R&D Management

© Springer India 2014

K B AkhileshR&D Management10.1007/978-81-322-1946-0_1

1. Introduction to R&D Function

K. B. Akhilesh¹ 

(1)

Department of Management Studies, Indian Institute of Science (IISc), Bangalore, Karnataka, India

Abstract

This chapter gives a brief introduction to R&D. The comprehensive role of research, development, science, engineering, and technology is based on the type of research activities undertaken in different organizations of India. This chapter also attempts to provide R&D categorizations in India under a global context. Further, we have discussed the functions of R&D, developmental activities, and its role in management. Finally, the chapter offers a wide range of operational definitions of R&D and developmental phases of R&D management in an organizational context.

Learning Objectives: To understand the role of R&D; to differentiate terms such as research, development, science, technology, and engineering; to understand the terms from the perspective of organizational context and application situation; to categorize R&D to view India in a global context.

Keywords

R&D functionsR&D initiativesElaborationResearchDevelopmentScienceTechnologyDefinitions of R&DCategorization of R&DScope of R&D

1.1 Introduction

The pursuit of knowledge has been a part of the global ethos for centuries. From time immemorial, we have seen developments in science and technology and also the growth of knowledge and the pursuit of innovation. The advent of industrialization, the change in industrial policies, and the growing focus on research and development have always been evident in various ways. Every society is in pursuit of knowledge, technology, and innovations, which defines a desired path, where science was denoted as a precursor to economic growth. As science was to be reformed, so was technology also to be affected. This reformation resulted in an organizational reset in the technology front, which led to the creation of the term Research & Development (R&D).

This chapter attempts to trace R&D function as it has evolved over a period of time. Further, the scope of the function is also elaborated in different contexts such as manufacturing and services and in different technology sectors, which include pharmaceuticals, drug development, cements, sugar, space, and so on. Essentially, R&D functions attempt to meet the competitiveness of organizations that are striving at their best to rise up to the standards in the technology era by following innovation, value-added services, and cost-competing platforms. Organizations need to understand and apply the industry standards as well as analyze and adopt the various available technologies to achieve better quality and productivity. This defines the functional scope of R&D activities in any organization. As a strategic function, compared to other similar functions such as human resource management (HRM), manufacturing, finance, and marketing, R&D activities contribute toward the growth and survival of any technology-intensive organization. R&D function is also responsible for enhancing the quality of life by providing improved products and features and functionality for the organizational goods and services. It is also the custodian of the intellectual wealth of the organization. It has to promote and sustain the creative efforts of engineers, experts, and scientists. R&D function is not restricted only to the organizational level. Its activity is also planned and supported at the state and national levels. Suitable policies and programs are required to encourage a scientific temperament in the country and build appropriate levels in talent transformation. Governments have to play a key role in developing universities and national laboratories, enhancing collaborations, creating machine-driven systems, and also providing budgeting support. R&D activity is generally undertaken by the government through its various departments of science and technology, the industry and organizations in both public and private sectors, and also the academia, which is increasingly focusing on building an environment of research. Initially, while most organizations developed their research capabilities in-house, today the focus is on collaboration, sharing of knowledge, and cost-effective investment, and with it, the role of licensing has become important. This was to be done by establishing universities, altering education systems, developing new laboratories, and building academia and industry collaborations.

Research & development has grown in most of the nations that are recognizing the growing need for innovation. The focus of most of the nations has been on R&D as a national strategy. Although currently, nations such as the United States, China, and Japan are leaders in innovation, this is a phenomenon that is no more geographically bound. R&D indicators are a matter of serious concern and are the focus of countries such as India, China, Russia, and Brazil along with other European nations.

Research & development activities in India have grown over a period of time through four distinct initiatives. The first was in the form of science education and the establishment of universities: Banaras Hindu University, Mysore University, Calcutta University, and Indian Institute of Science, which was patronized by the then Maharajas and princely states, gave the initial push for the scientific temperament in India.

The second initiative can be seen from individual scientists such as Jagadish Chandra Bose, CV Raman, and Ramanujam to name a few who set in the spirit of scientific achievement and aspirations in the country. The third root can be seen in the establishment of the many national laboratories by Jawaharlal Nehru, the first Prime Minister of India.

The fourth important initiative came in the form of the establishment of mission-driven organizations such as Indian Space Research Organization, Atomic Energy Organization, as well as Defense Research and Development Organization. One cannot ignore the significance of the four initiatives while understanding R&D function in the Indian context.

Indian public sector organizations such as Bharat Heavy Electrical Limited, Oil and Natural Gas Commission, Bharat Electronics Limited, Hindustan Aeronautics Limited, and many others pushed in the frontiers of R&D function from the 1960s to the 1990s. The period after 1991 will be described as the post-liberalization era, when the Indian government, public sector organizations, and business houses of India such as Tata, Birla, Kirloskar, and Reliance, through their inspired economic activities, showed the benefits of economic activities through the application of innovation. Technology-led growth not only created employment opportunities but also demanded more contribution from technical manpower.

Research & development has emerged as an important department in organizations with a clear view of providing a competitive edge at the strategic level, managing ideas and talent toward the development of new and improved products and services at the operational level. Similarly, at the national level, R&D is contributing toward the security of its citizens through the development of defense technologies and atomic energy applications on the one hand, whereas on the other, it is driving the economy by creating self-sufficiency with new innovations and products. Developing capability toward technical competence in a globally competitive era has been the main challenge faced by the country. Once the capabilities are developed, the other challenge lies in creating appropriate organizational and institutional form toward a climate of innovation and the development of new technologies.

The next challenge is to prioritize the allocation of resources for the smooth functioning of the organization by creating infrastructure, equipments, and facilities as well as implementing appropriate reward and incentive systems. Furthermore, the challenge is also to disseminate and transfer technologies, applications, and methods to the end users to realize the benefit of applications of R&D and to solve problems.

The next important challenge is to protect knowledge and technology through appropriate policies and practices. It is in this context that one needs to understand the scope and activities of R&D function at the organizational and at the national level.

1.2 R&D Categorization

R&D centers are categorized based on the types of research activity that is undertaken, which are classified as follows:

1.

R&D within an organization (colocated).

2.

R&D activities are contracted, collaborated, and located in university systems.

3.

Independent R&D laboratories not colocated.

4.

Captive R&D, which are contracted or outsourced within or outside the country (dedicated lab).

The categorization of R&D can also be classified based on the ownership of the organization. Figure 1.1 provides such a classification as well as lists some examples of organizations. It can be seen from Fig. 1.1 that there are national government laboratories focusing on defense research or atomic emery–related activities. Second, a group of R&D would be in the form of a university-led center of excellence or centers of advanced research, design, and development. The third category is basically government-owned manufacturing organizations. Government policies do influence their R&D activities, and it includes both central and federal or state governments. Some of the examples of government-owned organizations are Hindustan Aeronautics Limited and Bharat Electronics Limited. The next category of R&D is basically driven by private-sector organizations. They could be large, medium, small enterprises. The last illustrative category could be the form of multinational corporations. Hence, it can be seen that R&D function can take different forms and deal with different complexities depending on the ownership and nature of the organization.

Fig. 1.1

R&D categorization

1.3 R&D Function: Related Concepts

R&D function requires initial elaboration and clarification related to some of the commonly used terms and concepts. They include research, development, science, technology, and also engineering. Science is more concerned about why inputs, engineering is more concerned with why not, and technology should merely work and shouldn’t raise question graphs. Research is defined as a continuous process of inquiry or examination in which a detailed examination, especially analysis or experimentation aimed at the discovery of facts, review of conventional theories, or application of these theories, is conducted (Merriam Webster Dictionary, online dictionary). It is a three-step process used to collect and analyze information to understand a topic in depth. The three steps include posing a question, gathering data, and presenting an answer to the question (Creswell, online dictionary). Research is basic and applied in nature. Basic research is an experimental and theoretical process by which to acquire new knowledge without looking for longevity benefits other than the progression of knowledge.

Deloitte defines research as An original and planned inquiry undertaken with the outlook of gaining new scientific or technical knowledge and understanding (Deloitte 2011).

The Business Dictionary has defined development in various ways, which are listed as follows:

Development is a methodological use of science and technology knowledge to meet certain goals or requirements.

It is an extension of theoretical or practical aspects of a concept, design, discovery, or invention (Business Dictionary, Online dictionary).

Development aims at providing solutions to the problems faced. Development makes corrections according to the feedback provided in the research platform, which is more useful for end use. Hence, development is defined as A process prior to commercial production wherein research findings are applied to design new qualitatively improved outcomes in any organizational platform (Deloitte 2011).

Developmental activities conducted by organizations at various levels are stated as It is the design, construction and testing of pre-production or pre-use prototypes and models. It is the design of tools, jigs, molds and dies involving new technology. It is the design, construction and operation of a pilot plant that is not of a scale economically feasible for commercial production. It is the design, construction and testing of a chosen alternative for new or improved materials, devices, products, processes, systems or services (Deloitte 2011).

Science is a basic platform for knowledge. It comprises more of the fundamentals, laws, theses, and proved experiments. It is a set of theories, which are more basic in nature. Science is more concerned with how and why things happen.

Science can also be defined as A system of acquiring knowledge. This system uses observation and experimentation to describe and explain natural phenomena. The term science also refers to the organized body of knowledge people have gained using that system.

Fourth, Technology is defined as a market application, which is dependent on science. It is defined as an Application of knowledge to bring in practical change in human environment. This is done by using materials, tools, techniques and sources of power. Technology focuses on making things happen. The word technology can also be referred to as a collection of techniques. In fact, it is the combination of resources to produce desired outputs or solve problems, which includes raw materials and tools, technical methods, skills, and processes (Wikipedia 2012).

Finally, the one which gives shape to these definitions is engineering. Engineering is mainly a combination of measurements and execution of methods. It is the manufacturing platform to increase the scalability of a product. It is defined as the Professional art of applying science to the optimum conversion of the resources of nature to the uses of humankind (Wikipedia 2012).

1.3.1 R&D Management

R&D management is defined as a combination of the tasks of innovation management (i.e., creating and commercializing inventions) and the tasks of technology management (i.e., external and internal creation and retention of technological know-how). It includes various activities such as basic research, fundamental research, technology development, advanced development, concept development, new product development, process development, prototyping, R&D portfolio management, technology transfer, and so on. But certain independent activities such as technology licensing, innovation management, IP management, corporate venturing, incubation, and the like are not included in R&D management.

R&D functional aspects include a kind of functional orientation like production, human resource, marketing, and finance. These functions are basically necessary to attract, develop, and retain scientific manpower.

1.3.2 Technology Management

Technology management is the strategic aspect of making or buying technology. It mainly constitutes tech roadmapping, positioning of products to market conditions, and strategizing time to market.

In a company that has a nonassertive patent strategy, improvement initiatives in technology management will face problems if no balance is maintained between product and process innovation. Technology management has been explained more precisely in the subsequent chapters.

R&D management and technology management are on the same continuum and work together for the progress of technology and innovation in an organization.

1.4 Scope of R&D Management

Organizations can effectively manage their R&D operations as indicated in Fig. 1.2.

Fig. 1.2

R&D operations in organizations

The scope of R&D function can be explained in different ways. The first step is to understand the business needs of the organizations. These could be to enter and expand new markets, provide better services, and integrate and deliver new features. R&D function essentially has to link technology and available innovation to the identified needs of the business. Furthermore, it has to determine the gaps in terms of know-how and know-why. Identification of these gaps will leave R&D to decide on the technology in-house and acquire new technology from other organizations. While determining the nature of the technologies to be acquired or developed within the organization, R&D must have a futuristic view of how products and services will provide new opportunities and scope of expansion for the organization. While conducting these basic activities of understanding, determining, and identifying, R&D function has to acquire the sources, create infrastructure, and develop talent to effectively execute the specific projects.

Questions

1.

Define R&D management.

2.

Explain the developmental phases of R&D management in India.

3.

Briefly explain the scope of R&D management.

Exercise

1.

Visit R&D labs, and discuss with R&D managers their experience postlibera-lization.

References

Deloitte (2011) Research & Development expenditure. A concept paper. http://​www.​deloitte.​com/​assets/​Dcom-India/​Local%20​Assets/​Documents/​Whitepaper_​on_​RD_​expenditure.​pdf. Accessed 20 Nov 2012

Wikipedia (2012) http://​en.​wikipedia.​org/​w/​index.​php?​title=​Technology&​oldid=​524091247. Accessed 20 Nov 2012

© Springer India 2014

K B AkhileshR&D Management10.1007/978-81-322-1946-0_2

2. R&D—Reactive and Passive Partner to Responsive Collaborator

K. B. Akhilesh¹ 

(1)

Department of Management Studies, Indian Institute of Science (IISc), Bangalore, Karnataka, India

Abstract

Organizational changes are perceived as reactionary and revolutionary responses to overcome the challenges faced during developmental phases of an organization. In the present chapter, we look at how different phases of R &D generations have encountered a wide range of technological, organizational, and structural challenges. The next section of this chapter accentuates the role of understanding context, structure, and process in R&D organizations. Contextual factors are ownership, location, pace of technology change, and organizational environment. Structural factors are formalized and standardized representations of hierarchy, authority, delegation, and coordination. Finally, the process emphasizes the end actions of organization through transformational leadership, goal setting, and timely decisions. We conclude this chapter with the new emerging dimension and future of R& D organizations of being ambidextrous. Ambidextrous organizations are an agenda to understand its own capability to keep their vision, goal, and strategies at par with market needs and technology development.

Learning Objectives: To explore the movement of R&D from being a reactive to a responsive partner in the organization; to understand the context, structure, and process of the R&D organization or R&D functioning; to analyze the evolution of five generations of R&D; to explore the challenges encountered in the changing face of R&D and the future in the context of ambidextrous organizations.

Keywords

Reactive & passive partnersR&D generationsEvolutionFrameworkConfigurationMethodologyStructuresThe future of R&D

2.1 Introduction

R&D in an organization has changed the manner of functioning over the years. The layers of complexity have increased and with it the challenges it brings. In this chapter, we explore the evolution of R&D from being a reactive partner to a responsive collaborator in the organization. We also explore the changes over generations and the forces at play, the structure and process changes, the challenges involved, and the future in the context of ambidextrous organizations.

In the initial years, R&D had a slumberous existence. There was not much done until a problem was referred. With very little business pressures and methodology being standardized, the rate of change of any process was also low. At this point, R&D was in peaceful coexistence with other departments. Over time, as other functions came under pressure and performance became an important criterion, problems were shared, and people looked for solutions. The R&D department then assumed the role of a solution finder, and it thus became a reactive partner.

In an organization, when relationships are built and competencies are recognized, we have the process in place that makes work comfortable. Many a time, relationships may be strained, and there may be problems. In such cases, there is a tendency to either work for solutions or push the problems into the background. Effective problem solving involves several steps—accepting the problem, exploring available resources and generating alternatives, and identifying a specific course of action to solve a problem. At this level, R&D function gets its role and relevance defined around the problems experienced by the organization.

The next level involves whether R&D function is more proactive or not. Proactiveness involves listening, analyzing, and exploring of the problems of others by the R&D team. This enables establishing the identity of R&D function. In this situation, while establishing the R&D identity, they look for support from others and communicate with others so that they can solve and create common perceptions about problems and alternatives and thereby move on to the third level.

At this level, R&D establishes high levels of interdependencies, creating benchmarks and standards and accepting deviations as R&D problems that need to be addressed. The function then becomes more data based and data centric, and manufacturing and customer details are analyzed to obtain new patterns. The matrix of R&D is not only the degree of newness achieved through various activities but also the commercialization of products and services. R&D is then pushed toward generating resources, moving away as a cost center, and getting linked with other functions of the organization. As the function moves on to the fifth level, we see that R&D is now in the responsive mode. Here, the basic concern is the customer and the business model of the organization. The emphasis is now on analyzing the business trends, the competition and the competitor, and benchmarking. Through some of these, it defines the leadership of the organization through appropriate R&D activities.

2.2 The Five Generations of R&D

R&D growth over the years has been classified into five generations by some of the authors (Rothwell, Rogers). These authors have perceived that the scope, role, and responsibility of R&D function has experienced significant changes. Such changes at times are seen as reactionary or revolutionary to overcome the challenges faced by organizations. The five generations are described in the following paragraph. It is essential to understand that every generation brings with it various challenges, and organizations have to work to update their strategic vision, improve their innovation process, and look toward newer markets.

2.2.1 First-Generation R&D: Technology Push

According to Rothwell (2005), R&D growth and activities can be categorized into five generations based on research during each decade; according to him, the 1950s and 1960s can be seen as the era of technology push. This phase assumed that R&D would operate from an ivory tower and decide what technologies are required unilaterally. Independent researchers worked in an isolated fashion, and R&D produced solutions with the attitude of take it or leave it. Rothwell also recognizes this generation of R&D as having almost no interactions and one that kept delivering from a position of isolation. New industries emerged from the innovation derived from laboratories and breakthroughs.

2.2.2 Second-Generation R&D: Market Pull

The second-generation R&D was more categorized by the market pull. This part of R&D forced organizations to examine the needs of the business. They had to work with other business functions such as operations, manufacturing, and marketing. R&D intentionally developed communication channels to appreciate the needs of the customer. Organization structures are evolved to scientific research outputs and delivery requirements of the organizations. Effective integration was essential for the success of the R&D efforts.

2.2.3 Third-Generation R&D: R&D and Marketing Work Hand in Hand

According to Rothwell, the third generation really evolved in the 1970s and 1980s. Organizations had to decide among different projects to succeed in the marketplace. Markets were perceived as dynamic and changing. R&D function had to be more goal directed. Essentially, their activities had to be tuned with market opportunities. Markets took on R&D to be more competitive. They not only emphasized innovation but also cost competitiveness. R&D management broadened their perspective, became inclusive, and appreciated the scientific and engineering challenges internally and also the significant changes in the marketplace externally.

2.2.4 Fourth-Generation R&D: The Integrated Business Processes

The fourth-generation R&D, which happened in the early 1980s to the mid-1990s, provided the scope of functioning through effective understanding of the value creation process. Value is what the customer pays for and recognizes the products and services in the dynamic marketplace. Customer centricity demands that R&D be continuously learning about changes in the environment and differentiating the customer needs and expectations. Satisfaction of the customer and exceeding the expectations of the customer were considered as the main business value, hence R&D had to be much more creative and knowledge intensive to come up with appropriate products and services. High priority on cost considerations and the need to be continuously delivering new products, new features, and processors made R&D an integral part of the business. R&D managers had to know the details not only of the business and customers but also of quality and finance requirements. Business intelligence, budgeting, forecasting, and roadmapping became part of the major function of R&D.

2.2.5 Fifth-Generation R&D: System Integration and Networking

This generation of R&D according to Rothwell began from the 1990s. The dynamic and changing context, uncertain environment, severe resource constraints, high degree of configuration, and the demanding customers pushed R&D to work continuously to be watchful of the future as well as current complexities. Flexibility was demanded internally to respond to the various demands of the customers as quickly as possible. Speed became the essential element of R&D functioning. R&D had to work in a network fashion with suppliers, partners, and internal and external customers to create new intellectual assets. Knowledge management was considered essential to deliver value propositions. In other words, continuous innovation and delivery of new products and services was part of R&D function. R&D had to create a new future for the organization in a discontinuous business situation. Collaborating internally and externally to acquire new ideas and networking for innovation was more of a necessity than a luxury (Table 2.1).

Table 2.1

The five R&D generations