The Art and Craft of Building Successful Technology Programs

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The Art and Craft of Building Successful
Technology Programs

• World Bank Institute
• December 10, 2003

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Learning, Doing Competing
Elements Innovation Doing Yourself Bringing in Incentives
People Training Outside adv Education,T
Machinery Reverse Engineering Import Tax, loans
New Knowledge RD License Tax, risk loans.
Problem Solving Get help Enc compet
Ideas Brainstorming, RD, Seminars, Tinkering, solving Cust,supplier,literature, Institutions, education
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Use of Public TIs by Firm-size and in-house
lab/department
of responding firms which had used TI at least
once
National, regional or local technology
institutes, industry association
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Use of TI Services by Firm Size( Data excludes
Taiwan (China))
of firms using a TI at least once
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Importance of TI Services by Sector
Importance (1 to 5) of Services
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TECHNOLOGY SOURCING BY SECTORUniversities and
Technical Colleges
Sector
Percentage
5 Countries- China, Canada, India, Japan, and
Korea Total Observations
1049
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Can TIs be restructured or reformed?

• Yes, if
• Reform is not partial
• There is clear vision
• There is leadership and competent staff
• Reform is aimed to meet industrys demand
• The various parts of the reform fit sensibly
  together

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Motivations for Reform

• Money Talks--budget cuts or new market
  opportunity
• Government Policy Change
• Complaints from Clients
• A Farsighted Leader
• Product or Technology Outdated-- Japanese
  silverware

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ITRI--Taiwan

• Before 1982
• Totally government
• funded
• Isolated from industry
• Many unfocused projects
• Inefficient

• From 1982
• Leadership
• High quality staff
• Contract RD with industry--50
• Contractual strategic funding by govt
• Spin-offs

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The Chinese Way

• Over-staffed, under-performing RIs--1980s
• RIs dependent entirely on Government
• Budget cut sharply and suddenly--1990
• Each RI left to decide how to adjust

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How Chinese RIS Responded

• Some restructured, reoriented succeeded
• Some disbanded
• Some became production organizations/cos
• Some became consulting organizations
• Some have become models and won back resources
  from Government savings

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Indian RIs before Reform

• Many good scientists
• Many well-equipped
• Some good basic research
• Phd theses training
• A few spin-offs

• _
• Many small useless projects
• Recreating the wheel
• Protectionist lobby
• Antagonism- industry
• Low impact- industry
• Costs gt Benefits

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India--Abid Hussein Commission Recommendations--
1986

• RIs must benefit industry and the economy
• RIs must increase contract revenues on average to
  33 by by 1992, 40.
• RIs can retain all earned income--Govt took most
  before
• RIs could determine price of their own services
• Share of consulting and RD revenue to be paid to
  staff working on those projects

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Reform Process-- First Phase

• Commitment at top
• Select institutes with leadership and capability
• Challenge with business plan
• Incentive-- loan (interest free)
• No other way to increase budget
• Objectives of economy, industry, RI and
  researchers coincide

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First Level Response
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Importance of Demand

• Need industrial critical mass
• Need competition-- India opened up, so local
  companies needed help
• Demand-side incentives to industry-- the SPREAD
  Program

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Prerequisites for Reform

• Industry must be motivated to compete
• Industry must be convinced that RIs capability to
  carry out useful activities
• RIs must see that industry wants its service
• RIs need to be motivated to serve industry--they
  must require the funding, researchers should be
  rewarded for good service to industry...

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Lessons

• Reform worked
• Only in Institutes with competent high quality
  staff
• In different sectors in different ways
• Only where there was good leadership

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Consolidation Phase

• Cost accounting
• Project management
• Laboratory safety
• Distribution of financial incentives based on
  achievements
• Leader of successful lab made Director of 41 Labs
• Awards and rewards made for practical achievers

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Korea Technology Development Corp

• Sensible approach to encourage RD in industry
  and growth of small firms
• Clever Financial incentives, fund raising
• Gradual success led to hubris
• weak supn and finacially driven
• Bank ideology of privatization
• Too risk averse until privatization

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Turkey--TTGV

• Need Promotion Agency--not in Govt
• ITD Experience in private firms limited
• Trained personnel scarce
• Years of learning
• Toughness, patience and support from Bank

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Support for Small Scale IndustryQuestions to be
Addressed

• Institutional quality in country
• Level of trust by industry in Govt and other
  firms
• Can institutions attract and keep good people
• Extent of corruption
• How to ensure that funding achieves its
  purpose--eg consultants will not raise fees.

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Question-2 SSI

• How to pay for intermediary?
• Overhead charge like Steinbeis
• Industry Association--India for quality for
  members
• Government
• How to motivate SSI to use services--wont unless
  dynamic or forced by market
• Must find way of attracting good consultants
• Institutions must be free of Government
  interference

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MODEL VSystem to provide range of specific and
generic expertise

• Small Extension
  in educational
• Companies Organization institutions
  US

SSI 1
Tech. Center 1
SSI 2
Tech. Center 2
SSI 3
Tech. Center 3
SSI 4
Tech. Center 4
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MODEL VIFacilitating particularTechnology
Transfer Training

• Companies Training Small
  Industrial Provider
• Program Ass. Program

T1
TQM Consulting
T2
ISO 9000 Training provider
T3
T4
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MODEL VIIJapanese Business Association
Company 1
transfer
transfer
Temporary Institution Business Association
Company 2
Foreign Technology Provider
Tech.
transfer
Transfer
Company 3
Company 4
transfer
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Successful TIs

• Identify their markets and clients.
• Are culturally service oriented. Have various
  ways, formal and informal, for interacting with
  current and potential clients to serve and
  determine their need.
• Manage and provide incentives, that take account
  of clients needs, both todays and tomorrows.
• Ensure that the quality of people and service
  match market demand.

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Successful TIs(continued)

• Build feedback mechanisms with clients (e.g.
  revenue generation criteria) and technical
  community (for example, advisory panels for
  long-term involvement) which ensure that goals
  are being met.
• Give due importance to the confidentiality of
  clients.
• Have various approaches to building new
  capabilities and learning from others.

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Government Role

• Motivate the formation of TIs.
• Ensure that the structure avoids bureaucratic
  management of them--TIs need autonomy and
  flexibility.
• Stimulate industrys demand for using TIs.
• Provide limited support to TIs for carrying out
  more strategic work.
• Develop specialized institution for SMEs.
• Encourage SMEs to demand service.

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Examples of Success

• India VC and TI Reform
• KTDC Establishment and 1980s
• ITRI Restructuring--Taiwan
• BIRD and PACT Programs
• 7 SSI extension/tech diffusion program--including
  Indonesia and Philippines
• Turkey RD in industry

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Some Key Messages

• Technology improvement occurs in a variety of
  ways through many channels
• Requires the right people
• Requires continuity and intensive hand-holding
  and nurturing
• Find the right channels and champions
• Build in flexibility, so you can change course to
  achieve objectives when an unexpected event
  occurs
• Build in adequate training and TA
  resources--cheap if possible.