A comparative analysis of technological uncertainty and its impact on R&D investment in the information technology and automobile industries
Chokri Allani
Tokyo University, Japan
Fumio Kodama
Tokyo University, Japan
PP: 16
Abstract
Produce development is a critical phase in the technological innovation process of any industry. A deeper understanding of the characteristics of each industry is essential in order to enable relevant strategic management tools to be applied to that industry. Information Technology (IT) appears to be evolving in a radically new way, resulting in an innovation pattern quite different from other industries.
Many analysts characterize the high-tech environment in terms of its uncertainty. However, very few have explicitly clarified the characteristics of this uncertainty or provided measured, empirical data to substantiate those characteristics. Uncertainty arises from a combination of technological innovation cycles determining a changing market share for industry players.
A comparative analysis of these characteristics for the IT and automobile industries in Japan suggests that the IT industry exhibits a higher level of uncertainty than the automobile industry. The high level of uncertainty is coupled with an increasing level of R&D investment. These finding suggest that managers and strategists should adopt new highly flexible methods of management, invest in strategic R&D and develop external alliances to succeed in the highly turbulent IT environment.
Keywords
new product development, IT, automobile industry, R&D, uncertainty
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