EMBEDDED INNOVATION - STRATEGIC MANAGEMENT INCUBATORS FOR KNOWLEDGE HEGEMONY

South African Journal of Industrial Engineering, May 2008 by Khota, I A, Pretorius, L

ABSTRACT

Global competitiveness and category leadership is the strategic challenge for South African innovators over the next decade. Within the context of engineering management, this research identifies the strategic drivers and corporate positioning necessary to meet this challenge and to create a vibrant manufacturing and innovation landscape leading to wealth for South African stakeholders. Focusing on the product life-cycle, the research identifies 'incubators of competitive advantage' within the areas of context-management, resource-management, and opportunity-management. The aim is to establish an organisational paradigm relating to the creation of intellectual capital and to knowledge management within these arenas, as sources of innovation and competitive advantage.

OPSOMMING

W�reldwye kompetisie asook produkleierskap is strategiese uitdagings wat Suid- Afrikaanse innoveerders in die volgende dekade gaan aanspoor. Hierdie navorsing identifiseer strategiese drywers en korporatiewe posisionering wat nodig is in die konteks van ingenieursbestuur om van hierdie uitdagings aan te spreek. Sodoende word 'n aktiewe vervaardigings- en innovasielandskap wat kan lei tot welvaartskepping vir Suid-Afrikaanse belanghebbendes bevorder. Deur te fokus op die produklewensiklus word 'omgewings van kompeterende voordeel' binne in konteks-, hulpbron- en geleentheidsbestuur ge�dentifiseer. Die doel is om 'n organisasiekultuur te skep wat deurentyd intellektuele eiendom en kennisbestuur as bronne van innovasie en kompeterende voordeel vooropstel.

1. INTRODUCTION

In a context where global economic growth is driven by the emergence of new markets, competitiveness depends on the management of multiple competencies in order to exploit resource and knowledge capital, together with the management ability to adapt better and faster than the competition to the dynamic and complex competitive landscape [18].

In the new business environment that is emerging where competencies in speed-tomarket and market intelligence are considered prerequisites for market leadership [1][9], the increasingly swift pace of change and the volatile competitor landscape threaten the success of ill-prepared organisations. This is particularly relevant in the dual-market scenario of physical and virtual markets [42][14].

In this environment, competitive differentiation and stakeholder value creation are driven by innovation [23], and competitive advantage is driven by a corporate competency and culture that espouses creative thinking [9]. This context, which is characterised by increasingly more complex products and services [14], requires design teams that are empowered with differentiated resources, where knowledge creation and retention promote sustainable organisational leadership [35].

Product development now requires a management obsession to ensure that all product development assets are efficiently utilised to target selected consumer markets [1]. This encompasses product design, manufacturing, intellectual property capitalisation, marketing capabilities, and strategic attitude, which serve as factors for differentiation by team rather than product [23][9].

Ultimately, product and service leadership will be achieved by those companies that are able to monitor and respond appropriately to the market input factors/demands that determine how customers can be acquired and retained efficiently [6][17][40][14][44]. The companies that succeed here are the ones that develop and implement a sector strategy, that have detailed knowledge of the strengths and weaknesses of the firm and inter-firm institutions within that sector. They typically understand the challenges and opportunities that the participants face, coupled with a collective vision that embraces these problems [3].

This paper proposes a management paradigm that focuses management attention across and within the product life cycle to promote the establishment of competitive advantages in product development, and that aligns business strategy inter alia with South African government policy, which supports infrastructure and systems that promote innovation [34].

2. THEORETICAL HYPOTHESES

This study is currently exploratory in nature [50], making use of secondary data mainly in the form of published literature to underpin the theoretical framework and hypotheses. This is supplemented by the authors' qualitative inductive reasoning to formulate the eventual framework. This is again in line with a methodology suggested by Cooper et al [50].

In seeking to identify management best-practice in this ever changing context of increasing competitiveness and complexity, our literature findings indicate that a multi-dimensional management approach is necessary, where management attention must focus across and within the product life cycle. The literature findings suggest that management should focus on three distinct strategy-influencing arenas (see Table 1), the so-called 'incubators of competitive advantage' (i.e. the management activities and organisational stances that promote and lead to the development of advantageous positions relative to competitors). These arenas encompass proven technology, performance, and process management activities as promoted by Six Sigma and Toyota and Chrysler's Keiretsu models (focusing on quality, trust, knowledge exchange, dedication of assets, segmentation of suppliers, branding, alliances) [15][29][16].