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Internationalization of R&D

Internationalization of R&D. Markku Karlsson. Metso Technology. Metso briefly Business areas. Metso R&D Investment in technology. M€. 3.7 %. Metso Paper. 200. 3.8 %. 3.3 %. 3.3 %. Metso Automation. 3.6 %. 3.7 %. 150. Metso Minerals. Metso Ventures. 100. 50. 1999. 2000. 2001.

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Internationalization of R&D

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  1. Internationalization of R&D Markku Karlsson

  2. Metso Technology

  3. Metso brieflyBusiness areas

  4. Metso R&DInvestment in technology M€ 3.7 % Metso Paper 200 3.8 % 3.3 % 3.3 % Metso Automation 3.6 % 3.7 % 150 Metso Minerals Metso Ventures 100 50 1999 2000 2001 2002 2003 E2004

  5. Metso R&DInvestments in R&D 2002 Voith Bold figures according to annual reports, italic figures according to “2003 R&D Scoreboard” published by Britain’s Dept. of Trade and Industry 4.6 Sandvik 4.6 Wärtsilä 4.0 Atlas Copco 3.7 Metso 3.5 Andritz 3.4 3.2 3.1 3.0 3.1 R&D, % of sales 2.5 Astec 1.6

  6. Metso R&DRTD locations O u l u Ersmark K a j a a n i Colorado Springs Varkaus Jyväskylä To r o n t o Sundsvall Tampere Belleville Valkeakoski Surahammar Hollola P o r i Kelowna A n j a l a n k o s k i Karlstad ilw auk ee M Nastola d or Biddef J ä r v e n p ä ä R a i s i o Shrewsbury Pittsburg Turku Helsinki Clarks Summit Sherman Karkkila Danville Sala Lansdale York Düsseldorf Trelleborg Willich Hannover Orléans Metso Paper Mâcon Metso Automation Metso Minerals Metso Ventures

  7. Metso R&DRTD project portfolio management

  8. Metso R&DRTD Project portfolio 2003 Novelty/Potential Radical Research(10%) 9% 8% • Systematic Technology Management forms the common R&D-language in international corporation • It is a pre-requisite for transparent and (to certain degree) commensurate decision-making • It promotes continuous development and learning Radical Innovations (30%) 7% High (F:New to Market) 17% 18% 4% Medium (E:New to Metso) Incremental Research(10%) IncrementalInnovations(50%) 24% 11% Low 2% (D:Improve-ments) Technological Uncertainty Low Medium High (A: Product Development) (B: Concept Development) (C: Research) Long term Short term Medium term

  9. Innovation

  10. Innovation Metso Innovation Process Metso Innovation Process will provide a framework for capturing Metso’s technology synergies and developing solutions for the customer’s needs Research & Develop-ment Idea mgmt Feasi-bility Solution development Re-view Launch Gates Project phases

  11. Innovation Example of MIP project phase: R&D Research & Develop-ment MG2 MG2 requirements Objectives and Tasks • Technical concept and viability solved • IPR issues solved • Business plan version 2 • Marketing and launch plan • Operational model and plans • Make cash flow estimation and financial projections • Define product offering & launch plan for each segment, • Develop operational model and plans • Design and describe product operations and functions • Generate and select product concept • Assess technical viability • Check IPR issues • Define preliminary design, cost structure, operational plans

  12. Innovation Innovation process - example • Performance • effenciency • cost reduction Curtain coating Dry coating Spray coating/sizing MSP coating Moment for long-term strategic decision Blade coating 1990 2000 2010 Time

  13. MIP Innovation Combining different disciplines Industrial Design Honeycomb structures Manufacturing technologies Materials Technology

  14. Innovation “Smart Grinding Mill” example • Common Innovation Process adds important transparency and builds the R&D-culture in international corporation

  15. Challenges

  16. Challenges Business trends for heavy industry • Declining total market for heavy industry world-wide • Growth opportunities in mature businesses stay difficult to identify • Only few big global competitors • Commodity trap – poor product differentiation • Differentiation is vital in all business processes • Quality and differentiation important success factors on mature markets • Ability to forecast and react • Trends change faster • Listening to the customer interface is important • Mental attitude downwards - lack of drive to create growth

  17. Focus today Focus in the future Focus in past ChallengesFuture competence Business models Partner network Technology fusion • Integration of different competencies • Speed and customer-orientation • Specialization and differentiation • Flexibility and quality • Networking

  18. Customer persons Metso persons Customer Systems Metso Systems Machine ChallengesLife-cycle management • Interaction of business model, technology development and partnerships & alliances - early on in the development phase • Emphasis on life-cycle thinking - also R&D must focus on the best life-cycle performance SERVICE BUSINESS CONCEPT Service and maintenance orchestration Remote Service concept Service information management

  19. Research networking

  20. Research networking - forest cluster LWC paper making roadmap North America New knowledge from 2007 onwards 1970 - 1985 1985  onwards Finnish orchestration capability? China Central Europe & Scandinavia 2000 - 2010 2010 ?

  21. Research networking - forest cluster Metso technology focus TEKES EU Forest cluster research Efficiency improvement Metso RTD Product development programs Strategic research Metso RTD Joint development programs

  22. Research networking - forest cluster Horizontal and vertical innovation Future interactive business system • Omya • Basf • Springer Publisher Raw material supplier Pulp & Paper Maker Production concepts Product concepts Demand concepts Consumer Printer Technology Technology Technology • Voith • Voith Fabrics • Heidelberg

  23. Research networking Building competencies Åbo Akademi, Finland • International market requires global thinking in R&D - orchestration of business and research partners’ resources • Partner networks build new qualifications for innovation - both horizontal & vertical Beijing • Paper technology knowhow • Pilot facility Jinan • Wet end chemistry knowledge center Shanghai • Paper quality measurements • Sensor calibration Yueyang • Process line start-up

  24. Competitiveness from technology

  25. Competitiveness from technology New breakthrough technologies Biotechnology opens new opportunities Wireless process automation Virtual reality and simulations in design, R&D, and training Prosessiauto-maation kehitysalusta muuttuulangattomaksi Micro machines, sensors, nanotech Lite designs Customized digital printing

  26. Summary

  27. Certified partners Partners Core Core SummaryInternationalization of R&D • Systematic Technology Management provides the necessary transparency for continuous improvement and learning - a pre-requisite for effective R&D in an international company • Coupling of R&D with business model and partnership development is necessary - increased focus on life-cycle thinking! • Active orchestration is vital for effective and international R&D - ensure critical mass in developing the well focused core of your business; Develop simultaneously your capabilities to orchestrate everything around it • The human factor - personal relationships and trust - should never be underestimated; Promote international mobility of R&D staff!

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