R&amp;D Project Selection Incorporating Customer-Perceived Value and Technology Potential: The Case of the Automobile Industry

Sungjoo Lee,Byungun Yoon,Jaehong Choi,Chanwoo Cho

doi:10.3390/su9101918

Abstract

As user-centric innovation has recently emerged as a successful way of developing new products, services, and concepts, it is worth considering the perspectives of potential technology users during R&D project selection processes. Nevertheless, little effort has been made to reflect customer-perceived value in establishing selection criteria, with the focus mainly on technological potential instead. Therefore, this study aims to develop an R&D project selection model incorporating not only technological potential but also customer-perceived value. For this purpose, a new R&D project evaluation model and process is proposed, and its feasibility is tested by potential users in a real scenario. The automobile industry is suitable for our evaluation model because it is a B2C and system-based industry where customer needs are critical to market success and a number of R&D projects are proposed every year. Finally, a supporting tool is developed to help interact with various evaluators and visualize the evaluation results, as customer involvement is recommended for accurate project evaluation from the perspective of technology users. This study is one of the earliest attempts to reflect customer-perceived value in R&D project selection, and practically, the research outputs are expected to be useful to automobile manufacturers in creating value from R&D projects.

Highlights

In an environment of rapidly changing technologies and mega-competition on a global scale, many industries are undergoing radical transformations, and firms are under pressure to act quickly to respond to these threats
To meet the aforementioned needs, this study aims to develop a new R&D project selection model incorporating both technological potential and customer-perceived value and apply them to an automobile manufacturer in Korea, trying to answer the following research question: how can we identify potentially valuable R&D projects from the customers’ perspective? For this purpose, first, a new R&D project evaluation model and process are proposed, and second, its feasibility is tested by potential users in a real scenario
This study aims to develop a new R&D project selection model incorporating both technological potential and customer-perceived value and apply it to an automobile manufacturer in Korea

Summary

Introduction

In an environment of rapidly changing technologies and mega-competition on a global scale, many industries are undergoing radical transformations, and firms are under pressure to act quickly to respond to these threats. R&D project selection is an organizational decision-making process commonly employed in such organizations as technology-intensive companies, public and private funding agencies, universities, and research institutes [16] It is complicated and challenging work, firstly because the future success or impacts of candidate projects are hard to predict and secondly because a multi-stage multi-person decision-making process is required to obtain a reliable outcome [9,11]. It fails to consider the strategic importance of R&D projects, as some projects that are low in ROI may be essential for a company to achieve its long-term strategic goals. When large firms in the USA with proven success in R&D activities were surveyed, it was found that those using a scoring model and risk analysis as well as financial analysis generally had better performance than those using only financial analysis [2]

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