Value of Innovation
Business Model Innovation
Continuing studies of IT-enabled innovation in business models
and their relation to firm strategy and performance. Case studies
describe the specific business models of each company, their use
of IT, and joint impacts on firm performance and competitiveness
in the industry. New case studies are done on request of industry
members or on the Center’s initiative. Completed cases include
Includes comparison of market
making models in the PC industry and analysis of the relative
success of these models.
Focuses on analysis of “who captures the value from innovation”
within global supply chains at both the firm level and the country
level using financial, jobs and wages measures of “value.”
Examines the popular conception that the value from product innovations
mainly accrues to firms in the Asia-Pacific rather than to U.S.
firms, i.e., to firms that make the products rather than to firms
that innovate and commercialize products. Compares radical
and incremental innovations, using the iPod and notebook computers
as cases for analysis. Studies the historical trajectory of who
benefits from innovation by tracing products from basic scientific
discovery through commercialization in products such as the hard
Identifies, at the firm level, the key components of innovations,
their cost, and their contribution to total cost of goods sold and
computes the gross and net profit margins for lead firms and their
suppliers across the supply chain for each product. Aggregates firm
level information to the lead firm and supplier home countries to
examine the distribution of benefits by country. Provides empirical
support for theories about “who profits from innovation”
and “firm competition.”
Develops a method
for determining who captures the value from innovation in global
supply chains based on value chain analysis. Value for firms is
defined in terms of gross margins and operating margins. Value for
countries is defined in terms of the margins captured by home-country
firms, and also by the jobs, and the wages associated with jobs.
Applies the financial value capture method to products such as the
iPod, smart phones (including the iPod, RIM
Blackberry, Motorola RAZR, Nokia 7710 and Palm Treo), the iPad
and notebook computers. Applies the job
and wages method to the iPod.
Jobs and Wages in the Wind Energy Industry
This project is to provide better understanding of the distribution
of jobs and wages in the global value chain of the emerging wind
industry, with rapid innovation and high growth potential. It will
produce independent, fact-based information for policymakers and
business executives about the nature of jobs associated with the
wind energy industry in the U.S. The research question is “Who
benefits in terms of jobs and wages from U.S. investment in wind
energy?” It will (1) estimate the quantity, quality, wages
and location of jobs associated with wind energy in the U.S., (2)
compare jobs and wages created in the U.S. and elsewhere by domestic
and foreign manufacturers, and (3) analyze the current wind industry
and estimate future jobs and wages under different scenarios. It
applies value chain analysis to wind turbine design, manufacturing,
installation and operation using an innovative method that we pioneered
in the electronics industry, and that is now being used by economists
in the U.S., Europe and Asia.
The expected outcome is new knowledge about the number, type and
quality of jobs associated with the wind energy industry in the
U.S., and the distribution of those jobs by company and country.
It is expected that the knowledge will enhance public understanding,
influence executives in the industry, and improve public discussion
and policymaking for wind energy and other alternative energy sources.
Globalization of Innovation and Production Networks
Study of the globalization of innovation in the computing industry,
its causes and its impacts. Analyzes the nature of innovation in
the industry, who
captures the value in a global innovation system, how innovation
is organized across the value chain, international trends in PC
demand and production, the evolving global structure of the industry,
factors driving globalization, and implications for firm strategy
and national policy. Part of a National
Academy of Sciences project examining the globalization of innovation
in eleven industries.
Electronic Integration of a Greater China Supply Chain
Examines the technological and organizational factors shaping the
effectiveness of the notebook
industry supply chain, which extends from the U.S. to Taiwan
and China. Shows the use of IT at four levels of the supply chain
from PC maker, to OEM manufacturer, to the third and fourth tier
suppliers. Also shows the important role of social relationships
throughout the supply chain, but especially at the lower tiers where
IT use is minimal. Study with the Center for Strategic Supply Research
for the Institute for Supply Management.
Global Knowledge Networks
Focuses on the role of massive coordination in globally distributed
knowledge networks for R&D and new
product development. Compares and contrasts the knowledge
networks that accompany physical production networks in the
electronics industry. Uses case studies the PC, semiconductor, flat
panel and printer industries to identify the nature of knowledge
inputs and the innovation process, the degree of human interaction
needed to capture the full value of an input, and the types of relationships
that exist among the network members. Considers the implications
of these factors for strategic decisions about where a firm can
provide value or differentiate its products or services in the market.
Offshoring of Knowledge Work
Globalization of Knowledge Work
Study of the factors shaping the outsourcing and offshoring of new
product development activities in the computer hardware, software
and services sectors. Examines how different factors shape location
decisions at each stage in product development (plan, build and
run), resulting in a combination of “push” and “pull”
forces. Uses firm case studies and a survey of 400 high-tech and
non-high tech firms in manufacturing and services to identify factors
and the level of offshore outsourcing associated with greater success.
Includes a study for the National
Academy of Engineering project examining the offshoring of engineering
in different industries. Also includes a study of how manufacturing
is pulling new product development to China.
Analyses of the extent to which successive generations of information
technology, from mainframes to PCs to the Internet, have worked
to lessen the digital divide
between developed and developing
countries. Includes analyses of the factors such as telecommunications,
education and government policy that are complements to these technologies.
Technology Use and Impact
The Digital Home
Study of community experiments with the integration of personal
computing technologies in the home. Includes Ladera
Ranch, California and Tecamac, Mexico (paper
1, paper 2).
Ongoing study of the so-called $100 PC (paper
1, paper 2) and other
efforts to bring personal computing to developing countries.
Development of a method for estimating the global
PC market potential in both developed and developing countries
at the region, country, industry and household levels. Application
of the method to selected countries in each of the major world regions—the
Americas, Europe, Africa and the Middle East and Asia-Pacific.
The role of standards in the adoption and use of computing technologies.
Includes study of the facilitators and inhibitors to the use of
source software, the use of Rosetta
Net in the PC industry supply chain, and the integration
of technologies in the home.
National IT Policy
Study of the impacts of country and industry policies and investment
on the production and use of computing and telecommunications. Includes
developed and developing countries, and specific countries such
as China, Mexico, Brazil, Singapore, Korea, Taiwan, Hong Kong and