Murtha

Global Knowledge Networks and New Industry Creation: 

Global Knowledge Networks and New Industry Creation The case of flat panel displays The National Academies Government University Industry Research Roundtable February 3-4, 2004 Tom Murtha Carlson School of Management University of Minnesota

Research Sponsored by the Alfred P. Sloan Foundation: 

Research Sponsored by the Alfred P. Sloan Foundation Sloan Foundation Industry Studies Program sponsors Research Centers and Projects on over 25 industries in U.S. Universities. FPDs: One of 7 industry projects linked into the Sloan Industry Globalization Research Program (Phase II). Program Title:“Industries as Global Knowledge Networks.”

Projects: 

Projects

Slide4: 

1995: A Picture of a Global Industry Source: SEMI JAPAN

FPD World Sales Volume: 1990-2006: 

FPD World Sales Volume: 1990-2006 Source: DisplaySearch

Share of Global Markets for Territorially-Based FPD Production, by Country: 

Share of Global Markets for Territorially-Based FPD Production, by Country

Table 3: 1996 – 2003 Rank Order of Large Format (greater than 10.4-inch) TFT LCD Manufacturers: 

Table 3: 1996 – 2003 Rank Order of Large Format (greater than 10.4-inch) TFT LCD Manufacturers

Table 3: 1996 – 2003 Rank Order of Large Format (greater than 10.4-inch) TFT LCD Manufacturers: 

Table 3: 1996 – 2003 Rank Order of Large Format (greater than 10.4-inch) TFT LCD Manufacturers

Globally Competitive U.S. Leaders in the FPD Industry: 

Globally Competitive U.S. Leaders in the FPD Industry Corning, glass substrates Applied Materials, CVD tools IBM, large format LCDs (prior to 2001) 3M, brightness enhancement film Photon Dynamics, test equipment

Success Factors: IBM, Applied Materials, Corning, 3M: 

Success Factors: IBM, Applied Materials, Corning, 3M Strong pre-existing organizational capabilities in Japan. Close relations with customers, suppliers and alliance partners with operations in Japan, regardless of nationality. Responsibility for new global FPD business vested in Japanese affiliate (except 3M).

Success Detractors: Many Other U.S. Firms: 

Success Detractors: Many Other U.S. Firms Policy failure: Strings attached to U.S. R&D subsidies distracted many firms from establishing learning relationships in Asia. Out-of-touch with industry developments Unable to master high volume production Reluctance to source equipment, materials, process recipes from Japan. Targeting generational or technological leapfrog without achieving current tech mastery Confusing market cycles with commodification.

Success Factors: Korean Firms: 

Success Factors: Korean Firms Willingness to adopt lagging generation technology as learning platform. Resistance to government policies mandating industry consolidation. Global best-supplier policy for equipment and materials, regardless of nationality. Aggressive Fab investment during Asian Financial Crisis (Japanese firms stalled). For LG, alliance with Philips to raise capital and improve consumer market access.

Policy Implications: 

Policy Implications The U.S. does not have a monopoly on new industry creation. Industries are increasingly born global U.S. firms’ competitiveness in fast-evolving, knowledge-driven industries can be compromised by policies that distort incentives in favor of domestic R&D partnering. Upgrading knowledge work in the U.S. requires openness in knowledge-sourcing abroad. Non-discrimination between U.S. and foreign firms in government-supported R&D consortia

Methodology: 

Methodology Semi-structured interviews with over 200 senior managers, engineers and scientists since 1996. Comprehensive archival documentation of trade and business media. Company, industry and government documents. Site visits to all major FPD producers in U.S., Japan, Taiwan, Korea, Europe between 1996 and 2003, often multiple over time. Trade shows and industry conference attendance and presentations of findings. Acquisition and analysis of data from leading industry market research firms.

Slide15: 

Site Visits: U.S. OIS ImageQuest Technologies dpiX, A Xerox Company IBM Planar Inc. Plasmaco Candescent Technology Corporation FED Corp. PixTech Motorola Raytheon Display Technology Systems Applied Komatsu Technologies Applied Materials, Inc. MRS Technology, Inc. Photon Dynamics Lam Research Corning Inc. 3M Honeywell Compaq Lucent Technologies United States Display Consortium Technical Visions InFocus Sharp, U.S.A. Department of Defense DARPA National Economic Council

Slide16: 

Site Visits: Japan IBM Japan Toshiba DTI NEC Hitachi Hosiden Philips Hosiden Flat Panel Co. Seiko Epson Sharp Matsushita Electric Sumitomo 3M MITI/METI SEMI U.S. Embassy, Japan Corning, Japan KK Corning Advanced Display Products Applied Komatsu Technologies Canon Futaba Asian Technology Information Program (DARPA/USDC) IDTech

Slide17: 

Site Visits: Korea and Taiwan Samsung Display Devices Samsung Electronics Samsung Corning LG Electronics LG Philips Hyundai Daewoo EDIRAK Korean Ministry of Science and Technology Korean Ministry of Trade, Industry and Energy Nan Ya Plastics First International Computer Prime View ITRI Unipac Chunghwa Picture Tubes

Slide18: 

Site Visits: Europe Philips LG Philips PixTech

Slide19: 

Book available: This presentation covers highlights from a new book, Managing New Industry Creation, by Thomas P. Murtha, Stefanie Ann Lenway and Jeffrey A. Hart. Web sources: Stanford University Press, www.sup.org www.amazon.com (available through any country-based amazon site, e.g., uk, fr, jp, etc.) Or request at your local book store

References and caveats:: 

References and caveats: Thomas P. Murtha, Stefanie Ann Lenway and Jeffrey A. Hart. Managing New Industry Creation: Global Knowledge Formation and Entrepreneurship in High Technology. Stanford: Stanford University Press, 2001. Unpublished data in market share tables derived from authors’ primary research, informed estimates, and various industry sources. Do not cite without permission. All material in this presentation is copyrighted by Stanford University Press or the authors. All rights reserved.

Contact Information:: 

Contact Information: Tom Murtha and/or Stefanie Lenway Department of Strategic Management and Organization Carlson School of Management University of Minnesota 321 19th Avenue South Minneapolis MN 55455 Wireless: 612 963 7749 (Tom) 612 803 3795 (Stefanie) Fax: 612 626 1316 Email: tmurtha@csom.umn.edu slenway@csom.umn.edu