The knowledge base for product development The ability of a company to build a knowledge core and continuously create new nowledge is critical to the success of product development. There are four areas where knowledge is needed for product development the different cultures of the world their needs wants and attitudes. and how they can assimilate and absorb new products basic knowledge and skills of present raw material production and food processIng high technological knowledge and problem-solving skills to develop new technolo Basically this is applying the total technology concept to food product development- society, company environment, company resources, knowledge organisation, techniques and the practice of product development. Management selects and integrates the knowledge in the company, and provides the conditions for knowledge to be created. There has to be a communications system in the company so that knowledge spreads and grows throughout the company Knowledge is dynamic, causing change. It is important to recognise that knowledge is not just information and databases, but it is part of the active development in the company in organising the present system and activities, and also in developing new systems and activities. Information can be the basis for revealing and creating knowledge, but knowledge is in people-in their heads, in their problem-solving skills. It is in their understanding of the interaction between technology and society and also of the specific interactions of the consumer and the product, the worker and the processing plant, the salespe erson ai outlet, the cook and the kitchen, and so on
The ability of a company to build a knowledge core and continuously create new knowledge is critical to the success of product development. There are four areas where knowledge is needed for product development: • the different cultures of the world, their needs, wants and attitudes, and how they can assimilate and absorb new products; • basic knowledge and skills of present raw material production and food processing; • high technological knowledge and problem-solving skills to develop new technologies; • product development systems and organisation. Basically this is applying the total technology concept to food product development – society, company environment, company resources, knowledge, organisation, techniques and the practice of product development. Management selects and integrates the knowledge in the company, and provides the conditions for knowledge to be created. There has to be a communications system in the company so that knowledge spreads and grows throughout the company. Knowledge is dynamic, causing change. It is important to recognise that knowledge is not just information and databases, but it is part of the active development in the company in organising the present system and activities, and also in developing new systems and activities. Information can be the basis for revealing and creating knowledge, but knowledge is in people – in their heads, in their problem-solving skills. It is in their understanding of the interaction between technology and society and also of the specific interactions of the consumer and the product, the worker and the processing plant, the salesperson and the retail outlet, the cook and the kitchen, and so on. 4 The knowledge base for product development
150 Food product development Knowledge causes change; information is the basis of change. Today, there is increasing emphasis of this being a knowledge society,, as if knowledge is something new. Knowledge has been around for a long time; there are periods when it increases and sometimes. as in the dark Ages, when it seemed to lose ground. What is different at the beginning of the new millennium is that communication between people has been made much easier; and communication does increase knowledge if the information is absorbed and used in the minds of people. But what does this increasing interchange mean to the food industry? 4.1 Technology, knowledge and the food system Technology takes knowledge and creates products, processes and services for the use of people. At the heart of technology lies the ability to recognise a human need or desire(actual or potential) and then to devise a means- an invention or a new design-to satisfy it economically. Having done so, the model or prototype has to be scaled up and adapted to become a marketable item. The process of turning the full-scale product into something that satisfies market requirements of safety, cost/profit effectiveness and customer acceptance is a difficult one (Cardwell, 1994). A company not only has to have a store of knowledge but it ha to create knowledge during the development of the product, process and service It also has to connect different types of knowledge during the development technological, commercial and organisational. After the development, it has not only transformed the knowledge into practical applications but it has increased its own store of knowledge by the knowledge it has created Two types of knowledge are recognised disembodied(before and during development)and embodied(after development). The disembodied knowledge goes eventually to the embodied product in product development Disembodied knowledge Disembodied innovative activities Embodied product That is. Tacit knowledge in people's heads Explicit (codified) knowledge in records → Knowledge creation in PD Process→ New product There are four important areas of disembodied and embodied knowledge technology, technological change, innovative activities and technological indicators that are important for product development(Evangelista, 1999),as shown in Table 4.1. A company has a stock of technological knowledge, and then generates more knowledge during its innovative activities to produce productive assets, including products, plants and marketing systems In product development, as in all engineering and design, there is a major use of the knowledge that is in people's heads from their education and more importantly from their experience called either tacit(as used in this book)or embedded knowledge. There is also use of recorded knowledge in reports
Knowledge causes change; information is the basis of change. Today, there is increasing emphasis of this being a ‘knowledge society’, as if knowledge is something new. Knowledge has been around for a long time; there are periods when it increases and sometimes, as in the Dark Ages, when it seemed to lose ground. What is different at the beginning of the new millennium is that communication between people has been made much easier; and communication does increase knowledge if the information is absorbed and used in the minds of people. But what does this increasing interchange mean to the food industry? 4.1 Technology, knowledge and the food system Technology takes knowledge and creates products, processes and services for the use of people. At the heart of technology lies the ability to recognise a human need or desire (actual or potential) and then to devise a means – an invention or a new design – to satisfy it economically. Having done so, the model or prototype has to be scaled up and adapted to become a marketable item. The process of turning the full-scale product into something that satisfies market requirements of safety, cost/profit effectiveness and customer acceptance is a difficult one (Cardwell, 1994). A company not only has to have a store of knowledge but it has to create knowledge during the development of the product, process and service. It also has to connect different types of knowledge during the development – technological, commercial and organisational. After the development, it has not only transformed the knowledge into practical applications but it has increased its own store of knowledge by the knowledge it has created. Two types of knowledge are recognised – disembodied (before and during development) and embodied (after development). The disembodied knowledge goes eventually to the embodied product in product development: Disembodied knowledge Disembodied innovative activities Embodied product That is: Tacit knowledge in people’s heads + Explicit (codified) knowledge in records Knowledge creation in PD Process New product There are four important areas of disembodied and embodied knowledge: technology, technological change, innovative activities and technological indicators that are important for product development (Evangelista, 1999), as shown in Table 4.1. A company has a stock of technological knowledge, and then generates more knowledge during its innovative activities to produce productive assets, including products, plants and marketing systems. In product development, as in all engineering and design, there is a major use of the knowledge that is in people’s heads from their education and more importantly from their experience – called either tacit (as used in this book) or embedded knowledge. There is also use of recorded knowledge in reports, 150 Food product development
The knowledge base for product development 151 Table 4.1 Concepts of technology Disembodied Disembodied technology: stock of technological knowledge both embodied in people and Disembodied innovative activities: activities carried out at the firm level to generate or Disembodied technological indicators: R&D expenditures and personnel, design and engineering activities, patent and licence counts, technology flows measured by the technological balance of payments and bibliometric data technological mbodied technological change: accumulation of new technical assets(machinery, quipment, plant and operating systems) ies consisting of the new productive assets with enhanced technical and technological performances compared mbodied technological and innovative indicators: investment in new mach measuring the adoption and diffusion of embodied technologies Source: From Evangelista, 1999, by permission of Rinaldo Evangelista and Edward Elgar Publishing textbooks and journals, called either explicit(as used in this book) or codified knowledge 4.1.1 Knowledge in the food system In a study of the Italian industry, Evangelista(1999)placed the food and drink industries in the investment intensive sector. The other sectors were R&D/investment intensive R&d(research and development) and d&e (design and engineering) technology users In his investment intensive sector, investment activities play an important role, while research, development, design and engineering play marginal roles Process innovations are very common and innovation performance is linked to investment in technologically new machinery and equipment. Other processing ndustries. chemicals and sugar in the investment intensive sector and pharmaceuticals in the r&D/investment intensive sector had higher research, development, design and engineering activities. Pharmaceuticals had high r&D and d&e expenditures accompanied by medium or high levels of investment in machinery, innovation being clearly oriented towards the introduction of product innovations. Comparing companies in Europe in Table 4.2, this greater emphasis
textbooks and journals, called either explicit (as used in this book) or codified knowledge. 4.1.1 Knowledge in the food system In a study of the Italian industry, Evangelista (1999) placed the food and drink industries in the investment intensive sector. The other sectors were: • R&D/investment intensive; • R&D (research and development) and D&E (design and engineering) innovators; • technology users. In his investment intensive sector, investment activities play an important role, while research, development, design and engineering play marginal roles. Process innovations are very common and innovation performance is linked to investment in technologically new machinery and equipment. Other processing industries, chemicals and sugar in the investment intensive sector and pharmaceuticals in the R&D/investment intensive sector had higher research, development, design and engineering activities. Pharmaceuticals had high R&D and D&E expenditures accompanied by medium or high levels of investment in machinery, innovation being clearly oriented towards the introduction of product innovations. Comparing companies in Europe in Table 4.2, this greater emphasis Table 4.1 Concepts of technology Disembodied Disembodied technology: stock of technological knowledge both embodied in people and expressed in a codified form. Disembodied technological change: process of advancing technological knowledge. Disembodied innovative activities: activities carried out at the firm level to generate or develop new technological knowledge. Disembodied technological indicators: R&D expenditures and personnel, design and engineering activities, patent and licence counts, technology flows measured by the technological balance of payments and bibliometric data. Embodied Embodied technology: stock of technological productive assets consisting of machinery, equipment, plant and operating systems (both tangible and intangible). Embodied technological change: accumulation of new technical assets (machinery, equipment, plant and operating systems). Embodied innovative activities: innovative activities consisting of the use or adoption of new productive assets with enhanced technical and technological performances compared with those used before. Embodied technological and innovative indicators: investment in new machinery, equipment and plant incorporating new (or not yet used) technologies; indicators measuring the adoption and diffusion of embodied technologies. Source: From Evangelista, 1999, by permission of Rinaldo Evangelista and Edward Elgar Publishing Ltd. The knowledge base for product development 151
152 Food product development Table 4.2 Product and process innovations in European companies Percentage of firms introducing Product Product and process Innovation Innovation Mechanical 91.6 Food drink 63.9 tobacco Source: From Evangelista, 1999, by permission of Rinaldo Evangelista and Edward Elgar Publishin on process innovation in the food industry was clearly shown(Evangelista, 1999) One recognises that food manufacturing is essentially a supplier-dominated industry with ingredients from the chemical industry and large food ingredients processors and equipment from mechanical/electrical manufacturers. Knowl- edge is bought in by food manufacturers from the suppliers, there is often less creation of knowledge than in the supplier industries(Hood et al, 1995). This knowledge generation and transfer is emphasised at the food congresses where a large number of suppliers not only exhibit their products and equipment but also give or sponsor many of the papers at the meeting. An interesting recent example demonstrating the limitations of product development when relying heavily on outside sources of technology was shown by Martinez and Burns (1999) when studying the Spanish food and drink industry. They found product technology was predominantly in-house generated, process technology com- bined internal development with external acquisition mainly from equipment suppliers. Purchase of equipment emerged as the main source of external technology acquisition as opposed to information gathering procedures. This eliance on externally generated technological developments had brought about low levels of technological independence in general and process technology in particular. The importance of in-house technological capabilities in product and process innovation, indicates the problems in product development a company and indeed an industry faces if it relies largely on external sources as opposed to internal developments. Is it time for food manufacturing to include more R&D and D&e in product development so as to produce a more sophisticated technological content in consumer food products? The food manufacturing industry is probably never going to be a high technological industry but there is a need for a different balance between R&d, d&E and capital investment in plant as these are joint determinants of the performance of companies. Wallace and Schroder(1997) made the following statement which the management of food industry development might ponder:
on process innovation in the food industry was clearly shown (Evangelista, 1999). One recognises that food manufacturing is essentially a supplier-dominated industry with ingredients from the chemical industry and large food ingredients processors and equipment from mechanical/electrical manufacturers. Knowledge is bought in by food manufacturers from the suppliers, there is often less creation of knowledge than in the supplier industries (Hood et al., 1995). This knowledge generation and transfer is emphasised at the food congresses where a large number of suppliers not only exhibit their products and equipment but also give or sponsor many of the papers at the meeting. An interesting recent example demonstrating the limitations of product development when relying heavily on outside sources of technology was shown by Martinez and Burns (1999) when studying the Spanish food and drink industry. They found product technology was predominantly in-house generated, process technology combined internal development with external acquisition mainly from equipment suppliers. Purchase of equipment emerged as the main source of external technology acquisition as opposed to information gathering procedures. This reliance on externally generated technological developments had brought about low levels of technological independence in general and process technology in particular. The importance of in-house technological capabilities in product and process innovation, indicates the problems in product development a company and indeed an industry faces if it relies largely on external sources as opposed to internal developments. Is it time for food manufacturing to include more R&D and D&E in product development so as to produce a more sophisticated technological content in consumer food products? The food manufacturing industry is probably never going to be a high technological industry but there is a need for a different balance between R&D, D&E and capital investment in plant as these are joint determinants of the performance of companies. Wallace and Schroder (1997) made the following statement which the management of food industry development might ponder: Table 4.2 Product and process innovations in European companies Percentage of firms introducing Product Process Product and process innovation innovation innovation Mechanical 92.8 69.8 62.6 machinery Chemicals 91.6 75.5 67.1 Food, drink 70.3 93.6 63.9 & tobacco Source: From Evangelista, 1999, by permission of Rinaldo Evangelista and Edward Elgar Publishing Ltd. 152 Food product development
The knowledge base for product development 153 Research and development in the food industry is a well-recognised case of market failure with its private costs and benefits differing from its so- cial ones. The end result is an under-investment in R&d by private firms and attempts to justify government supporting it. The question is how to solve this dilemma In the meantime, increasing masses of scien- tific and technical information and analysis are being super-imposed on a world wide background of rapid legal, political and social change Organisations can be grouped as functional, processed-based and societal knowledge-based. This means that a compal be based departments such as marketing, production; or it can be an integrated technological entity, or lastly it can be a technological entity integrated into ociety.Is the food industry, which has been mainly functional, moving towards an integrated technological organisation with management based on societal knowledge? If so, the knowledge needed in the industry will have to increase exponentially 4.1.2 Creation and movement of knowledge in the food system The passing of knowledge between suppliers and food manufacturers emphasises that one cannot think of a part of the food industry by itself. In knowledge creation, each part of the food system is affecting knowledge in another part. In primary production, knowledge creation has been very much government-financed and often government-led. In early years, farming and fishing were essential for the production of food for the population, and were often the occupations of many individuals and families. Governments therefore elt that R&D in food production was their social responsibility. Today scientists in private and publicly managed agencies do significant basic and applied research. Governments are still funding agricultural research from government revenues and often organise agricultural research. For example in the United States, the US Department of Agriculture is still a major player in agricultural research and State governments are also involved. Internationally, there are also United Nations organisations and other world governmental agencies funding and organising agricultural research. The roles of the different public agencies and private firms are intertwined in complex ways(Alston et al, 1997) Surprisingly, research for the fishing industry has never been so extensively government funded, and one might think that the over-fishing and lowering of ish stocks has been due to lack of knowledge as much as human greed. Distribution research has also been an area of government research for many years because of the need to store and transport food to urban areas, and internationally. So knowledge increase in the food system is still dependent on governmental funding and support, except for the food ingredient processing and onsumer product manufacturing which have been among the low spenders on R&d related to sales among the industries based on process eng may be due to its only recent emergence as a science-based industry, the
Research and development in the food industry is a well-recognised case of market failure with its private costs and benefits differing from its social ones. The end result is an under-investment in R&D by private firms and attempts to justify government supporting it. The question is how to solve this dilemma. In the meantime, increasing masses of scientific and technical information and analysis are being super-imposed on a world wide background of rapid legal, political and social change. Organisations can be grouped as functional, processed-based and societal knowledge-based. This means that a company can be based on functional departments such as marketing, production; or it can be an integrated technological entity; or lastly it can be a technological entity integrated into society. Is the food industry, which has been mainly functional, moving towards an integrated technological organisation with management based on societal knowledge? If so, the knowledge needed in the industry will have to increase exponentially. 4.1.2 Creation and movement of knowledge in the food system The passing of knowledge between suppliers and food manufacturers emphasises that one cannot think of a part of the food industry by itself. In knowledge creation, each part of the food system is affecting knowledge in another part. In primary production, knowledge creation has been very much government-financed and often government-led. In early years, farming and fishing were essential for the production of food for the population, and were often the occupations of many individuals and families. Governments therefore felt that R&D in food production was their social responsibility. Today scientists in private and publicly managed agencies do significant basic and applied research. Governments are still funding agricultural research from government revenues and often organise agricultural research. For example in the United States, the US Department of Agriculture is still a major player in agricultural research and State governments are also involved. Internationally, there are also United Nations organisations and other world governmental agencies funding and organising agricultural research. The roles of the different public agencies and private firms are intertwined in complex ways (Alston et al., 1997). Surprisingly, research for the fishing industry has never been so extensively government funded, and one might think that the over-fishing and lowering of fish stocks has been due to lack of knowledge as much as human greed. Distribution research has also been an area of government research for many years because of the need to store and transport food to urban areas, and internationally. So knowledge increase in the food system is still dependent on governmental funding and support, except for the food ingredient processing and consumer product manufacturing which have been among the low spenders on R&D related to sales among the industries based on process engineering. This may be due to its only recent emergence as a science-based industry, the The knowledge base for product development 153