Sir William Castell
Chief Executive, Amersham plc
"The product is the medium by which knowledge-intensive industries deliver the fruits of their intellectual capital."
Europe’s economies can no longer compete on the basis of their historic and traditional
manufacturing industries. The most important economic challenge is to encourage
economic activity out of traditional industries — most of which depend on size and
economies of scale for their competitiveness — and into those industries that are
knowledge-based. The dash to ‘knowledge driven’ economies is underway and it has
deep meaning for business requiring a shift in the business mindset. It is not merely
about strengthening the science base — it is fundamental to commerce, affecting
all sectors from banking to pharmaceuticals, IT to leisure, insurance to diagnostics.
We have all become familiar with terms such as knowledge-based industries, digital
economies, globalisation and intellectual capital, though we may be less familiar
with the implications that follow. They are indeed profound, not only for the way
we must manage, but also for the very nature of the products we must develop for
emerging technology-driven markets where the product is the medium by which knowledge-intensive
industries deliver the fruits of their intellectual capital.
R&D in the knowledge economy
Another classic and significant feature of the knowledge economy affects the nature
and frequency of decisions on R&D. With increasing market share the more products
your company develops and produces, the greater the potential to deliver yet more.
The return on capital employed is increased as new products expand market horizons
into new areas.
My own company, Amersham, is a classic example of a knowledge-intensive organisation
to which all these issues apply. The migration of genetics into commerce is an example
of just such an emerging knowledge-based industry. We are dealing with a globally
networked ecology, feeding off discoveries and developments in molecular biology,
genomics, computational sciences, physics and microrobotics. As this ecology develops
and generates new products that meet emerging market needs, it becomes a wealth
generating economy, with a thriving network of universities, companies, hospitals,
researchers and many others capitalising on new discoveries and technologies to
deliver knowledge-based products and services.
As the nature of products has changed so too has the way they are developed. Typically
technologies on which they are based are characterised by complementarities, ie,
innovations hardly ever function in isolation: they depend on the simultaneous availability
of complementary technologies. Today’s R&D must seek, find and fuse disparate
technologies emanating from the global science base. For these reasons, R&D
is complex and uncertain, but in a rapidly changing world the lifeblood of research
is uncertainty and it is the R&D function that translates that uncertainty into
commercial opportunity.
The R&D global network
Perhaps R&D is not the most meaningful description of the activity which takes
place in business. Commercialisation of science and technology might be better.
The confusion here is between the description of function and process. R&D’s
function is to create options for new products and processes, while the process
of R&D involves a network that spreads far beyond the confines of the company.
That companies appreciate the scope and real role of their R&D is vital, especially
when, as for Amersham, it merits a significant percentage of sales. Our company’s
R&D is a distributed global function that is part of an ecology feeding off
developments in all branches of science and technology. Our success derives not
just from our own scientists but also the careful harnessing of others, particularly
in academia where we have been able to nurture and develop blue sky science to deliver
real products with real uses and real value. Our R&D managers’ task of maintaining
the delicate balance between opportunity, uncertainty, reward and risk is now more
challenging than ever.
