Innovtion And Technology Trnsfer - Essay Example

Innovtion nd technology trnsfer Introduction Over the pst decde, mnufcturers hve mde extrordinry dvnces in utomotive technology. From shrp incresesin the power nd efficiency of the power trin, to reductions in emissions, the trditionl internl-combustion engine is being trnsformed. These dvnces re driven by the mrket preferences of customers; by regultory requirements relted to clen ir, sfety, nd fuel consumption; nd by the opportunities presented by the powerful progress of technology. In the United Sttes, emissions from new utomobiles re strictly regulted by the Environmentl Protection gency (EP). For exmple, since 1981, grms-per-mile (gpm) emissions of crbon monoxide nd hydrocrbons hve been reduced to mximum of 4 percent of their mid-1960s levels. In pril 2002, Cliforni becme the first US stte in which bill restricting crbon dioxide emissions from utomobiles ws introduced. Current ntionl regultions cll for less thn 0.25 gpm of nonmethne hydrocrbons in vehicle exhust, less thn 3.4 gpm of crbon monoxide, nd less thn 0.4 gpm of nitrogen oxides. Unfortuntely, rel-world emissions of crbon monoxide nd hydrocrbons re typiclly bout five times higher thn the levels tested in the lb, while emissions of nitrogen oxides re bout two times higher. The reson is tht some emissions tests do not mtch rel-world driving conditions very well. lso, some emissions controls do not survive the wer nd ter of driving. Overll, this is still mjor chievement, nd the ir is noticebly clener in some U.S. cities. To respond to the chllenges of the clener ir nd less pollutions done by utomobiles, the electric vehicle hs been introduced on the mrket in the nineteenth century. However it fded s the gsoline powered engine took the spotlight. Current pper is imed t presenting the electric vehicle mrket chllenges nd importnce of this innovtion s one of the lterntives in the utomobile industry. The pper discusses the significnce of the technology, competitive dvntge on the mrket s well s risks ssocited with the introduction of the electric vehicle to the utomobile industry. Development of the Technology Cliforni single hndedly pushed the utomotive industry into developing the electric vehicle to its fullest cpcity by instituting, in 1990, the zero-emission vehicle mndte, or ZEV. It requires tht specified mnufcturer's sles consist of ZEV's. The ZEV mndte my be the single most importnt event in the history of trnsporttion since Henry Ford begn mss-producing crs eighty yers go (Sperling 1995). The mndte is set to tke effect in 1998 in Cliforni nd s mny s five other sttes hve considered dopting the ZEV mndte for themselves, with New York lredy mndting the policy. Severl uto mkers hve filed suit ginst the ZEV mndte, but the ltest rulings hve gone ginst the uto mkers. In 1989, Los ngeles City Council member Mrvin Brude issued worldwide bid for 10,000 electric vehicles to be delivered to southern Cliforni in the mid-1990's (Sperling 1995). The bid ws met with mjor skepticism from mjor utomotive compnies bout the mrket for the electric vehicles, nd the bid ws grnted to Clen ir Trnsport, n nglo-Swedish compny with smll number of employees. The compny spent millions to build hybrid electric-gsoline cr but could not get ny funding to begin mnufcturing. s result, the compny simply disppered in the erly nineties, but it did not mtter becuse by this time the mjor uto mkers hd tken interest. Elsewhere in the world, mny other countries were lso experimenting with electric vehicles. British mnufcturers never stopped producing these vehicles nd hd turned out severl thousnd electric milk delivery trucks yer. By 1990 it ws estimted tht 33,000 of these were on Englnd's rods. In Jpn, mjor uto mkers hd indulged themselves in the development of the electric vehicle during the 1970's, but bcked off their efforts in the 1980's only fter they hd built smll number of smll electric vehicles. In the erly 1990's the Jpnese were skepticl bout the electric mrket, for the sme resons s the mericn compnies were, nd decided to hold out on further development. The next key event occurred on Jnury 3, 1990, when Roger Smith, CEO of Generl Motors, held press conference to unveil the sporty bttery-operted Impct (Sperling 1995). Generl Motors fell under the Cliforni ZEV mndte requiring mjor uto mkers (those selling over 35,000 vehicles yer in Cliforni) nd thus ws the first to nnounce its plns to produce nd electric vehicle. Ford, Toyot, Chrysler, Hond, Nissn nd Mzd ll met the numericl qulifiction of mjor deler nd re thus subject to the ZEV mndte tking effect in 1998. Six of the seven uto mkers hve unveiled their own version of the electric vehicle, with few still in the prototype phse. GM, through Sturn, hs lso joined the rce nd unveiled its EM V-1 electric vehicle (which ws the Impct) while Ford nd Chrysler pln to begin full production of their electric Ecostr nd TEVn respectively. Hond finlly unveiled its electric version of the new RV 4 t the end of 1996, successfully entering them in the EV mrket These compnies re expected to produce electric subcompct crs, minivns nd light pickups s the dedline ners. Not ll electric vehicles produced for 1998 will come from these seven uto mkers. Smller uto mkers like Mercedes nd Volvo re expected to produce electric vehicles of their own to compete with the other seven (Ymguchi 1996). smll mericn compny, Solectri, hs lredy strted production on full sized sedn, pickup truck nd rodster. utomobile industry chllenges In the cse of utomobile mnufcturing, the industry relies on dozens of suppliers of vrious inputs, including cotings, plstics, steel, rubber, glss, nd luminum. Even the lrgest, most verticlly integrted utomkers, such s Generl Motors (GM), purchse mterils nd products from lrge number of ncillry mnufcturers. Mking ech of these mterils nd products requires some combintion of rw mteril extrction, trnsport, nd intermedite nd finl processing of mterils before they rech GM for ssembly in the motor vehicle. From n nlyticl perspective, one should include the emissions nd ssocited helth nd environmentl impcts of ech of the ncillry industries within the life-cycle nlysis of n utomobile. Such choice would men, for exmple, tht emissions from steel plnts tht supply the uto industry should be ssigned to the finl vehicle. Then s more intensive use of luminum nd plstic displces steel in utomobile mnufcturing, one might trck chnges in the emissions inventory to determine how vrious emission types chnge in response to substitutions of mterils. For mny of these ncillry industries, the pricing mechnism will cpture environmentl impcts. Control of ir pollutnts requires stck equipment; wstewter effluent my be hndled by pretretment fcilities; nd hzrdous wstes must be properly lbeled, trnsported, nd disposed of. These ctivities incur cpitl nd operting costs which, to some extent, re embodied in the prices tht suppliers chrge to the utomker. To the extent tht this occurs, such costs find their wy into vehicle prices, thereby signling to buyers tht purchse of prticulr vehicle cuses certin environmentl impcts nd tht there re no externl costs. ll costs re internl, nd the uto mnufcturer ccounts for upstrem costs either directly or indirectly through the pricing mechnism.It is cler tht the rel world does not operte so smoothly nd precisely. The pricing mechnism is less thn perfect nd regultions do not cover ll dverse impcts, which result from mterils extrction, trnsport, nd mnufcture. The question tht my be rised t the corporte level concerns the resons to incorporte externl costs, nd here we identify three specific spects in order to promote environmentl mngement s centrl element of corporte business strtegy: 1. voiding the "regultory tredmill." n externl cost tody will be n internl cost tomorrow. While it is impossible to predict the exct direction of future regultions, the lst decde clerly indictes tht environmentl policy is moving towrd incresingly broder coverge in the mterils nd impcts it regultes. Impcts such s greenhouse gs emission nd wetlnds loss my see more stringent regultions in the next decde. This leds industry mngers to consider such impcts nd their ssocited costs in their plnning nd budging ctivities. 2. Internl competitiveness. n incresingly globl economy mens in mny instnces tht the highest stndrds for product content (e.g., solvent- nd hevy metl-free pper coting, unssembleble nd recyclble utomobiles) will incresingly dictte the globl stndrd. To secure plce in n incresingly globl mrketplce, setting or exceeding the highest environmentl stndrds is preferble to retrofitting designs nd processes fter they re put in plce. 3. ccountbility beyond responsibility. Business is under incresing pressure to protect the environment, regrdless of whether forml regultory mndtes re in plce. Environmentlists, investors, nd the public t lrge re incresingly sensitive to firm's willingness to subscribe to voluntry codes of conduct nd regulrly nd completely disclose its environmentl performnce in nnul reports nd through other reporting mechnisms. For mny stockholders, the distinction between internl nd externl is n rbitrry one, nd the firm ought to be held ccountble for impcts even in the bsence of regultion. This, mny would rgue, is the essence of environmentl stewrdship. With this mrket-derived frmework s bckground, we turn to more detiled considertion of the corporte ttitudes nd mngement concepts which llow costing concepts to be opertionlized. Then we will discuss the use of life-cycle nlysis s decision support tool in order to chieve environmentlly bsed business strtegies. Impcts on Humns I. New Technology . Rnge The electronic vehicle, or EV, is driven by bttery tht runs exclusively on electric. The btteries tht exist tody hve limited rnge between fifty nd seventy-five miles per full chrge. Newer prototype btteries hve rther lrge increse in their rnge, but they re still prototypes. The longest rnge documented by n EV in one chrge is 230 miles (Moore 1996). It used new prototype bttery from Electrosource in Texs tht is ner production nd t resonble cost. The limited rnge of the EV in use tody relly is not problem considering the fct tht Clifornins, the min users of the EV, drive on n verge of forty miles dy (Moore 1996). This mens tht the owner will hve to plug the bttery into 110v. c power source nd let it chrge for eight to ten hours, the current time it tkes to fully chrge the present btteries. Fst chrging is still in the developmentl stge nd will work somewht like gs sttion where one pulls in nd in ten minutes the EV will be fully rechrged. B. Current Btteries Btteries re comprbly the most expensive prt of the EV, but dvnces in technology hve lredy reduced the price. The btteries re continuously chrged to keep the vehicle running nd fter so mny rechrges they will go bd, but not to worry, these btteries re fully cpble of being recycled. Tody the EV minly uses the led-cid bttery tht is used in the gs powered crs for strting. The only difference between the two types of btteries is tht the EV bttery is designed to be dischrged t very low voltge nd then chrged up gin, while the gs cr bttery is designed to be used for short time only to strt the motor nd then quickly rechrged. nother type of bttery tht is rther new nd being used in EV's is the Nickel-Cdmium bttery. These btteries re very expensive, but cn be rechrged up to 2,000 more times thn the led-cid bttery. C. Upcoming nd Future Btteries Two compnies re in the developing stges of new btteries for use in EV's tht will mke them go frther, fster nd quicker thn originlly thought possible. The Horizon bttery is ner production nd hs been tested in EV's. It is led-cid bttery, but with spce ge technology, where pure led is infused into fiberglss filments (Sedgwick 1996). This new technology mkes the bttery lighter nd more powerful thn nything in the lst eighty yers (Sedgwick 1996). Ovonic Green is the other compny nd its bttery is to be twice s powerful s the Horizon nd use less toxic mteril. In the ner future, EV btteries will probbly evolve into lithium btteries, which will be lighter nd more powerful thn nything ever developed. Is hs been estimted tht the energy density of one lithium bttery my equl tht of 850 pounds of led-cid btteries (Moore 1996). II. Culturl EV's will sfen the world round us. The technology tht exists tody for the EV does not llow them to rech speeds of over fifty miles per hour. The slower cr is operted, the length of rection time for the driver is incresed leding to better hndling of the vehicle shll n dverse sitution occur. Neighborhoods will be sfer nd better enjoyed by the fmilies tht live in them s result of the EV. long with the production of the EV comes the relistic gol of the neighborhood electric vehicle, or NEV. These crs would be smll, light vehicles built specificlly for neighborhood trips, not for use on the freewy (Sperling 1995). These crs would only hve room for one or two people with limited storge. There hve been prototypes of these crs built by smll independent compnies like the mericn bsed Trns 2 nd few other compnies from Scndinvi who hve built lrger prototypes to ccommodte fmilies with severl children. The reson tht the NEV is so exciting is becuse it would solve the problems mny loclities hve with too mny crs tking up too much spce nd trveling too fst. utomobile trnsporttion tody is plgued with the problems tht ll vehicles stisfy ll purposes, ll rods re built to serve ll vehicles nd ll rules re designed for the stndrd vehicle of the pst (Sperling 1996). The NEV would revolutionize these problems. Rods cn be mde to fit these smller crs mking them inccessible to some crs nd trucks, sfety will increse becuse of the mneuverbility nd low speed of the NEV nd becuse of their smll size there will be more spce vilble to be put to other uses. These NEV's will led to non-industril neighborhoods. Neighborhoods will keep the industril world nd ll of its problems out by mking the rods smller so they hndle only NEV trffic. Households will tend to "run" less nd insted of owning gsoline powered vehicles, they will simply rent them for long trips, sving them more money. NEV neighborhoods nd the people in them will hve slower pce of life thn wht we re used to tody, reducing stress nd helth risks. The culturl impct of the EV nd NEV re truly positive nd will benefit everyone when the totl switch from gsoline powered vehicles to electric powered vehicles occurs. III. Economic . Costs to the mnufcturer The bttery for the EV is still the single most expensive prt of the EV. It is yet to be seen if cost reductions from improved technology nd mss production will bring the cost of the EV down to tht of gsoline vehicles. Most likely this will never hppen when looking t the initil purchsing price, but it is certin tht the cost in the long run of the cr will be better thn tht of the gsoline vehicles (Sperling 1996). Electric vehicles will hve much lower operting costs nd longer vehicle life thn gsoline crs, nd, not including the bttery, will be less expensive . Ford's director of electric vehicle plnning nd progrm office comments, "Its hrd to see tht we cn't build n electric vehicle tht's chep, or mybe even slightly cheper thn our current internl combustion engine vehicles. The bottom line on the cost is in the bttery."(Sperling 1996). The wy people buy crs hs chnged lso. By 1994 some twenty-five percent of new crs purchsed in the United Sttes were lesed (Sperling 1996). The new trend in cr buying is to lese, especilly expensive crs wheres much s seventy percent of some models were lesed. Lesing is n esy wy for spreding out the high costs of btteries nd lowering the costs of producing EV's. B. Costs to the Consumer The retil cost for n EV will vry on the bttery in the cr, the bigger the bttery for longer rnge, the more the EV will cost. The EV will sve its owner money becuse of its operting costs, it is less likely to be in the shop thn gsoline powered cr would be. The cost of n EV t present time is little more thn tht of regulr sized cr, Solectri is selling its sedn for $25,000. This will likely ll chnge s the dedline for the ZEV ners nd uto mkers re forced to come up with qulity EV. Bttery prices, s expensive s they re now, will drop nd lso mke the EV more ffordble (Ymguchi 1996). Prices of EV's will drop nd become more ffordble s the technology becomes more dvnced nd the EV moves into mss production. IV. Environmentl Impcts . Greenhouse Gsses It is generl consensus round the world tht mjor reductions in greenhouse gsses re needed in order for the humn rce to void economic nd ecologicl disster. In 1993 President Clinton endorsed nd greement from the 1992 Rio de Jneiro Erth Summit to cut U.S. greenhouse gs emissions to 1990 levels by 2000 (Sperling 1996). In 1994, meeting tht gol by the yer 2000 would require reduction of emissions by seven percent. Bttery-powered vehicles would provide modest greenhouse gs svings if introduced to full-scle production tody. The energy efficiency of the EV would only increse, drwing less energy from power plnts mening even more of substntil cutbck in greenhouse gsses. Electric vehicles using electric from nturl gs power plnts will only cut the relese of greenhouse gsses more, nturl gs is the clenest burning nd most efficient fossil fuel. The EV's do not burn the fossil fuel, they just use the electric generted from the nturl gs power plnt. EV's tht run on electric which ws generted by nucler of hydroelectricity would hve nerly zero greenhouse emissions. The switch to EV's would lso lessen the drilling for oil nd our dependency on other ntions to redily export it to us. B. ir Qulities The primry reson the government hs shown its support for the EV hs been ir qulity. The sole reson for the ZEV mndte is controlling ir pollution. utomobiles nd smll trucks re responsible for bout hlf of ll urbn ir pollution. Tody's vehicles powered by gsoline nd diesel fuels emit the vst mjority of crbon monoxide, hlf of the hydrocrbon nd nitrogen pollutnts, nd smll proportion of prticulte nd sulfur dioxide. The switch to EV's would drmticlly reduce ll of these pollutnts in urbn settings. In some cities the ir qulity impct of electric vehicles cn be extrordinrily positive, such s Los ngeles. EV's my not eliminte ll ir pollutnts, nd depending on where their electric comes from, my contribute minutely to some pollutnts like nitrogen oxide, but their impct on ir qulity is greter thn ny of the negtives. The min reson is tht mny power plnts re locted fr from populted res, nd lrge proportion of emissions from electricity production re relesed t night when sunlight is not present to form ozone nd when people re indoors not exposed (Sperling 1996). Internl combustion engine emissions re lwys in our fce, while EV emissions re fr off nd t night. I think the entire world would benefit gretly from clener ir nd the resons need not be elborted on, they re tht evident. Forecst Currently mjor uto mkers like the Big 3 in the U.S. re forced to better their EV technology nd s result I see the EV industry nd mrket tking off within the next five yers. When the EV will debut in full production its purchse cost will deter mny potentil buyers, but s the technology improves nd the EV's become more ttrctive nd efficient to own, the cost will fll llowing productivity nd purchsing to increse. s the technology vstly improves I see the Federl Government stepping into the industry to help push it long. It cn only be in the Government's best interest to help speed up the production nd dvncement of the EV becuse of the cost cutting it will provide for the Government. The Government will not hve to spend money, tht it does not hve, on emissions testing or subsidize reserch on the reduction of pollutnts emitted from gsoline powered vehicles, becuse EV's re lmost emission free. The United Sttes will lso not be held t the whims of the oil producing ntions whom we rely on for the export of their oil becuse EV's obviously do not rely minly on the use of fossil fuels. Not only will it sve money but it will lso help the welfre nd helth of this ntion by helping to dvnce EV technology. Clen ir is necessity theses dys s is the Ozone lyer nd the switch to EV's will only improve both. Twenty five yers from now I believe the number of electric bttery powered vehicles will gretly outnumber the gsoline powered engine vehicle. The gsoline powered engine will not yet be obsolete but it will be heded in tht direction. The super mjority of mericn utomobile owners will own n EV nd mny will be type of NEV s neighborhoods redesign their infrstructure to ccommodte only these vehicles. Gs sttions will be in serious decline s they re replced by chrging sttions nd the price of gsoline will be extremely high becuse the U.S. will not import s much oil s it hd twenty-five yers go. Reserchers Comments I find it hrd to believe tht the EV is not lredy in full-scle production tody. s I stted in the beginning of my pper EV's were preferred over gsoline powered vehicles but gsoline powered vehicle technology developed fster thn EV technology. This my be true, but the technology for EV's never disppered nd other ntions round the world were still working on the development of EV's. Grnted, the big oil compnies hve put up mjor fight s to llowing this technology to dvnce nd they hve promised to mke gsoline more efficient, but from the reserch I hve done on this topic it is fr less costly to produce nd operte n EV in the long run. I think more push hs to be mde to convince the mericn public tht these vehicles will sve them money if they look pst the initil purchsing cost. uto mnufcturers like Ford, GM, Toyot nd Hond seem to be wy hed of others in the sense tht they hve plced their EV's into the mrket in the southwest nd these vehicles re strting to dot urbn res more nd more. One min question tht I found in reserching the ZEV mndte ws wht if the uto mkers qulifying for this mndte do not meet the stndrds becuse they do not hve perfected model tht cn be relesed to the public re they going to be fined, or will they not be llowed to sell their vehicles in Cliforni Perhps solution to this question would be some type of greement between those compnies,tht must meet the ZEV mndte tht would llow compnies to gin ccess to certin EV technology tht will help them in developing their own model. References 1. Doctors, R. (n.d./1996). system pproch to btter powere vehicles. http://www.west.bnet/rondoc/evs.html 2. Moore, Tylor. (1996). The rod hed for EV btteries. EPRI Journl, 21 (2), 6-16. 3. Sedgwick, Dvid. (1996 December 30). Entrepreneur prepres to zoom into mrket forEV btteries. utomotive News, 15-20. 4. Sperling, Dniel. (1995). Future Drive. Wshington, D.C.: Islnd Press. 5. Ymguchi, Jck. (1996, July). Hond nd Toyot enter the electric vehicle mrket. utomotive Engineering, 28-34. 6. .F. Burke, On-Off Engine Opertion for Hybrid Electric Vehicles (Wrrendle, P: Society of utomotive Engineers, 1993), pp. 1-18. 7. Robert Q. Riley, lterntive Crs in the 21st Century: New Personl Trnsporttion Prdigm (Wrrendle, P: Society of utomotive Engineers, 1994), pp. 41-43. 8. Robert Willims, "Fuel Cells, Their Fuels, nd the U.S. utomobile," World Cr Conference, CE-CERT (University of Cliforni Riverside, 1993). 9. G. S. Dy nd P. J. H. Schoemker, voiding the pitflls of emerging technologies, Cliforni Mngement Review, 42(2), 2000, pp. 8-33. 10. W. W. Suen, Mnging Interntionl Technology llinces: Bllrd Power nd Fuel Cell Vehicle Development', PICMET'01, July, Portlnd, Oregon, 2001. Read More