and Design Capability / Close
understanding of customer application /
Design Center: S. Jose CA
Process Technology
R&D in Bipolar and
BCD; Design
competence on analog
and mixed chips:
Milano, Italy
Coordination and
strategic capability:
Geneva, Switzerland
Design of ‘packaging’, testing
and final assembly (Back End)
capability: Malaysia, Singapore
Customers’ Manufacturing:
Singapore, and other Far East sites
MetaCorp 29
The Innovation Turbine
Sensing
Magnet
Attracting
Crucible
Relay
Leveraging
Professor Y. Doz
Tapping the world for new knowledge
(Shiseido in Fragrance)
Carita
“Les Salons”
Zouari
Sensing
French Suppliers
Gien Plant (France)
Beaute Prestige
International
Chantal Roos
Issey Miyake
Jean-Paul Gaultier
Melding
Product Development
Process
Yokohama:
Worldwide
Distribution
Product Strategy
Managers
Leveraging
Professor Y. Doz
Ofuna (Kamakura)
Plant
Incumbents that respond successfully
• Widely distributed prospecting for and active sensing of new
knowledge, worldwide, including emerging / latent market needs
• Cultivating absorptive capacity and knowledge melding
• Sustaining a pluralistic dialogue, internally and externally
• Creatively challenging existing orthodoxies and business models
• Letting “autonomous” strategic processes flourish, and select, at
various levels, from their outcomes
• Fostering Internal differentiation of organization
Professor Y. Doz
Why should disruptive technologies
matter to governments?
• Open, close opportunities for local industries, obsolete some, create
new ones
• Geographically displace knowledge bases of given industries,
markets …
• May change the rootedness of underlying knowledge, and, hence,
the need for knowledge clusters
• May call for new knowledge networks, and hence new knowledge
“hubs” (co-located core, global links)
• May change the social regime of an industry (e.g., from products to
networks), and its value creation and value capture points and
drivers
Professor Y. Doz
PixTech: A Metanational Start Up
Futaba
Motorola
Research &
Development
Raytheon
US
Financial
Market
Capital
Rhone-Poulenc
TI
F.E.D. Alliances
PixTech
LETI
Research
Nichia
SAES Getters
Materials Tech.
Unipac
Manufacturing
Professor Y. Doz
Sumitomo
Distribution
Small and medium entreprises
• What is “selected” by new “disrupted” conditions:
- cultural “memes”
- strategic initiatives, proposals, commitments
- individual firms
- networks
_Creating an internal strategic ecology does not work when you
are small!
• Are SMEs more or less adaptive than larger firms?
• Can global knowledge prospecting, sensing, accessing and melding
be achieved by SMEs? How?
• Are networks adaptive mechanisms or straightjackets?
Professor Y. Doz