18-01-2013, 02:19 PM
How innovation drives research and development
How innovation drives research and development.pdf (Size: 727.58 KB / Downloads: 177)
Introduction
Using a laptop computer, Smartphone or iPad has become an
essential part of everyday life for many people. Few, however, will
be aware of how the technology that drives these tools is created.
ARM is the world's leading semiconductor intellectual property (IP)
supplier. Intellectual property is that which originates in the mind
such as ideas, literary works, music and designs. ARM’s business
model is not typical. It does not own any factories but instead
designs and licenses its technology to a network of partners who
carry out the manufacturing. Over 900 licenses have been sold to
more than 250 different partner companies. These include the
world's leading semiconductor and systems companies, such as
Samsung, NVIDIA, Texas Instruments and Qualcomm.
From its founding in 1990 in Cambridge in the UK, it has grown to
become a major developer of digital electronic products. The
company has offices around the world, including design centres in
the UK, USA, India, Scandinavia, France and China.
ARM is a Research & Development (R&D) focused business. Its
‘products’ are intangible and cover a diverse range of applications.
They are used in everything from sensors to servers. Mobile
phones, tablet computers, washing machines, car braking
systems and network routers all use ARM technology.
In return for its technology, ARM receives a license fee for the
original IP from the partner and a royalty on every microchip
produced. To date, over 20 billion chips containing ARM
technology have been manufactured. ARM relies on the high levels
of creativity, innovation and knowledge of its people to continue to
develop new ideas and provide customers with the benefits of
emerging technology. Its R&D activity is collaborative and
generates innovation in other companies. For example, leading
brand Smartphones contain ARM technology that has been
incorporated into chips manufactured by a variety of
semiconductor companies. In turn, they use diverse software and
applications running on various operating systems such as
Android. This sharing of information contributes to increasing the
industry’s knowledge base.
This case study will look at the processes of research and
development at ARM and show how these support the company’s
leading market position.
New product development (NPD)
New products may stem from invention or innovations. Invention is
the formulation of new ideas for products or processes. Innovation is
the practical application of new inventions into marketable products
or services. Product development may follow different routes:
• A product-orientated approach is where a company develops a
new product. It then seeks a market and ‘pushes’ the product
out to that market. This might be to solve a problem or to take
advantage of an opportunity. An example could be developing
new functions for mobile phones. This is a higher risk approach
as the company will carry the costs of development without
knowing what the returns might be.
• A market-orientated approach develops a product to meet a
known current or future customer need. This need would have
been identified through market research. Developing a product
to specific requirements may reduce costs and increase the
probability of product success. Having a market waiting to buy
the product gives assurance of return on the investment.
How innovation drives research and development
OPERATIONS
Curriculum topics covered: • New product development • Innovation
• Research • Development
www.thetimes100.co.uk
• Responding to competitor products allows a business to catch
up or overtake business rivals. This development may lead to a
better product.
• Changes in technology may lead to the development of a more
effective product or one which sets a new benchmark for the
market. For example, the Amazon Kindle is changing the way
people read books.
ARM adopts a route of innovation to transfer its technology into
products customers want and need. Its technology supports three
key types of chips:
ARM’s product development also takes various external factors
into account, for example, the need to develop low carbon
products, increase energy security and address impacts on global
warming. In addition, meeting global economic challenges is also
high on ARM’s agenda. For example, developing countries such
as Brazil and China are becoming more affluent and buying more
consumer electronics.
Other factors affecting ARM include the customer’s desire for
greater computing mobility, lower power consumption and
increased battery life. Consumers are also looking to ‘cloud’
technology, for example, in mobile phone apps, to provide remote
access to virtual storage and software. This provides convenience
and lower cost. ARM’s main technical driver is power efficiency,
making microchips smaller whilst increasing their performance. The
smallest processors are now the size of human hair or crumbs.
Research
The research process involves inquiry into and discovery of new
ideas to solve a problem or create an opportunity. ARM invests
around £140 million per year into its research programmes. As a
knowledge-based research and development business, the majority
of costs are associated with the company’s high quality employees.