AP/ADMS 4940Technology Management
Session 1
Today’s Agenda
Administrative issues
Course outline review
Course expectation
Overview of technological innovation
Administrative Issues
Contact Info:You-Ta Chuang, [email protected]
Office: RM233, Atkinson Building
Course materials:All materials are available on e-Resources
Cases can be purchased through Ivey School of Business
Course Outline Review
Learning Objectives
To develop an awareness of the range, scope, and complexity of the phenomena, issues, and problems related to managing technological change.
To develop understanding of "state of the art" concepts for managing technological change and the relationship between technological change and strategy.
To develop a conceptual framework for assessing and auditing the technological capabilities
EvaluationMidterm exam 30%
Oct 22, in class, close bookCoverage – readings from Sessions 1-6, excluding cases
Final exam 20%Date: TBACoverage – readings from Session 8 – 11, including group projects; excluding cases
Participation 15%Your performance relative to class average; York’s 9-point scale
Group work 35%
Group work
Session summary (5%)
Lead discussion (5%)
Group project (25%)Three progress reports (5%)
Group presentation (20%)
OverviewTechnology:
This refers to the theoretical and practical knowledge, skills and artifacts that can be used to develop products and services as well as their production and delivery systems.
Technology can be embodied in people, materials, cognitive and physical processes, plant, equipment and tools
Technological Innovation:
This can be technology-based or facilitated by technology. We define successful technological innovation as that which returns the original investment plus some additional returns
Technological innovation is now the single most important driver of competitive success in many industries
Many firms earn over one-third of sales on products developed within last five yearsProduct innovations help firms protect margins by offering new, differentiated features.Process innovations help make manufacturing more efficient.
BUT…..
Technological innovation can lead to
Shorter product lifecycles (more rapid product obsolescence)More rapid new product introductionsGreater market segmentation
And…return on investment???
Biopharmaceutical Companies’ Investment in R&D
Total Biopharmaceutical Company R&D and PhRMA Member R&D: 1995–20091
Sources: 1Burrill & Company, analysis for PhRMA, 2005–2010 (Includes PhRMA research associates and nonmembers) in PhRMA, “Profile 2010, Pharmaceutical Industry;” PhRMA, “PhRMA Annual Membership Survey,” 1996-2010; 2CBO, Research and Development in the Pharmaceutical Industry, 2006.
The pharmaceutical industry is one of the most research-intensive industries in the United States. Pharmaceutical firms invest as much as five times more in research and development, relative to their sales, than the average U.S. manufacturing firm.2
— Congressional Budget Office
““
Sources: 1J. DiMasi and H. Grabowski, "The Cost of Biopharmaceutical R&D: Is Biotech Different?," Managerial and Decision Economics, 2007; J. DiMasi et al., “The Price of Innovation: New Estimates of Drug Development Costs,” Journal of Health Economics, 2003.
The Cost of Developing a New Drug Has Greatly Increased
Cost to Develop One New Drug1
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Source: 1Tufts Center for the Study of Drug Development, “New drugs entering clinical testing in top 10 firms jumped 52% in 2003-05,” Impact Report, 2006.
Probability of Success for Investigational Drugs Is Small
Approximately 20% of self-originated new drugs that enter clinical testing will
receive U.S. marketing approval.1Clinical Approval Success Rates by Therapeutic Class1
Roadmap of topics
What is innovation
Source of innovation/Types of innovation
How to measure innovation performance
Strategy and competition
Choosing innovation projects
Collaboration strategies
How to protect innovation
Organizing for innovation
What’s on next weekTopics: Nature and Importance of Innovation; Sources of Innovation
Readings:
The Council of Canadian Academies, 2009. Innovation and Business Strategy: Why Canada Falls Short: Chapter 2
Birkinshaw, J., Bouquet, C., & Barsoux, J. (2011). The 5 myths of innovation. MIT Sloan Management Review, 52(2), 43-50.
Davenport, T. H., Prusak, L., & Wilson, H. J. (2003), Who's bringing you hot ideas and how are you responding? Harvard Business Review, 81(2), 58-64