TECHNOLOGY MANAGEMENT

Module IV

Management of R&D and Innovation

Introduction to R&D
• Research and development refers to the
process of creating new knowledge,products,
and services through systematic and
innovative activities.
• It plays crucial role in driving innovation and
progress in various industries.

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Corporate research
• It is the research and development effort
conducted by companies to develop new
products ,services,or technologies that can
provide value to customers ,increase
competitiveness and drive economic growth.
• Focused on solving specific business problems
or exploring new opportunities.

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Product life cycle in research
• The product life cycle is a model used to
describe the stages a product goes through,
from its conception to its eventual decline in
the market.
• Stages,
1.Ideation:
• Researchers identify a problem or opportunity
and come up with an idea for a new product
or service.

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2.Planning and preparation:
-defining the scope of research, identifying
research objectives, determining methods to
conduct the research.

3.Conducting research:
-collecting data,conducting experiments,
analysing results.

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4.Disseminating the results:
Results of the research are communicated to the
stakeholders.
5.Commercialisation:
Research results are used to create new products
or services that can provide value to customers.
6.Maturity and decline:
Product or services created through research
project , reach maturity and eventually decline in
market.
- Declining sales and reduced demand for product
and services.

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Production costs and R&D
Production Costs
Expenses incurred by a company in producing
a product or providing a service.
Types of production costs
1.Direct material costs:
Cost of raw materials or components required
to produce a product.

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2.Direct labor costs:
Wages and salaries paid to workers who produce
the product.
3.Manufacturing overhead costs:
Indirect costs associated with producing a product
, such as rent ,utilities ,insurance and property
taxes.
4.Variable costs:
Varaible costs are costs that vary over time. They
are based on business operations – external &
internal factors.Costs that change with level of
production such as raw materials,delivery
costs,packaging, labor.

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5.Fixed costs :
Costs that remain constant regardless of the level
of production,such as rent and insurance.
6. Operating costs:
It refers to all costs associated with running a
business , including both direct and indirect costs.
7.Sunk costs:
It refers to the money that has already been spent
and cannot be recovered.A manufacturing firm ,
for example may have a number of sunk costs
such as the costs of machinery, equipment etc.

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Relation between production costs
and R&D
1. R&D as a production cost:
R&D expenses are typically considered as a
production cost, as they are incurred as a
part of the process of creating new products
or improving existing ones.R&D costs can be
either fixed or variable depending on the
nature of the research project and the
methods used to conduct the research.

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2.Impact on production costs:
R&D can have significant impact on
production costs, as it can lead to new or
improved products that are more efficient to
produce , require less raw materials , or
require fewer workers to produce. This can
result in lower production costs and higher
profits.

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3: Balancing R&D and production costs:
- To remain competitive R&D is essential for an
organisation. So companies must balance their
investment in R&D with costs associated with
producing their products.
4:Long term benefits:
-Improved efficiency,lower production costs.

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Translation of R&D efforts to
Technology
• It refers to the process by which R&D results in
the creation or improvement of new or
existing technologies.
• Taking the results of R&D activities and
transforming them into tangible
products,processes or systems that can be
commercialised and used to meet the needs
of consumers.

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1.Product development:
R&D efforts result in development of new
products.

2.Process development:
-improving existing processes such as
manufacturing,distribution or customer
service.

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3.Technological innovation:
-creation of new technologies.
Example: AI,Blockchain,IoT

4.Market adoption:
- Success depends on willingness of consumers to
adopt the technology.
- Technology should be easy to use ,reliable , and
should meet the needs of its intended audience.

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INNOVATION
• It refers to the creation and implementation of
new ideas ,processes , products ,or services
that lead to significant improvement in the
way things are done.
• crucial factor in driving economic growth and
competitiveness
• It creates new markets and value for
businesses ,governments and society as a
whole.

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Main two types;
Incremental innovation:
It involves small improvements to existing
products,processes or services.

Radical innovation:
Creation of entirely new products,processes
or services that disrupt the existing market.

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Types of innovation
1. Product innovation
2. Process innovation
3. Business model innovation
4. Organisational innovation
5. Technological innovation
6. Social innovation

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Types of innovation
1. Product innovation:
• Development and introduction of new or
significantly improved products or services.
2.Process innovation:
• Improvement of existing processes, making
them more efficient , effective or
environmental friendly.

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3.Business model innovation:
• It refers to the creation and implementation of
new and more effective business models ,
including changes to the way products are
manufactured ,distributed or marketed .

4.Organisational innovation:
• Refers to the introduction of new organistional
structures , management processes,or corporate
cultures that enable organisations to become
more effective and efficient.

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5.Technological innovation:
• Development and implementation of new
technologies that improve existing products ,
processes or services or create entirely new ones.

6.Social innovation:
• Refers to innovations that address social
challenges and create new value for
society,including solutions to issues such as
poverty,inequality and environmental
degradation.

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Organisational characteristics that
facilitate innovation
1.Culture
2.Leadership
3.Structure
4.Resources
5.Employee engagement

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Remedy against infringement
• Remedy against infringement refer to the legal
actions that can be taken to address and
resolve a voilation of a person’s intellectual
property rights such as trademarks,copyrights
or patents.

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Common remedies for trademark
infringement include:

Injunctions: A court order that requires the

infringing party to stop using the infringing
mark.
Damages: Monetary compensation for any
financial harm caused by the infringement.
Account of profits: An order that requires the
infringing party to pay over any profits they
made from the infringing use.

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Common remedies for Copyright infringement
include :
1.Injunctions
2.Impounding & destruction of infringing
copies: An order to seize and destroy any
infringing copies of the work.
3.Statutory damages: A predetermined amount
of damages set by law , which may be
awarded without proof of actual damages.

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Common remedies for patent infringement
include:

1.Injunctions
2.Damages
3.Account of profits
4.Enhanced damages- increased damages in
case of intentional infringement.

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Role of technology transfer in new
product development

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Globalisations and innovations

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• Globalisation often driving innovations and
innovations driving globalisation.

• Globalisation has created a more

interconnected world, with easier and faster
communication and transportation,allowing
for the exchange of ideas , knowledge and
technologies between countries.This exchange
has created new opportunities for innovation.

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• Innovation, in turn has driven globalisation by
creating new products,services and
technologies that have made it easier and
more efficient to communicate ,trade and
travel.
• For example , the development of the internet
and other digital technologies has enabled
businesses to operate on a global
scale,connecting people and organisations
from around the world.

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Case studies on management of R&D
Case Study 1 : INTEL CORPORATION
• Multinational technology company that is
known for its innovative products and strong
R&D focus.
• One of the key components of Intel’s R&D
strategy is its focus on long term research and
development.
• Invests in projects that may take several years
to bring to market.

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• Example: Intel has been a leader in the
development of microprocessors and has
invested heavily in the development of new
manufacturing technologies.
• It has established partnerships with
universities and research institutions

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Case Study2: pharmaceutical company Pfizer

• Pfizer is a multinational pharmaceutical company

known for its innovative products and strong R & D
focus.
• Pfizer has a robust clinical trial process that enables it
to bring new drugs to market quickly and effectively.
• Another key component of Pfizer’s R&D strategy is its
focus on collaboration and cross functional teams.
• Ensures that new drugs are developed with the
needs of patients in mind.

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Case study 3 : APPLE Inc.
• Key component of APPLE’s R&D strategy is its focus
on design and user experience.
• Company places a strong emphasis on the
aesthetics and the usability of its products,which
has helped it to develop a strong brand and a loyal
customer base.
• Focus on secrecy and confidentiality, which helps to
keep its R&D projects and innovations under
wraps until they are ready to be released to the
public.

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Case Studies on innovation
Case study 1: Tesla motors founded in 2003 , is
a company that designs ,develops and sells
electric vehicles , energy storage systems and
solar panels.
Company’s mission is to accelerate the transition
to sustainable energy and it has disrupted the
automotive industry with its innovative electric
vehicles.

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• Tesla’s electric vehicles including the Model S,
Model X , and Model 3 offer a unique driving
experience , impressive performance and
advanced technology.
• Use of over the air software updates allow for
continuous improvements to the vehicles
performance and functionality.

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Case study 2 : Amazon
Case study 3 : Netflix

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