Towards the sixth generation of R&D management

Many companies perceive research and development (R&D) as somewhat fuzzy, involving high uncertainty, with unclear rate of return, and troublesome to manage. On the other hand, companies that succeed at commercializing new technology in a rapid and precise manner achieve possibilities of attaining a greater market share, premium prices and dominant designs, leading to a much sharper competitive edge. The perspective on managing R&D processes has changed over the years, moving from a technology-centered model to a more interaction-focused view. This paper deals with management of research and development (R&D), with focus on synthesizing five generations of R&D processes and combining those with related management responses as well as with examples of managerial approaches – all within a described company context. The choice of combining these three categories represents a dynamic and nuanced picture improving the understanding of R&D management contingencies. A sixth generation of R&D has also been elaborated, one generation re-focusing the research part connecting to loosely tied multi-technology research networks. The bases for this new set of approaches are a broader multi-technology base for high-tech products and a more distributed technology-sourcing structure. The `Bluetooth' case study, originating within Ericsson, has been used to exemplify the roots and ideas of the sixth generation of R&D. The Bluetooth case represents a joint cross-industrial, open intellectual property-based, effort in developing and bringing a new technology to the market by utilizing the resources from more than one thousand companies. Properly managing R&D processes has long been a matter of debate and considered a troublesome area with no simple answers; ranging from an Achilles' heel in some firms to the sole basis of competition for others, many of the differences have contributed to R&D management issues [Product Development Performance, Harvard Business School Press, 1991, p. 1; Developing Products in Half the Time, Van Nostrand Reinhold, New York, 1991, p. 170]. By properly managing R&D processes, companies can reach an increase in lead-time precision, increased quality of final products, and reduced development cost. Overall, companies' competitive advantage can be strengthened as placed efforts are managed in a leaner manner and more aligned with overall business strategy.