Rahul Kapoor, Management Department Emerging Technologies: “Nokia” Problem Anticipating the...
Transcript of Rahul Kapoor, Management Department Emerging Technologies: “Nokia” Problem Anticipating the...
Emerging Technology Strategies
Rahul Kapoor, Management Department
Managing Emerging Technologies: “Xerox” Problem
Rahul Kapoor, Emerging Technologies
Managing Emerging Technologies: “Nokia” ProblemAnticipating the emergence of smartphones in 1990s, Nokia outspent rivals on R&D and created a series of innovations
R&D Expenses and Key Innovations (US$ Bn)
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Nokia
Apple
Nov 2005Nokia launched first internet tablet N770
Nov 2004Launched Nokia 7710, first smartphone with touch screen device
Aug 2007Nokia launched its mobile internet platform Ovi
2000Symbian became the first modern smartphone OS with launch ofEricsson R380
1996Nokia introducedits first smartphone, Nokia 9000Communicator
Rahul Kapoor, Emerging Technologies
Nokia – Fall of the Emperor
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13.0% 17.6% 12.2% 5.9% 5.4% 1.8% -8.0%EBITMargin
Dark Age (2008 ~ Current)
Golden Age ( ~ 2008)
Share Price (€)
Rahul Kapoor, Emerging Technologies
Research on Emerging Technologies
Rahul Kapoor, Emerging Technologies
Solar Powerw/ Nathan Furr (SMJ 2015, SMJ 2017)
Smartphonew/ Shiva Agarwal (Org Sc. 2017, WP 2017)
Pharmaceuticalw/ Thomas Klueter (AMJ 2015, Nat. Bio. 2017)
Lithography w/ Ron Adner (SMJ 2010, SMJ 2016)
Semiconductorw/ Ron Adner (Org Sc. 2012) (Org Sc. 2013, ASM 2013)
Healthcarew/ Joon Lee (SMJ 2013, Org Sc. 2017)
Organizational Inertia in Established Firms
Leadership & Strategy
Structure &Process
Incentives
Culture & Mental Models
Individuals becomeInvested in old approachesStrategic/competitive position provides an excuse for inertia
Existing incentives often work against significant change, and new incentives take time and work. Who benefits from the new technology?
Wholescale changes to structure and process arevery disruptive: Two years of lost time? To Whom?
Strong cultures & deeplyrooted mental models areextraordinarily resistant to change
Rahul Kapoor, Emerging Technologies
Useful representation when innovation is isolated within the firm and/or the user
This assumption is becoming increasingly problematic as firms are becoming more specialized and the value proposition for innovations becoming more complex
User- Needs- Preferences
Firm- Assets- Capabilities
Innovation Market
Context for Innovation (Traditional)
Rahul Kapoor, Emerging Technologies
Innovation
User
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Innovation
Market
Firm
Components(Suppliers)
Complements(Complementors)
≈
(Intermediaries)
Context for Innovation (Today) Ecosystem
Rahul Kapoor, Emerging Technologies
Emerging Technologies in Pharmaceutical Industry: The Case of Gene Therapy & Monoclonal Antibodies
Joint-research with Thomas Klueter (Wharton PhD)
Rahul Kapoor, Thomas Klueter, James M. Wilson (2017), “Challenges in the Gene Therapy Commercial Ecosystem,” Nature Biotechnology, 35(9): 813-815.
Rahul Kapoor and Thomas Klueter (2017), “Organizing for New Technologies,” MIT Sloan Management Review, 58(2): 85-86.
Rahul Kapoor and Thomas Klueter (2015), “Decoding the Adaptability-Rigidity Puzzle: Evidence from Pharmaceutical Incumbents’ Pursuit of Gene Therapy and Monoclonal Antibodies,” Academy of Management Journal, 58(4): 1180-1207.
Rahul Kapoor, Emerging Technologies
Two Technologies Emerging at the Same Time
Funding Activity Development Activity
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Gene TherapyMonoclonal Antibodies
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Rahul Kapoor, Emerging Technologies
Fit with Assets & Capabilities
(Chemical-based)
Fit with Business Model(Prescription-based)
No Yes
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Yes
Gene Therapy (GT)
Monoclonal Antibodies (mAbs)
Impact on Pharmaceutical Incumbents
Rahul Kapoor, Emerging Technologies
Established Firms Pursued mAbs and GT via Four Different Modes
Start-up/ University
Corporate Office
Acquired Start-up
In-house R&D Sales Mfg.
Contract Alliance
Each mode represents a unique combination of:• Who does the research (invention)• Who is involved in the decision for subsequent commercialization
(innovation)
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Rahul Kapoor, Emerging Technologies
Organizing for Emerging TechnologiesOrganizational Mode
Locus of Invention Locus of Innovation
In-house Research
Established Firm Established Firm
Contract Research
Startup/Research Organization
Established Firm
Alliance Established Firm-Startup Partnership
Established Firm-Startup Partnership
Acquisitions Start-up Startup (Structural Autonomy) or Established Firm (Structural Integration)
Rahul Kapoor, Emerging Technologies
In-house and Contract Research
Development and Commercialization
ResearchInvestment
Organizational Inertia
Gene Therapy
“Compared to mAbs…gene therapy is driven by personal health and niche applications…for a small set of patients, you will command a very high price…the business case [for GT] is hard to establish.”
While mAbs have been validated by Wall Street, understanding the business case for Gene Therapy has been something that’s been a moving target. And I admit the marketplace does not exactly know what it needs"
Development and Commercialization
ResearchInvestmentmAbs
Rahul Kapoor, Emerging Technologies
Overcoming Inertia through Strategic Alliances and Acquisitions
Rahul Kapoor, Emerging Technologies
Reason - structural separation between management of existing business and pursuit of emerging technologies, and involving “outsiders” in decision-making
Partnering with or acquiring start-ups (as autonomous units) was more likely to result in downstream commercialization than in-house and contract research
Emerging Technologies in Semiconductor Industry: The Case of Lithography Generations
Joint-research with Ron Adner (Dartmouth College)
Ron Adner and Rahul Kapoor (2016), “Right Tech, Wrong Time: How to Make Sure That Your Ecosystem is Ready for the Newest Technologies,” Harvard Business Review, November: 60-67.
Ron Adner and Rahul Kapoor (2016), “Innovation Ecosystems and the Pace of Substitution: Re-examining Technology S-curves,” Strategic Management Journal, 37(4): 625-648.
Rahul Kapoor, Emerging Technologies
Lithography Generations
1962Contact Printer7μmPrice approx $15k
2005DUV 193 immersion0.065μmPrice approx $20m
1972 Proximity1974 Projection1976 E-beam1978 X-Ray1978 G-Line1985 I-Line1988 DUV 2481996 DUV 1931998 DUV 1572005 DUV 193i
Each new generation was commercialized at a higher performance level than the previous generation
Rahul Kapoor, Emerging Technologies
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DUV 193 DUV 193 immersion
Fast Substitution by New Generation
Rahul Kapoor, Emerging Technologies
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G-Line I-Line
Slow Substitution by New Generation
Rahul Kapoor, Emerging Technologies
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No Substitution by New Generation
Rahul Kapoor, Emerging Technologies
Technology Generation Introduction Years To Market
DominanceProximity 1972 2
Projection 1973 2
E-beam 1976 Never
G-Line 1978 5
X-ray 1978 Never
I-Line 1985 7
DUV 248nm 1988 11
DUV 193nm 1996 11
DUV 157nm 1998 Never
DUV 193nm immersion 2005 4
Pace of Substitution
Rahul Kapoor, Emerging Technologies
Explaining Substitution: Old & New Tech. Ecosystems
Lens(e.g., Zeiss)
Energy Source(e.g., Cymer)
Resist(e.g., Shipley)
LithographyTool (e.g., ASML)
SemiconductorManufacturer (e.g. Intel)
Mask(e.g., Photronics)
Rahul Kapoor, Emerging Technologies
DUV 193 Immersion:Low Ecosystem Emergence Challenge
Lens(e.g., Zeiss,Nikon)
Energy Source(e.g., Cymer)
Resist(e.g., Dupont)
LithographyTool (e.g., ASML)
SemiconductorManufacturer (e.g. Intel)
Mask(e.g., Photronics)
Rahul Kapoor, Emerging Technologies
Lens(e.g., Zeiss,Nikon)
Energy Source(e.g., Cymer)
Resist(e.g., Dupont)
LithographyTool (e.g., ASML)
SemiconductorManufacturer (e.g. Intel)
Mask(e.g., Photronics)
DUV 248:High Ecosystem Emergence Challenge
Rahul Kapoor, Emerging Technologies
DUV 193:Low Ecosystem Extension Opportunity
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DUV193 DUV193 immersion
Extension
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I-line:High Ecosystem Extension Opportunity
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Rahul Kapoor, Emerging Technologies
Framework for Pace of Technology Substitution:Balance of Ecosystem Extension and Ecosystem Emergence
Ron Adner and Rahul Kapoor (2016), “Right Tech, Wrong Time: How to Make Sure That Your Ecosystem is Ready for the Newest Technologies,” Harvard Business Review, November: 60-67.
Rahul Kapoor, Emerging Technologies
Managing Emerging Technologies
Mitigating Organizational Inertia Around Business Models- Organizational design
- Incentive structure
Considering Ecosystem Interdependencies- Bottlenecks in new technologies
- Extensions in old technologies
Rahul Kapoor, Emerging Technologies
Bedtime Readings!• Right Tech, Wrong Time: How to Make Sure Your Ecosystem is
Ready for the Newest Technologies," Harvard Business Review, 2016, 94(11): 60-67
• Organizing for New Technologies, MIT Sloan Management Review, 2017, 58(2): 85-86
• Challenges in the Gene Therapy Commercial Ecosystem, Nature Biotechnology, 2017, 35(9): 813-815.
• Capabilities, Technologies, and Firm Survival during Industry Shakeout: Evidence from the Global Solar Photovoltaic Industry, Strategic Management Journal, 2017.
• Value Creation in Innovation Ecosystems: How the Structure of Technological Interdependence Affects Firm Performance in New Technology Generations,” Strategic Management Journal, 2010, 31(3): 306-333.
Thank You!