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The Evolution of Process Technology Innovation for Securing Dominant Design

Lee, Su · Kim, Gilseon · Park, Jinhan

Published: January 2014 · Vol. 43 No. 4 · pp. 1379-1410
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Abstract

This study aims to analyze the impact of process innovation on the determination of dominant designs through a 'process technology innovation evolution model,' and to build a theoretical rationale for the proposition that process innovation evolves through the stages of cost innovation, process design innovation, and convergence/fusion innovation. While prior studies on dominant design have discussed issues only from the perspectives of products themselves or product technology innovation, this study proposes that the concept of dominant design can be applied not only to products but also to processes and process technologies, and seeks to propose a process technology innovation evolution model by analyzing the patterns of innovation that occur as process technology forms dominant designs. Examining the innovation process of process technology reveals that it evolves through several stages with distinctive characteristics after the initial establishment of the process system. The evolutionary process of process technology innovation consists of: 1) the cost innovation stage, 2) the process design innovation stage, and 3) the convergence/fusion innovation stage. Initial process technology innovation is primarily driven by cost reduction-oriented innovation, but as experience and understanding of processes accumulate, so-called process design innovation emerges, involving the division and reconfiguration of processes. At the process design innovation stage, capabilities for modifying process structures using modular concepts and for managing these in an integrated manner are required. Finally, based on knowledge and know-how regarding process technology, the innovation capability of process technology becomes sufficiently advanced to realize new product concepts through the convergence and fusion of related processes. This study uses the shipbuilding industry as its subject of analysis because it facilitates the observation and data collection of process technology innovation in order to understand the developmental process of process technology innovation and analyze the relationship between process technology and dominant design. The shipbuilding industry is one in which Korean companies currently hold dominant competitiveness. Products for which dominant design concepts have been established range from early oil tankers, bulk carriers, and container ships, through LNG carriers and ultra-large container ships, to the current focus on high value-added products such as offshore plants. Although Korean firms competed with companies from overseas countries including Europe, Japan, and China for each product type, they have maintained the number one global market share position in the offshore plant sector to the present day based on superior process technology, making it possible to secure highly appropriate data for empirically analyzing the relationship between process technology and dominant design. The contributions of the 'process technology innovation evolution model' proposed in this study are as follows. First, it demonstrates the validity of including the concept of process design alongside the concept of dominant design, which has been studied primarily from a product design perspective. Second, it provides a theoretical framework for process innovation, which has been insufficiently studied compared to product innovation, while simultaneously complementing the limitations of the product-process innovation model of Utterback & Abernathy (1975) and Abernathy & Utterback (1978). While the earlier model presupposed the sequentiality of innovation in which process innovation follows product innovation, the research model proposed in this study differentiates itself by presenting the developmental process of 'product-process-product,' whereby innovation in process technology and the convergence/fusion among related process technologies lead to the emergence of new product concepts, along with the supporting logic. Finally, regarding the shipbuilding industry analyzed in this paper, the study demonstrates that the competitive advantage of Korean companies lies not in cost competitiveness based on inexpensive labor, but in process technology capabilities that involve redesigning processes, managing them in an integrated manner, and creating new product concepts through convergence and fusion with related processes, all based on a deep understanding of production processes and products.
Keywords: 공정기술수주산업제품기술조선산업지배적디자인해양플랜트혁신모형