James M. Utterback

A dynamic model of process and product innovation

This article reports results from empirical tests of relationships between the pattern of innovation within a firm and certain of the firms characteristics: the stage of development of its production process and its chosen basis of competition. The hypothesized relationships posed for the present investigation are a synthesis of prior research by the present authors on two distinct but complementary conceptual models of innovation, concerning respectively: the relationship between competitive strategy and innovation, and the relationship between production process characteristics and innovation. The empirical investigation is carried out with data available from the Myers and Marquis study of successful technological innovation in five different industry segments. The essential aspects of the hypothesized relationships are that the characteristics of the innovative process will systematically correspond with the stage of development exhibited by the firms production process technology and with its strategy for competition and growth. As a more specific example these relationships predict that there will be coherent patterns in the stimuli for innovation (market, production or new technology); in the types of innovation (product or process, original or adopted, etc.) and in barriers to innovation. The presently reported statistical evidence is decidedly favorable to the hypothesized relationships, even though the adaptations needed to implement tests with existing data introduce dependencies that limit conclusions which would otherwise be warranted. The broad implication is that strong and important relationships exist among the capability of a firm to innovate, its competitive strategy and the posture of its production resources.

Innovation, competition, and industry structure

Why some firms die while others survive? Survival has long been recognized as a basic goal for a manufacturing firm. At least in the long term, survival should be related to various measures of performance, such as market share and profitability. Advocates of population ecology have argued that life chances of organizations are affected by population density at the time of founding. According to this argument, organizations founded during periods of intense competition will have persistently higher age-specific rates of mortality than those founded during periods with lower numbers of competitors. At least for the case of manufacturing firms, there may be more profound causes than competitive turmoil that explain a firms survival chances. These have to do with the evolution of technology in an industry. Population density may only be a reflection of underlying driving forces based on technological change that determine the form and level of competition, the attractiveness of entry, and ultimately the structure of an industry.

The Process of Technological Innovation Within the Firm

The effectiveness of firms in originating, developing, and implementing technical innovations is viewed as a function of three sets of factors: (1) characteristics of the firms environment, (2) in...

Product development cycle time and commercial success

Proponents of time-based competition argue that a firm will be most successful if its development times are shorter and products generated faster than its competitors. Intensive research in one firm shows that rapid development times are not correlated with expected commercial success, and that forcing rapid development when technological and market uncertainties are high may produce failure. Difficulties in technology integration, which occur when multiple core technologies must be combined, slow the speed of developing new products. New channels of distribution will also extend the time required to develop and bring new products to market. Shortened cycle times may be associated with commercial success, but to pursue reduced cycle time in isolation from underlying organizational and technical foundations will not lead to improved performance. These foundations include the longer term development and renewal of functional product architectures and manufacturing processes from which specific products can be efficiently and rapidly synthesized, as well as a product planning and control system that reaches beyond single product, single period thinking. Without these, the effort to drive down cycle time may drive the firm out of business.

A review of literature and hypotheses on new technology-based firms☆

Abstract This paper examines the existing literature on new technology-based firms in an attempt to understand how such companies contribute to the vitality of an economy and to see which variables are critical in enabling them to do so. From recent research efforts, we have drawn together a set of hypotheses and organized them around four central questions: (1) What do new firms contribute to the economy? (2) What factors contribute to the success of such enterprises? (3) In what cultural contexts do new businesses succeed? and (4) Which government policies are effective in stimulating and supporting new companies? We found that existing studies suggest (1) that new technology-based firms contribute significantly to an economy in terms of exports, employment, taxes paid, research and development, and innovations; (2) that the founders of these new businesses tend to have a strong entrepreneurial heritage, a development- rather research-oriented background, and a high need to achieve and are young and highly educated; (3) that sector differences may be a more important influence on company location than are regional policies; and (4) that no one government program has proven itself to be more than marginally successful in stimulating industrial innovation.

The process of innovation in five industries in Europe and Japan

The study examines the relationship between outside influences and the firms innovation process. A sample of commercially successful and unsuccessful R&D projects of a number of firms is discussed in terms of diverse market, resource, technical and organizational factors. The stimulus for a project, the sources of ideas used and the influences of competition and regulatory constraints were expected to vary among industries, and these differences are described. The authors suggest that their findings might be understood based on the evolution of a business from one having initially fluid and independent product and process technologies to one having a highly automated process technology designed for a specific standard product. Consequently, the relationship between product and process will shape and constrain the firms ability to innovate in response to a changing environment.

Multi-mode interaction among technologies

Abstract Technological innovation is manifested in the development of new products, processes and techniques such that emerging technologies often substitute for more mature technologies. The interaction between technologies is typically referred to as competition , implying a confrontational interaction. The setting of technology strategy is thus often concerned with issues relating to the competition between emerging technologies and the response of mature technologies to the offense from emerging technologies-strategies for attack and defense. In this paper it is argued that the interaction between technologies should be viewed in a broader sense than mere competition, and it is suggested that a multi-mode framework provides a much richer setting for assessing the interaction of two or more technologies. This concept has been successfully applied in biological and organizational ecology, and it is shown that it can be equally useful when applied to the dynamics of technological interaction. It is proposed that the effect that one technology has on anothers growth rate be taken as a classification criterion. Examples are given to illustrate that three major modes of interaction exist, namely pure competition, symbiosis and predator-prey. In addition, the notion that the interaction between technologies can in general shift temporally from one mode to another is motivated. It is suggested that, since the characteristics of the three modes differ from one another, it is appropriate to develop managerial strategies that apply specifically to each of the three modes, instead of just applying generic ‘competition’ strategies.

Invasion of a Stable Business by Radical Innovation

How does technological change occur in an organizational, market and manufacturing context? How does innovation in products and processses affect a firm’s competitive viability? Do patterns of innovation occur from firm to firm or within one firm over time? If so, what are the implications for research on organizations and for management? Recent work on innovation in industry contends that product innovation, process innovation, and organizational structure and processes become inextricably linked as an organization and its line of business evolve. The changing relationship among them stimulates certain directions of further change while it constrains others or makes them less and less attractive (Abernathy, 1978; Abernathy and Utterback, 1978). In brief, incremental innovations albeit with great commercial rewards, become more and more attractive, while more radical departures, the subject of this chapter, become diminishingly attractive to established, dominant competitors.

Monitoring for Technological Opportunities

This publication contains reprint articles for which IEEE does not hold copyright. Full text is not available on IEEE Xplore for these articles.

Identification of technological threats and opportunities by firms

Abstract A number of models and approaches are being developed in attempts to anticipate the nature and direction of technological change and its impact on the firm. Under what conditions might we expect firms to use one or more of these models in an organized way and under what conditions might we expect the resulting information to be used in the firms planning process? The basic hypothesis of this paper is that effective use by firms of models for anticipating technological change can be explained based upon: the nature and extent of uncertainty in the firms environment,the firms strategy for growth, and the degree of definition of communication networks (both formal and informal) within the firm and between the firm and its environment. Technology planners and managers of 29 firms in a variety of industries have been interviewed concerning the ways in which technological threats and opportunities are identified and analyzed and the ways in which this information is integrated into the firms normal planning cycle. A follow-up questionnaire is being designed to be sent to a larger number of respondents.