Intelligent Manufacturing € February € 1997 € Vol. 3 € No. 2

Manufacturer's Library

The Innovation War: Industrial R&D - The Arms Race of the '90s, by Christopher-Friedrich von Braun, Prentice Hall, 286 pages, $24.95, ISBN 0-13-268178-1

In the late 1980s, the United States, Japan, Germany, France and the United Kingdom spent a total of $630 million daily on research and development. By 1993, that figure had grown to as much as $1 billion. Yet, over a period of 13 years, 30 of the world's top electronics companies spent well over $100 billion more on R&D than they made in profits.

Competition for its own sake is taking its toll on high-tech corporations around the world, according to the author. They are flooding markets with torrents of faster and faster new product introductions. However, in today's lean economy, with finicky customers and rising pressures to save natural resources, mere novelty is not enough to justify the enormous costs of cutthroat R&D. In the author's words, newer does not mean smarter, faster does not mean better and innovation does not mean progress.

This book offers an analysis of how the situation got to this point, and several practical suggestions for how to remedy it. It provides a historical perspective, supported by numerous case studies.

Starting with an overview of Thomas Edison's milestones of innovation, the book traces the development of industrial R&D from the technology boom of the early 20th century through the computer revolution of the past decade. The author believes that the constant drive for novelty has created a monster that often does more harm than good for industries, corporations and markets in today's global economy. He illustrates how today's manufacturers are pursuing innovation merely for the sake of outdoing other companies, and are squandering a fortune as a result.

Von Braun is an independent consultant and researcher.

The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems, by James F. Moore, Harper Business, 297 pages, $25, ISBN 0-88730-809-0

This book sets the premise that for many companies, the future is now; that today's great enterprises no longer compete for product superiority or even industry dominance. What matters now, and from now on, is total system leadership.

The author is quick to acknowledge that business rivalries today are more intense than ever, but he sees that the playing field has been raised, the speed and stakes are multiplying geometrically, and the strategic options are at their most diverse.

This book envisions a future characterized by organized chaos. As the old powers wait and wonder, vast new fortunes flourish where entrepreneurs jostle to integrate technologies and cultivate rich new markets.

The author introduces biological ecology as a metaphor for strategic thinking about business co-evolution and radically new cooperative/competitive relationships. The book uses the relationships between IBM, Microsoft and Intel to illustrate the metaphor: In some markets, these companies are deadly antagonists; in others, suppliers of vital importance to one another; in still other markets, they're contestants in separate games on entirely unrelated fields.

From heavy manufacturing to healthcare and media, huge interconnected webs extend across product, market and even industry boundaries to define the nature of success for every business. This book provides a topographical map to competitive systems, enabling readers to position their own companies within interlocking business networks, to identify the development stage of their system, and to pursue the strategy most likely to prevail and ultimately dominate the whole.

However, a business model for one's own company is simply not enough, the book insists. Leaders must build strong communities of shared meaning, yielding a special resiliency, flexibility and resistance to catastrophe.

Moore is chairman of Geo-Partners Research Inc. (Cambridge, Mass.), a consulting and investment firm.