TRANSFORMING A COMMUNITY TRANSFORMING A COMMUNITY TOWARD A KNOWLEDGE SOCIETYTOWARD A KNOWLEDGE SOCIETY

THE WINDS OF CHANGETHE WINDS OF CHANGE

DR. KIP BECKERDR. KIP BECKER

BOSTON UNIVERSITYBOSTON UNIVERSITY

KBECKER@BU.EDUKBECKER@BU.EDU

GOGLOBAL@BU.EDUGOGLOBAL@BU.EDU

WHAT IS KNOWLEDGE BASED?WHAT IS KNOWLEDGE BASED?

• WHAT DOES IT MEAN TO BE “SMART”WHAT DOES IT MEAN TO BE “SMART”– HOW TO GET THINGS DONE– WHERE THINGS ARE– SITUATION OPPORTUNITIES AND SOLUTIONS– CONSUMER ORIENTED

– NEXT GENERATION “WANTSGOAL:A NATION OF “SMART” PEOPLE WITH “ATTITUDE”

•WHAT IT IS NOT:WHAT IT IS NOT:•ABOUT THE TECHNOLOGY / INFORMATIONABOUT THE TECHNOLOGY / INFORMATION•QUEST FOR MAGICAL A SOLUTION OR BEING QUEST FOR MAGICAL A SOLUTION OR BEING A “WORLD CENTER”A “WORLD CENTER”

SMARTSMART

RESOURCE RICH AFRICAINDONESIA OIL SURINAM BAXITE

LEARNING TO MANAGE INFORMATIONLEARNING TO MANAGE INFORMATIONTO CREATE VALUETO CREATE VALUE

VALUE ADDED SOLUTIONS Columba - Seattle Washington

India- Dominican Republic call centers

INTERNATIONAL COMPETITIONINTERNATIONAL COMPETITION

NO FIRM OR GOVERNMENT NO FIRM OR GOVERNMENT NO MATTER HOW LARGE OR STRONG IS SAFENO MATTER HOW LARGE OR STRONG IS SAFE

1.1.““BIG STALE GUYS” NO LONGER RULEBIG STALE GUYS” NO LONGER RULE

2.2. MUST DRIVE OUT OLD ATTITUDES MUST DRIVE OUT OLD ATTITUDES MARCU “CMARCU “C KomatsuKomatsu

3.3. KNOWLEDGE AND “SMART” RULE KNOWLEDGE AND “SMART” RULE

OLD RULES ARE OUTOLD RULES ARE OUT

BUSINESS HAS REACHED END OF INCREMENTALISM

CATCHING UP NOT THESAME AS GETTING AHEAD

Strategy NEEDS TO BE CREATED FOR

THE FUTURENOT FOR THE PRESENT

FORWARD

THE WAY THE WORLD THINKS IS CHANGING

MASS PRODUCTIONMASS PRODUCTIONEngineering ModelEngineering Model Make it Store Inventory To Sell From

Early Information ImportanceEarly Information Importance

LEAN JAPANESE MODELLEAN JAPANESE MODELJust In Time (JIT), TQM, 6 SIGMAJust In Time (JIT), TQM, 6 SIGMA

Match Production & Inventory / Sales

Then Came 70s

Today’s Competition

INFORMATION AGE MODELINFORMATION AGE MODEL

EMOTIONAL TECHNOLOGY AND CULTURAL INNOVATIONConsumer Information Produce

BETTER, FASTER, CHEAPER then

Emotional Technology

Production

Cultural Innovation

DESIGN STYLE

PR

OD

UC

T D

ES

IGN

AD

D -

VA

LU

E

OBM

ODM

OEM

Emotional Technology “Buy me because through incorporating technology I am better on some powerful but specific functional criteria such as lower price or lower weight” (as seen in the netbook’s list of features); iphone apps

Cultural Innovation “Buy me because through better marketing awareness of customer needs I am able to make you feel special in some important non specific non functional way such as the elegance and lack of clutter associated with the Apple Computer brand, the beauty of the Asus netbook’s exterior finish or integrated ease of use, or the playfulness of some Asian cell phone packaging”.

VALUE ORIENTATION

PRODUCTION ORIENTATION

THOSE “NON KNOWLEDGE”THOSE “NON KNOWLEDGE”ADVANTAGES CAN BE TRANSITORYADVANTAGES CAN BE TRANSITORY

HISTORY OR RUBBER Manaus 1890-1920

•MORANO GLASS

PLANS FOR THE FACTORIES OF LOWEL STOLEN FROM ENGLAND

POLAROID -KODAK

FUJI

COMPETITIVE ADVANTAGESCOMPETITIVE ADVANTAGES

OLD ADVANTAGESOLD ADVANTAGES• Low cost labor/

Labor relationships • Favorable debt

financing• Domestic subsidies• Protected home

markets• Superior tax systems

NEW ADVANTAGESNEW ADVANTAGES•“Smart” Society•Consumer aware•Responsive Infrastructures•Education•Enthusiastic to Change and Quick to market•Technology & Innovation Driven• Competition based on “Knowledge” Advantages

SUBJECT TO:SHIFTS IN CONSUMER DEMAND

LACK OF PROTECTION OF TECHNOLOGY REPLACEMENTS OF PRODUCTS BY TECH

FRONTAL STRAGEGY CAN BE FRONTAL STRAGEGY CAN BE SUCCESSFUL WHENSUCCESSFUL WHEN

FIRM UNDERSTANDS WHAT FIRM UNDERSTANDS WHAT CONSUMER WANTS?CONSUMER WANTS?

CaterpillarCaterpillar

A A guarantee: equipment, on a desert : equipment, on a desert airport project or Arctic Circle oil airport project or Arctic Circle oil

would be fixed quicklywould be fixed quickly

11

CO

MP

ET

ITIO

N

FLANKING

Attack th

e market where th

e

competitor is

weakest

INFORMATION IN

TENSIVE

INFORMATION IN

TENSIVE 60S JAPANESE60S JAPANESECARS, COPIERS

MOTORCYCLES

2000s KOREA

2000s KOREA

Sidewinder

SMART MEANS WINNING BY FLANKING SMART MEANS WINNING BY FLANKING

12

CO

MP

ET

ITIO

N

Offering new product making theirs

unnecessary RESEARCH & CONSUMER INTENSIVE

WA

TC

HE

S

SW

ISS

to C

ITIZ

EN

S, S

IEK

O

Japan TOTO

POLAROID -K

ODAK FUJI

SMART WINNING BY TECHNOLOGY BYPASSSMART WINNING BY TECHNOLOGY BYPASS

THREE NATIONAL STORIESTHREE NATIONAL STORIES

SHANGAISHANGAI

BRAHAINBRAHAIN

DUBAIDUBAI

““It is generally much It is generally much easier to kill an easier to kill an

organization than organization than change it change it

substantially.”substantially.”-Kevin Kelly, Out of Control

The problem is not really so much how to get new, innovative thoughts into your mind, but how to get old ones out

““I THINK THERE IS A MARKET FOR I THINK THERE IS A MARKET FOR MAYBE FIVE COMPUTERS” - MAYBE FIVE COMPUTERS” - THOMAS WATSON CHAIRMAN IBM THOMAS WATSON CHAIRMAN IBM 1943 1943

“THERE IS NO REASON ANYONE THERE IS NO REASON ANYONE WOULD WANT A COMPUTER IN THEIR WOULD WANT A COMPUTER IN THEIR HOME” – KEN OLSON, PRESIDENT HOME” – KEN OLSON, PRESIDENT CHAIRMAN FOUNDER DIGITAL CHAIRMAN FOUNDER DIGITAL EQUIPMENT 1977EQUIPMENT 1977

Knowing w

hat the C

USTOMER wants

not

Knowing w

hat the C

USTOMER wants

not

just w

hat you w

ant to m

ake

just w

hat you w

ant to m

ake

INNOVATIO

N’S K

EY IN G

LOBAL STRATEGY

Technology, friend or foe?

11,000 SELLERS3,500 FLOWER TYPES5,000 BUYERS120 AUCTION GROUPS

THE DUTCH FLOWER GROWERS (DFA) AND THE DUTCH FLOWER GROWERS (DFA) AND THE TELE-FLOWER AUCTION (TFA) THE TELE-FLOWER AUCTION (TFA)

1097 Pope Urban II outlawed crossbow

1717

Facebook 1 yr

SPEED AND FLEXIBILITY DEMANDSSPEED AND FLEXIBILITY DEMANDS

20

PRODUCTIVITYPRODUCTIVITY

GOODSSERVICE

PRODUCTIONPRODUCTION

SERVICESSERVICES

WHAT DOES IT TAKE?WHAT DOES IT TAKE?

NEVER HAS ENVIRONMENT BEEN NEVER HAS ENVIRONMENT BEEN MORE RECEPTIVE TO NEW IDEAS MORE RECEPTIVE TO NEW IDEAS

& MORE HOSTILE TO EXISTING & MORE HOSTILE TO EXISTING FIRMS and NATIONSFIRMS and NATIONS

(KNOWLEDGE)(KNOWLEDGE)COMPANIES MORE LIKELY TO BE COMPANIES MORE LIKELY TO BE AMBITIONAMBITION CONSTRAINED THAN CONSTRAINED THAN

RESOURCERESOURCE CONSTRAINED CONSTRAINED

KEEPING UP WITH CHANGEKEEPING UP WITH CHANGETechnology & Pace of ChangeTechnology & Pace of Change

SIU AND CHINESE SIU AND CHINESE BASEBALLBASEBALL

•SONY WALKMAN HAS HAD TO PRODUCE 160 MODELS SO SUSTAIN IDENTY AGAINST CLONES

•1976 TEXAS INSTRUMENTS 90%MK SHARE LOW PRICED DIGITAL WATCHES ($19.95)

•1983 LOW END IS $3.00 TI CAN NOT BE PROFITABLE

•In only 7 years TI went from MK leader to extinct

WHAT TO DEVELOP?– HOW MUCH CONTROL ARE YOU

WILLING TO GIVE UP?

WHAT / HOW TO ASSIMILATE?

– WHAT CHANGES TO CULTURE ARE EXPECTED?

– WHAT IMPEDIMENTS TO CHANGE?

PART OF GAME OF DEVELOPING INTERNATIONALLY COMPETITIVE

KNOWLEDGE BASED SOCIETY IS BEING INTERNATIONAL

THANK YOUTHANK YOU