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Symposium to Address R&D Management

A year-long international survey, undertaken in a unique university-industry collaboration by MIT and PA Consulting Group is about to provide some answers.

The findings will be presented at a December 10 symposium, "Strategic Management of Technology: Global Benchmarking," at Kresge Auditorium.

The survey findings have been developed from firms performing more than 80 percent of the research and development in North America, Europe and Japan. The survey is the first of several that will be made over the next few years.

Robert A. Lutz, president of Chrysler Corporation, and John A. Rollwagen, chairman and chief executive officer of Cray Research, Incorporated, will deliver keynote addresses.

Dr. Edward B. Roberts, the David Sarnoff Professor of Management of Technology, chairman of the symposium and director of the research study, will present key overall findings. Dr. Roberts, a faculty member at MIT's Sloan School of Management, is co-chairman of MIT's Management of Technology Program and also chairman of Pugh-Roberts Associates, a division of PA Consulting Group.

The MIT community is invited to attend the symposium sessions in Kresge Auditorium on a seats-as-available basis.

The symposium begins at 8:30am with remarks of welcome and a description of MIT's role in advancing technology by Provost Mark S. Wrighton, the CIBA-GEIGY Professor of Chemistry at MIT.

Mr. Lutz, the Chrysler president, will speak at 9am. Mr. Rollwagen will speak at 1:55pm.

Professor Roberts, in a preview of the symposium, indicates that strategic practices vary dramatically around the globe, with Japanese firms consistently demonstrating stronger linkages between technology and overall corporate strategy. The most important strategic criterion internationally is matching R&D to market needs, he says. Well-developed technology strategies at the business-unit level affect overall project performance in regard to time to market and budgeted development cost. Across a wide variety of industrial sectors from chemicals to electronics, corporate technology strategies relate to many facets of improved R&D outcomes.

Professor Roberts' data demonstrate that European and especially Japanese firms are far more likely than Americans to elevate the chief technology officer to a board-level role of influence on corporate direction. In US companies the chief executive officer more frequently relates to R&D primarily in a budget-controlling manner. In Japan in particular the CEO is actively involved in setting strategic direction for technology and integrating it with the rest of the firm's priorities.

Globally the survey documents that firms are becoming increasingly reliant upon external sources for acquiring key technology. North America and Europe are expected to catch up to Japan's high degree of dependency over the next three years. Of interest is the Roberts finding that university research has become a major source of impact upon companies' research endeavors while not yet significantly affecting their development programs.

When asked to rate the top companies worldwide in R&D performance, the senior technology officers completing the survey selected as their top 10: DuPont, IBM, Merck, Glaxo, Sony, 3M, AT&T, Hewlett-Packard, Procter and Gamble, and Shell.

Dr. Jeffrey Lindsay, director of the Technology Management Group of Pugh-Roberts Associates, will present survey results on the special issue of how companies have responded to the resource constraints of the current economic period in their technology management.

Dr. Lindsay finds that the largest decreases in R&D spending are occurring in Europe where 76 percent of the firms are either freezing or reducting their R&D budgets, compared with 57 percent in the US and less than the majority of companies, only 41 percent, in Japan. The worst-hit sector is aerospace, says Dr. Lindsay, with the strongest contrast being pharmaceutical firms most of which are still expecting more R&D spending next year.

Initial analyses by Dr. Lindsay's team show that many cautious cost-cutting strategies, including reduced R&D capital expenditures, are already having negative effects on R&D effectiveness. Surprisingly early-retirement programs seem to be encouraging increasing productivity of R&D through the younger technical work force, increased pressures and b broadened opportunities.

Panels of chief technology officers from US and European firms will report on their company's experiences and interpret the survey's results and implications. They will be joined by academics who will discuss research in progress on global technology issues faced by major corporations.

Panel speakers include George Allen, senior vice president, R&D, 3M Company; Edward W. Cantrall, vice president, operations, Medical Research Division, American Cyanamid Corporation; Alan W. Rudge, managing director, development and procurement, BT plc; MIT Associate Professor of International Management Eleanor Westney; Sergio Barabaschi, president, Ansaldo Ricerche, and vice managing director, Ansaldo spa; Jay K. Hassan, vice president, technology and strategic business, AMP, Inc., and MIT Assistant Professor of Management Marcie J. Tyre.

A version of this article appeared in the December 2, 1992 issue of MIT Tech Talk (Volume 37, Number 15).

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