Knowledge Processes and Networks

Automotive Sector

Ulrich Jürgens/Antje Blöcker/Stewart MacNeill

Birmingham , 10 April 2008

European Core Industry

Source: Alphametrics 2008

below 1

1 - 2

2 - 3

3 - 4

4 - 5

above 5

Employment in NACE 34 in % total employment

2006(NUTS 2 level)

Regional location of jobsThe process of regional

specialisation develops

around innovation clusters

Source: Alphametrics 2008

Restructuring

OEM affiliateor spin-off

Supplier

Sub supplier

OEMlocation country A

OEMOEM

Outsourcing(near/far)

Off-shoring

Allied orrival OEM

OEM affiliateor spin-off

Sub supplier

Supplier

Sub supplier

Allied orrival OEM

Supplier

The caravan moves on

Country B

Restructuring Dynamics – Crossing Organizational and National Borders

Source: Blöcker/Jürgens 2008

Worlds of Production

Standardised

Specialised

Generic

Dedicated

Sports cars Motorsport

Niche Vehicles

Luxury Cars

Mass Production

High investment in R&D expensesOEM dominated knowledge processes in in-house research centre (centralisation) and Simultaneous Engineering Centre, Segmentation in basic research and series development

R & D expenses and operating investment - in% of turnover -

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

DCX VW PSA Renault Fiat auto GM Toyota Ford Nissan BMW

20022003200420052006

Source: Alphametrics 2008

Character of Knowledge Processes

• multi-technology industry: with no specific analytical base/scientific discipline as a point of departure. Specific to the auto industry are the requirements and capabilities of technological integration.

• multi-actor industry, composed of a multitude of specialists and with a strong, ongoing trend towards further specialization (new business models

• multitude of interfaces– Interfaces between academic disciplines. Differences in the methods and mindsets of

people with a background in mechanics and electrics/electronics have recently been playing an increasingly important role (not least as a source of problems).

– Interfaces between functional organizations within firms. The classical interface is that between product development and production.

– Interfaces between firms and other external actors involved in processes of various sorts.

– Interfaces between hierarchical levels and between planners and executors of work (as exemplified by the classical Taylorist divide).

• New important role of non-automotive knowledge (e.g. from the health sector or from aerospace)

• Many contradictory goals and interests

OEM

R&D-Department

System- Supplier(e.g. Door-Modul, Frontend,

bumper, plastic tanks

Engineering Service Firms

Small specialzed Engineering Firms(construction,

Rapid Prototyping,Simulation)

Software- Service Firms(CAD-Systeme, Data-managementsystems)

Consultants(e.g. Projectmanagment, Simultaneous

Engineering, TQM, Kaizen)

Parts- and Components-Suppplier(e.g. glas, gaskets, tubes

Primary Service Relation

Secundary ServiceRelation

Adapetd from Rentmeister 2003

• OEM control over system architecture: Examination is the core process of knowledge creation and transfer as an integral part of all phases

• 1st-tier-Supplier control over new knowledge areas(electronics, new materials ...)

• Universities & research institutes play an increasing role in basic research, e.g. engine technology: New local/regional public-private Innovation Networks for analytical knowledge

• Engineering Service Firms are agents of 'Open Innovation and for non-automotive competences

Knowledge Networks?

Challenges: Knowledge dynamics

• Diversity and distribution• Closed proprietary knowledge• Front-loading• Protection of knowledge• Digitization• Labour mobility and knowledge

migration

Changing structure of occupations

Percentage point change in division of employment in EU15, 2000-2007

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0Expanding jobs

Source: Alphametrics 2008

Very low share of women: 94 % of engineers and 93 % of skilled workers are men

Engineers-5

0

5

10

15

DE ES FR ITEU15

NMS

DE ES FR ITEU15

NMS

Business, finance, salesSkilled workers

-4

-2

0

2

4

6

8

10

DE ES FR ITEU15

NMS

DE ES FR ITEU15

NMS

Production line workers

Change in % of women employed between 2000 and 2007

Professionals Skilled and semi-skilled worker

Source: Alphametrics 2008

Knowledge Categories

Analytical Synthetic Symbolic

Exploration(Search and research)

Basic physics, chemistry-Thermodynamics-Acoustics-metallurgy

Product-Sensors, electronics, systems, hybridsProcess-Systems design, integration teamsSupply matrixDownstream relationsMarket research

-Societal and political trends-Brand image and perception (values)-Demography, Health

Examination(Trialling, testing, standard setting, benchmarking)

Test/trial-Catalysts-Dynamics-Noise and vibration-Fuels/efficiency

product and process triallingRegulation-Safety-Environment-(homologation process)Production methodsLogistics – upstream and downstream

Styling -Concepts – aesthetic and ‘hard’ innovations interaction

Exploitation(Commercialisation)

Specialist firms-e.g., engine, chassis, body+-Universities and research institutes

Commercialisation- product mix- Supply matrix and logistics management-Patenting – specialist firms and research institutes

-Branding, brand values-Communication, PR, (selling) -Presentation-Downstream-Dealerships-Specialist Firms

Policy Fields

Knowledge Target Policy

Implicit - organisations

Networked

Explicit knowledge targets

Top down aimed at mass production ( Pre-1975 – mid 1990s)

Shared – but increasing local influence 1995 - 2004

Local Strategy –knowledge based Regional specialisms 2004 onward

Public support Science/business parks Location Grants

QCD measures Networking Clusters

Science/engineering Centres of Excellence New technology