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The Industrial College of the Armed Forces

Creating Strategic Opportunities for Transformational Innovation in

a Globalized World

Dr. Mark L. MontrollProfessor, Industrial College of the Armed Forces

National Defense UniversityWashington, DC

Presented to:

NATO Science For Peace Project 982063

Research and Development Strategies: Support of Dual Industrial Transformation International Conference

National Defence CollegeBucharest, Romania1 November 2007

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Agenda

• Overview• Theories of Innovation and Disruptive Technology • Impact of Globalization on the Development of

Innovation and Commercialization • Concept Integration• Case Study Examples• Challenges • Final Observations

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Overview

• Modern Theories of Innovation Development, Economic Globalization and Technology Commercialization Combine to Provide Powerful Insights for Renewed Economic Growth.

• International Defense and Security Requirements depend on the Commercial Marketplace. Dual-Use Technology, Products and Services Coexist in the Marketplace and Support Each Other.

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Theories of Innovation and Disruptive Technology

• Disruptive Innovation Theory– Underserved, Overshot and Non-User Customers – Low-End Disruption– New-Market Disruption

• Resources, Processes and Values Theory– What you have; What you do; What you want to do

• Emergent Strategy Theory– Uncertain Circumstances – Adapt to Market Signals– Patient for Growth – Impatient for Profit

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Impact of Globalization on the Development

of Innovation and Commercialization

• 10 Flatteners:– Berlin Wall Came Down –Renewed East-West Linkage– Netscape Went Public – Dot-Com Boom– Work-Flow Software – Connectivity & Productivity– Outsourcing – Commodity Process Sourcing Options– Offshoring – Cost-Efficiencies– Uploading – Open Sourcing, Equal Access, Podcasts– Supply-chaining – Strategic Process– Insourcing – Comparative Advantage – Refocus on Core– Informing – Google, Search Engines, Access to information– Collaborative Initiatives – VoIP, Wireless, File-sharing

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Impact of Globalization on the Development

of Innovation and Commercialization

• Triple Convergence:

– Convergence #1: All 10 Flatteners are Happening Together

– Convergence #2: Work Habits Changing from Vertical & Exclusive to Horizontal & Inclusive

– Convergence #3: Three Billion New Digital Workers Entered the Global Economy

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Concept Integration

• Redeploy Resources – Talent and Infrastructure– Cross Disciplines– Cross Border Collaboration– Horizontal Integration

• Mass Customization– Global Communication, Supply Chain & Delivery

Processes• Dual Use Markets

– Industrial (Shipbuilding), Power (Density, Portability), Digital (Communications, Processing), Miniaturization (Power requirements, Weight, Functionality), Bio-Medical (Instrumentation, Clinical)

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Case Study Examples

• Philadelphia Naval Shipyard– Closed as part of Base Realignment and Closure Process

• Aker Shipyard Opened on Site• Build Commercial Ships using European Design, construction practices, and

specialized modules

• Austal Shipyard, Australia– Build Fast Ferries – new technologies and designs

• Open plant in US using Australian Design and construction practices• Building commercial and military ships in same plant

• HP – Precision Electronic Test Equipment for Defense and Aerospace Industry– Laser Printers– Inkjet Printer Technology– Personal Computers– Nano-Technology Research– Medical use of Inkjet Technology– Precision Inkjet Technology combined with Nano-Technology

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Challenges

• Nurture Scientific Expertise and Comparative Advantage

• European Single Labor Market for Science• Opportunities for International Collaboration

– NATO Science for Peace– EU Research Framework Programme – FP7

• http://cordis.europa.eu/fp7/home_en.html

• Underserved, Overshot and Non-User Customers• Miniaturization Markets (Non-Market Markets)• Commercialization Process – Persistence Counts!

– Patient for Growth – Impatient for Profit

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Final Observations

• Globalization Brings Great Opportunities• New Ways to Connect to the World• Traditional Expertise More Important Than

Ever• Low-End Disruption is a Dual-Use Start

Point• Collaboration is Key