|
We see an increasing number of
news articles on patents and intellectual
properties these days. The following are
some examples.
No doubt many saw the lead front-page
article in the Nihon Keizai Shimbun's
January 14 evening edition announcing
that the cumulative total of international
patent applications went over the one
million mark at the end of 2004. It took 22
years to reach the 500,000th application in
2000, however it required a scant four
years for the number to double itself.
A second interesting example can be
found in a survey conducted by the
Ministry of Economy, Trade and Industry.
According to the survey, more and more
listed companies are willing to publicize
their "Intellectual Property Reports," containing proprietary patent right
information, together with their annual
report, and the number is expected to reach
100 or 44% of all listed companies. In fact,
eleven companies including Asahi Kasei,
Olympus, and Hitachi made this
information public last year.
A third item was the revision of Japan-
US Tax Treaty in May 2004, marking the
treaty's first revision in more than 30
years. A key element of the new code was
the abolishment of the 10% taxation of
patent and other intellectual property right
royalties. The revision clearly had its basis
on the calculation that intellectual property
rights will become important national
resources in both nations, and thus the
revision lends tax advantages to each
countries' quest for international
predominance.
Fourth comes NEC's interesting attempt
to create new business through an
extensive, external disclosure and
distribution of the intellectual assets that
derive from its proprietary technologies.
As part of this move, NEC established its
Innovation Sohatsu Kobo (Innovation
Emergent Atelier), a community based on
open membership. Through this and other
initiatives, NEC hopes to generate 50
billion yen in revenue from intellectual
assets this year.
In such an environment, what is
required to generate new types of
economic punch? What is the best way to
correctly evaluate the value of
technologies that are becoming more like
liquid assets? Companies and society are
both beginning to seriously question how
they can best master the art of technical
appraisal and its sister skill of defining a
technology's ongoing business potential.
|
|
As economies and societies quickly
globalize and technical innovation
accelerates, corporate R&D practices are
veering away from traditional in-house
principles. In the past, particularly at
companies with long histories, it was taken
for granted that the entire process from
R&D to business development would be
conducted entirely in-house. Companies
preferred such a process as it prevented
leak of new technologies and afforded the
convenience of complete control over
management decisions related to new
businesses.
That was then. Today the winning
strategy in the new business game is,
above all else, speed. Today, company
tries to obtain necessary technologies from
outside to fill immediate needs, rather than
spending longer time to develop them inhouse.
It is an act to "buy speed" from
outside.
Another driving factor not to be
overlooked is the increasingly advanced,
ubiquitous nature of information
technologies that has driven down
transaction costs, and made purchasing
technologies substantially cheaper than inhouse
development organizing costs.
All this shows the accelerating tendency
of companies to actively and effectively
incorporate external resources. Modern
Japan is founded upon intellectual
property. As this idea gains traction, it is
driving a fluidization of intellectual
property rights, and consequently, adding
fresh impetus to the fluidization of
technology in general.
In such a period of technological flux,
what really needed is a good eye for
technologies, a connoisseur for judging the
business potentials around those
technologies. Consequently, this "good
eye" is becoming vital for companies, as
executive officers face the pressure of
judging. To what extent in-house R&D
focus should be narrowed; to what degree
external technologies should be adopted;
how budgets should be allocated; how to
promote feasibility studies on new
businesses with such integrated
technologies; or is M&A better yet? These
are real-world issues and companies are
being forced to deal with such judgement
calls, thus requiring top executives and
managers to acquire relevant viewpoints
and skills.
Let's look at some real-life problems in
the workplace where such technical
judgements are done and in the meeting
rooms where new businesses are planned.
Imagine a case in which a new technologybased
business is being proposed. A
potentially dominating core science exists,
but its success as a business can only be
realized after the science has been
transformed into a commercial technology
and deployed in an industrial setting.
As the science is developed into a
working technology and launched
commercially, the group of participating
players diversifies, and this is where the
problems begin. When it is just a science,
the work revolves mostly around a small
group of scientists and researchers who see
each other on a daily basis. Since their
focus is on basic research, their work tends
to be conducted in a static environment
dedicated to a single theme over longer
periods of time. However, as the science
transforms into a viable technology and
being commercialized, the group becomes
heterogeneous. Daily meetings
increasingly take on a monetary angle and
involve budgets, business plans, and other
such agendas. It inevitably leads to
discussion not directly related to the core
technology. This is what happens when
"aliens" come into the picture; finance
guys, accountants, management, investors,
and lawyers, with whom engineers rarely
come across in their routines.
In many cases, how they behave at this
stage determines the fate of a new
business. In other words, the primary
challenge becomes how much
understanding these heterogeneous
members can show for each other's
positions. If a scientist, who represents the
seed from which the new business has
sprung, forces too much emphasis on his
research sphere, it is likely that success
will fade away irrespective of the
excellence of the core technology. On the
other hand, if the naked technology just
removed from its incubator is put to strict
budget management, its growth will be
stunted. Therefore, developing a process in
which different values are blended, while
respecting expertise of each other,
becomes important. When each value is
suppressed, it will become impossible to
create a product that can win the
competition. It is important to foster a
spirit of mutual concession that recognizes
the group's heterogenic nature and
promotes agreement. This is not to be
confused with compromise. Rather, it is a
process of understanding and fusing with
others to achieve a higher goal, namely the
transformation of a technology into a
successful business. It can also be viewed
as an organizational process for
developing new businesses around
technological nuclei. As this example
shows, it is essential when developing a
new business that communication gaps are
filled and problems inherent in the
constituency of the development group
overcome.
It is said that people with liberal art
backgrounds tend to shut their ears the
moment they hear the word "technology,"
and view everything in the realm as a
black box. The science-oriented, on the
other hand, find it unbearable when
administrative managers join a project
midway and keep asking futile questions
with bossy air. The feeling eventually
transforms into a lump of suspicion, "Do
they really understand the value of this
technology?" Naturally, it is the leader's
role to change such conflicting values into
the productive relationship that one should
expect. Thus the presence of reliable
leaders backed by broad outlooks and rich
experience becomes paramount. Such
leaders of new businesses must also take to
challenges by nature and embrace risk.
Nothing helps to bind members with
disparate values to a higher goal more than
a leader who personally takes on daring
challenges and demonstrates composure in
risk-taking.
|
JMA hosted the Industrial Innovation
2005 in Yokohama on February 23-25.
This annual conference is recognized as
Japan's largest production-related
conference and attracts management
executives, department and section
managers, and general staff involved in
production activities such as development,
design, production, manufacturing, and
distribution. This year's conference
followed the twofold theme of "Innovation
in Japanese Manufacturing" and
"Reevaluating Production Techniques and
Skills." In total, some 3,400 people
attended.
The PDF version of this page