(ERHEV); Full Performance Battery Electric Vehicle. (FPBEV); Fuel Cell Electric Vehicle (FCEV). 4.1. Advanced Internal Combustion Engine Vehicle.
An Operational Framework in Forecasting Radical Innovation: The Case of the CO²-free Automobile J.J. CHANARON1 1
Research Director CNRS - Scientific Adviser Grenoble Ecole de Management
Abstract This article deals with a framework of the process of innovation which is designed to help building up forecasting scenarios for breakthrough innovations in mature industries. It is based on previous research on innovation and on an up-to-date literature review of key success factors of innovation. It is applied to the various technological powertrain options faced by the automotive industry due to need of reducing fossil fuel consumption and CO² emissions. It gives an appraisal of the various economic, technological, social and political factors which could influence a particular technology allowing a tentative scenario for the next 30 years.
(Van de Ven, 1986; Dougherty & Hardy, 1996; Burgelman & al., 2004). The literature on new product development has obviously provided very interesting insights about the understanding of the company-level drivers of success (Cooper, 1983; Zirger and Madique, 1990; Cooper and Kleinschmidt, 2003 & 2007). Many scholars approached the key success factor issue while studying innovation in small and medium enterprises (SMEs), such as Rothwell & Zegveld (1982) and O’Regan & Ghobadian (2005). Another popular angle to indentify determinants of successful innovation has been in research about leadership and creative human resources management (Jamrog, Vickers & Bear, 2006).
Keywords Innovation, automobile, technology forecasting 1. Introduction Innovation is a complex process which has been identified as being of critical importance for corporate economic wealth and which is still not easily managed within organizations. Facing increasing competition and increasing uncertainty in the context of globalization and worldwide economic depression as well as pressures for fossil-fuels free and environmentally friendly solutions, the automotive industry is desperately looking for technological innovations. For more than a century the internal combustion engine (ICE) has been the dominant design in power train technology and the industry has been considered as static and highly reluctant to radical innovation (Bardou & al. 1977; Chanaron, 1998). Since the late 2000s, industry experts are considering that radical change is needed in order to reduce CO² emissions and the dependence on petrol and fossil fuels.
Although many determinants of innovativeness have been identified and proven through case studies and industry surveys, “the understanding of ideal practices for innovation remains patchy” (Ahmed, 1998). Scholars have been unable to provide practitioners with an operational model for managing innovation efficiently. Most contributions are looking at key success factors from the point of view of the innovating firm and very few from the customer or user perspective when it is obvious that commercial success is heavily dependent on the demand expectations and level of acceptance. The following model is proposed: New products, new services, new processes or new organizations are successful when they are simultaneously: 1.
2.
3. 2. Towards an operational model of successful innovation 4. Numerous factors have been put forward as explanatory variables for the success or failure of technological and organizational innovation. The Schumpeterian legacy promoted the role of entrepreneurship. Some authors emphasized organizational configuration, more particularly Burns and Stalker (1991) and Mintzberg (1979). Others pinpointed cultural context (Kanter, 1983; Yang & Cipolla, 2007), strategy and leadership (Quinn, 1995), most scholars advocating that successful innovations are associated with a combination of factors
Scientifically and technically possible, i.e. when they have the technical performances expected by customers and users; Commercially vendible, i.e. when their price meets the demand as well as the after sale and maintenance costs; Industrially feasible, i.e. when their manufacturing costs and quality are satisfactory to all stakeholders; Politically, socially and culturally acceptable, i.e. when they get political support and full customer acceptance.
It is assumed that success of any given innovation would happen only when and if key variables from these four systems (possibility, vendibility, feasibility and acceptability) are satisfied. 3. Research Design and Methodology
This contribution is based on a qualitative methodology of research. Information, data and opinions have been collected according to the following process: 1. Theoretical literature review and analytical model design: An up-date of the academic literature on the key success factors to innovation in the manufacturing industry was made in order to build up the general analytical model. 2. Technical literature survey : In order to compute scientific, technical, economic and social information regarding various potential innovations, it was necessary to realize a comprehensive survey of the existing academic literature on strategic issues in the automotive industry, and in particular previous research on alternative power trains (Chanaron, 1994; Chanaron & Teske, 2007) as well as a comprehensive scanning of the recent and very abundant professional and technical specialized literature. This review contributed to build up a set of initial hypotheses regarding each technological alternative to the current internal combustion engine. 3. Building an interview guide and carrying out interviews: From this initial set of hypotheses, an interview guide has been designed and tested with a limited number of interviewees. Then 54 in-depth semidirective interviews have been conducted in China, France, Japan, Germany and the United States of America with corporate executives of OEMs; key researchers of public and executives in charge of advanced components such as batteries, electronic control units and fuel cells. All interviewees held decision-making position in their respective function: R&D, strategy, new product development, new product planning. 4. Case study writing and synthesis: An in-depth case study has been prepared for each technological alternative according to the analytical model and conclusions have been derived in the form of scenarios for the future. This article is voluntarily limited to technical, economic, social, cultural, and political factors influencing technological innovation features in power train for automobile. 4. The case studies The proposed four-system innovation model is allowing the creation of a framework to assess and benchmark innovative options which are currently emerging in a particular industry. The research is focused on the following alternative power trains to the internal combustion engine vehicle: Advanced Internal Combustion Engine Vehicle (AICEV); Hybrid Electric Vehicle (HEV); “Plug-in” Hybrid Electric Vehicle (PHEV); Extended-Range Hybrid Electric Vehicle (ERHEV); Full Performance Battery Electric Vehicle (FPBEV); Fuel Cell Electric Vehicle (FCEV).
4.1. Advanced Internal Combustion Engine Vehicle The conventional internal combustion engine will probably remain dominant for decades due to its obvious advantages not only because it is a surprisingly efficient technology and very cost effective but also because the infrastructure is universally available. The technology can still be improved to a large extent through downsizing (weight, size, power, and maximum performances), optimization of ignition and combustion, stop & start devices, etc. Syrota (2008) estimated at 30 to 40% the potential gain in fuel consumption. Advanced internal combustion engines can use natural gas (NGV), bio-fuels and indeed various combinations including mixing bio-fuel or hydrogen and gasoline or diesel in different proportions. They are fully compatible with the Ice technology and then do not constitute a breakthrough innovation. NGV is a perfect solution in countries where natural gas is available such as Iran, Russia and to some extent USA. Bio-fuels are attractive but only in theory. Their massive deployment will need high investment in production facilities as well as huge land requirements. In fact, biofuels are discussed as having significant roles in a variety of international issues, including mitigation of carbon emissions levels and oil prices, the "food versus fuel" debate, deforestation and soil erosion, impact on water resources, and energy balance and efficiency. They also require genetically modified plants (GMO) in order to reach the necessary high levels of productivity which will certainly increase political opposition in some regions. 4.2. Hybrid Electric Vehicles (table 1) Since the success of the Toyota Prius launched in 1997, the hybrid car is one of the credible alternatives to the conventional ICE. The technological advantage of current gasoline-electric hybrids is smaller in Europe due to the high diesel penetration rate. But in the US, the difference is around 25-30% due to the average size of the fleet. Plug-in hybrids have the significant advantage of longer autonomy on electric power train since they have much bigger and much more efficient battery stacks which are rechargeable not only by the ICE but also by plugging into the electricity grid. They also have the advantage of being considered by the industry stakeholders, including the customers, as a first step towards full performance battery electric vehicles and/or fuel cell electric vehicles. The technological bottleneck will remain the battery and the so-called full-electric autonomy which is the only variable that could change the consumer behavior facing environmental and fossil fuel preservation. The extended-range HEV is a third option when the vehicle
run on its electric power train and the ICE is only used for recharging the battery pack.
engineers during at least three decades without another outcome than pure prototypes (Chanaron, 1994).
Table 1. Characteristics of HEV
Table 2. Characteristics of FPBEV
4.3. Full Performance Battery Electric Vehicle (table 2) The electric car powered by electro-chemical batteries predates the internal combustion engine. In recent years, pressures for fossil-fuel free and environmentally friendly powertrains rejuvenated the battery option. One of the major roadblocks to widespread electric vehicle adoption is the "gas-up" factor, i.e. the long time needed to fully recharge the battery pack. The performances of the battery, i.e. energy density [Wh/kg], power density (W/kg) and number of recharging cycles, are indeed the major obstacle to the real market entry of FPBEVs (Heywood, 2008). According to scientists and industry experts, there is still a long way to go before a batterybased power train could compete with the conventional ICE. 4.4. Fuel Cell Electric Vehicle (table 3) Hydrogen fuel cell as a power train alternative for automobile has been a dream for scientists and
Table 3. Characteristics of FCEV
which the different paradigm would be launched in succession overtime, i.e. when they are possible, feasible, acceptable, and vendible.
A Scenario of Consensus Improved Vehicle Fuel Economy and Emissions
Displace Petroleum
Propulsion System
Hydrogen Fuel Cell Battery Electric
Battery Electric Vehicles
Electric Drive
Hybrid and Plug-inHybrid Electric Vehicles
Mechanical Drive
IC Engine and Transmission Improvements t 2010
2020
2030
Providing prerequisites on minimum vehicle performances (habitability and speed), quality, safety and reliability would be fully satisfied, the top four key success factors emerging from the literature review about alternative power trains and the interviews seem to be the following ones: 1. 2. 3. 4.
Driving range; Technological simplicity; Total cost (purchasing as well as using cost); Timing scale;
On-board energy storage is one of the crucial drivers of customers-users’ decision-making since it provides five dimensions: driving range (autonomy), refueling time, safety, impact on vehicle weight and size, and indeed cost. 6. Conclusions This article is suggesting a model to benchmark alternative technologies to the conventional internal combustion engine power train for passenger cars and to foresee their respective long term future. From the material collected in the literature and interviews, it is possible to suggest the following scenario of market penetration for the various technological options: This scenario has the following key characteristics: 1.
5. Discussion 2. Applied to the various technological options, the innovation model provides key elements for technology appraisal and scenario building. There is a consensus amongst interviewees regarding a general scenario in
3.
Clean and efficient advanced ICE will be substituted to conventional ICE during the next ten years culminating with a 75% market penetration in 2020 followed by a slow decline; Hybrid solutions (conventional, plug-in or extended range electric vehicle) will progressively see their market penetration growing up to 25% around 2025; Full performance battery electric vehicles will start being commercialized in 2010 and see a growing
but limited market penetration to 20% by 2030 and 30% in 2050; Fuel cell electric vehicles will not be seriously introduced before 2025 and then see their market penetration growing at a relatively high rate to reach more than 50% in 2050.
4.
A Tentative Scenario
COOPER, R., (1983), A process model for industrial new product development, IEEE Transactions on Engineering Management, 30, pp. 2-11. COOPER, R.G., KLEINSCHMIDT, E.J., (2003), Benchmarking the Firm's Critical Success Factors in New Product Development, Journal of Product Innovation Management, 12, 5; pp; 374-391.
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COOPER, R.G., KLEINSCHMIDT, E.J., (2007), Winning Businesses in Product Development: the Critical Success Factors, Research Technology Management; May/Jun; 50, 3; pp. 52-66.
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DOUGHERTY, D., HARDY, C. (1996), Sustained product innovation in large mature organizations: Overcoming innovation-to-organization problems, Academy of Management Journal, 39, 5, pp. 1120-1153.
40
30
20
10
0 2007
2010
2013
2016
2019 ICE
2022
2025
Clean ICE
2028 HEV
2031 FPBEV
2034
2037
2040
2043
2046
FCEV
There is no real evidence that the current crisis of the worldwide automotive industry would delay or accelerate technical change and innovation in powertrains. The financial difficulties of all OEMs and component suppliers do not allow a significant increase of their research and development expenditures before market recovery. On the other hand, governments are attaching their financial support to a significant improvement of environmental and energetic efficiency of new vehicles. References AHMED,P. K., (1998), Benchmarking innovation best practice, Benchmarking for Quality Management & Technology, 5, 1; pp. 45-56. BURGELMAN, R.A., CHRISTENSEN, C.M., WHEELWRIGHT, S.C., (2004), Strategic Management of Technology and Innovation, McGraw Hill, Boston, 4th Edition. BURNS, T., STALKER, G.M., (1967), The Management of Innovation, Tavistock Press, London. CHANARON, J.J., (1994), Perspectives de la voiture électrique : les leçons de l'histoire, Revue de l'Energie, numéro spécial Energie, Transports, Environnement, n° 463, novembre, pp. 627-635. CHANARON, J.J., (1998), Automobiles: a static technology, a « wait-and-see » industry?, in CHANARON, J.J., BYE, P., Guest Editors, Technological Change and Inertia: Case Studies, A special Issue of The International Journal of Technology Management, 16, 7, pp.595-630. CHANARON, J.J., TESKE, J., (2007), The hybrid car: a temporary step, The International Journal of Automobile Technology & Management, Vol. 7, n°4, pp. 268-288.
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