Post on 27-Mar-2015
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Effective Alignment of Innovation
European Manufacturing Survey 2006/7
dr. Paul E.M. Ligthart prof. dr. Ben Dankbaar &
dr. Peter Vaessen
correspondence: P.Ligthart@fm.ru.nl
Center for Innovation Studies
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http://www.european-manufacturing-survey.eu • Germany: Fraunhofer Institute System and Innovation Research • Austria: Division Technology Policy; ARC Systems Research • France: BETA, Université Louis Pasteur Strasbourg • Switzerland: Institut für Betriebs- und Regionalökonomie,
Hochschule für Wirtschaft in Luzern • Sabanci University Istanbul, Turkey; • Croatia: Economic Faculty, University of Zagreb • Netherlands: Nijmegen School of Management, Radboud
University Nijmegen • Slovenia: Faculty of Mechanical Engineering, University of
Maribor;• Spain: Department of Business Administration and Product
Design, University of Girona • Turkey: Competitiveness Center, Sabanci University Istanbul • And sponsor of NL-EMS, Rabobank
In collaboration with our EMS-partners
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Research Objectives
• Effective Alignment of Innovation– To gain insight in the interplay of different types
of innovation and how this affects business performance
– “best practices” that combine technological and organizational innovations (optimal configuration) leading to better (business) performances ;
– Determinants of these optimal configuration (s)”The need to overcome the split between innovation as
driven by supply factors versus innovation as driven by demand factors” (Freeman 1997).
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Main Dimensions of Innovation• Technological innovation – Administrative innovation
– Daft, 1978; Damanpour, 1991; Cooper, 1998
• Process innovation – Product innovation– Damanpour, 1991; Cooper, 1998; Tidd et. al., 2005
• Incremental innovation – Radical innovation(i.e. new for the business, new for business and market)– Daft, 1978
Main focus has been on determinants of (the types of) innovation (Totterdell, 2002), e.g.
- large, complex, participative firms, more product innovation (Scuilli 1998)- research oriented small firms, more product innovations (Rothwell’s 1983)- small (banking) firms adopt more process innovation (Scuilli 1998)- organisation size, more innovation activity (Anderson & King 1993)
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Three dimensional model of Innovation (Cooper, 1998)
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Two dimensional model of Innovation
Product Product / Service combinations
Product innovation
Process Innovative organisation
Process technology
Non-
Technological Technological
Classification of different paths of innovation (Kinkel, Lay & Wengel, 2005)
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Shift from Supply to Demand of Innovation
• ‘Different types of innovation, or innovations possessing different characteristics, will have a differential impact on the various consequences of innovation’(Totterdell et al. 2002, p. 345).
– Different types of innovations affected stakeholders differently (Totterdell et al. 2002), e.g.
• administrative innovation => employee relations
• Product/service combinations => customers
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Research hypotheses
• Differential effect of types of innovation on performances (Differential hypothesis)– Different types of innovation affect different indicators of business
performance
• Alignment of types of innovation increases performance(Alignment hypothesis)– Coherence between types of innovation increase business
performance
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Methodology• European Manufacturing Survey 2006-7
– Topics: utilisation of specific innovations in production process, new organisation concepts, product/services combinations, performance indicators, outsourcing, collaboration, staffing.
– 3344 production plants of Manufacturers (Industry: NACE 15-37) (focal respondent: managing director / plant manager)
– Multinational survey in 9 countries:(Germany, Switzerland, Austria, Spain, France, Croatia, Turkey, Slovenia, Netherlands)
– Different branches of the Manufacturing Industry:(Metal, Food, Textile, Construction, Chemical, Machinery, Electronic, Transport)
– Participation incentive: on-line benchmarking Website: http://www.european-manufacturing-survey.eu
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Operationalisation & Scaling: Technological Process Innovation
Reliability:
• Cronbach’s alpha: 0.76;
• 13 items,
• N=3150
0% 10% 20% 30% 40% 50% 60% 70% 80%
Computer Aided Design
Virtual reality design
Computer Aided Machines
Integration CAD\CAM
Industrial robots
Computer controled warehouse
Automated Machine Vision systems
Process integrated quality control
Cleanroom
Production planning systems
Simulation process design
Supply chain management
Bio-genetechnology
mean proportion
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Operationalisation & Scaling: Organisational Process Innovation
Reliability:
• Cronbach’s alpha: 0.73;
• 13 items,
• N=2708
0% 10% 20% 30% 40% 50% 60% 70% 80%
Continuous improvement process
Quality management
Regular individual potential review
Account working timeIntegration of tasks
Client/product specific production
Decentralisation of functionsJust-in-time supply
Internal zero-buffer principle
Balanced scorecardSimultaneous engineering
Environmental audit ISO 14001
Team work in production
mean proportion
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Operationalisation & Scaling: Product\Services combination
Reliability:
• Cronbach’s alpha: 0.78;
• 8 items,
• N=3268
0% 10% 20% 30% 40% 50% 60% 70% 80%
Design\consult\planning
Technical documentation'
Software development
Leasing\rent\financing
Assemblage\startup
Training
Maintenance\repair
Build-operate-own
mean proportion
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Operationalisation: Product Innovation \ RDinvest
• Product-innovation
N=3344
• RDinvest
N=2354
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
FIRM
FIRM+MARKET
Business with Product Innovation
no RDinvestments
decreased or equal RDinvest
increased RDinvest
Business with RD investments
mean proportion
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Descriptives: RDinvest, Types of Innovation
Type of Innovation Mean StDev N I II III IVRDinvest (percentage) 4.12 5.63
I lnRDinvest share R&D turnover 1.25 .86 2184 1II Tech_Inn Technological Innovativeness 4.82 2.93 3344 .250 1III Org_Inn Organisational Innovativeness 6.20 2.84 3344 .179 .574 1IV ProServices Product related services 3.32 2.27 3344 .349 .221 .187 1
MedianV Productinnovation (Kendal's Tau) 1 3344 .244 .199 .204 .196
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Descriptives: Performance Indicators
Performance Indicators
Mean UnitTrans-formed Stdev N I II III IV V
I lnDeliveryTime 41.97 day 3.01 1.23 3257 1II lnOnTime 89.21 % 2.64 1.02 3280 -0.314 1III lnScrapRate 3.06 % 1.04 .77 3155 0.205 -0.267 1IV lnProdLeadTime 562.10 hour 4.92 1.93 2956 0.584 -0.240 0.154 1V lnSetupTime 208.74 minute 4.09 1.58 2772 0.150 -0.075 0.062 0.199 1VI PEgrowth 1.42 employee 50.02 28.84 3172 0.022 -0.036 0.003 -0.004 0.019
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Omnibus Effects on Performance Indicators (delta_RSQ)
0.00 0.03 0.06 0.09 0.12
lnDeliveryTime
lnOnTime
lnScrapRate
lnProdLeadTime
lnSetupTime
PEgrowth
lnSize Country Industry dRDinvest7c Innovation InnAlignment
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Differential and Alignment Effects of Types of Innovationcontrolled for lnSize, Country, Industry, and RDinvest
lnDeliveryTime - lnOnTime +
lnScrapRate -
lnProdLeadTime -
lnSetupTime - PEgrowth +
B Sig B Sig B Sig B Sig B Sig B SigType of Innovation
dProductinnovation 0.148 *** 0.099 * 0.004 0.133 -0.100 -4.030 ***Tech_Inn 0.035 * -0.008 0.000 0.023 0.075 ** 0.186 Org_Inn -0.032 * 0.060 *** -0.029 ** -0.032 -0.014 0.250 ProServices 0.112 *** -0.014 0.030 * 0.146 *** -0.051 -0.244
Allignment of InnovationcTO_inn -0.007 ** 0.008 *** -0.004 ** -0.008 * -0.002 0.012 cTPS_inn 0.000 0.001 0.001 0.004 0.002 0.241 *cTPr_inn 0.000 0.004 -0.003 0.045 -0.017 0.176 cOPS_inn -0.004 -0.002 -0.007 ** -0.011 -0.002 -0.058 cOPr_inn -0.023 -0.004 0.006 -0.053 -0.017 -0.564 cPSPr_inn -0.010 -0.002 -0.021 -0.029 -0.019 0.544
RSQ full model 0.266 0.109 0.053 0.170 0.057 0.046
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Findings: Differential Hypothesis
• Types of Innovation have differential effects on the performance indicators– Product innovation:
(-) DeliveryTime, PEgrowth
(+) OnTime– Technological Process innovation
(-) DeliveryTime, SetupTime– Organisational Process innovation
(+) DeliveryTime, OnTime, ProdLeadTime– Product/Services combinations
(-) DeliveryTime, ScrapRate, ProdLeadTime
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Findings: Alignment Hypothesis
• Coherence between Types of innovations increases performances– Innovation Technological and Organisation combined
(+) DeliveryTime, OnTime, ScrapRate, ProdLeadTime– Innovation Technological and Product combined
(+) PEgrowth– Innovation Organisation and Product/Services combined
(+) Scraprate
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Conclusions I
• Innovation is more than investments in R&D, i.e.– Technological Process Innovation– Organisational Process Innovation– Product Innovation– Innovative Product/Service combination
• Alignment of Innovation (policies) suggests “best practices”, i.e. – Organisational Process Innovation (only positive effects)– Combining Technological Process Innovation and
Organisational Process Innovation (only positive effects)– …
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Conclusions II
• Limitations– Cross-sectional survey: no causal inferences– Effects are relatively small, additional insights
necessary
• Further research:– Search for of specific combinations of concrete
innovations belonging to these “Best Practices”– Impact of Radical versus Incremental Innovation
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Effective Alignment of Innovation
European Manufacturing Survey 2006/7
dr. Paul E.M. Ligthart prof. dr. Ben Dankbaar &
dr. Peter Vaessen
Center for Innovation Studies