Introduction: Innovation, Research and Development, and Entrepreneurship

lobal competitiveness has taken on new dimensions during the last few years. Among the reasons are the globalization of the economy and the several geopolitical changes in the world that are paving the way for the formation of a new political and economic world order. The harmonization of the 12 internal markets of the members of the European Economic Community has advanced in spite of various difficulties, particularly those with the monetary system. Until the 1980s, national pride and independent thinking blocked cooperation and coordination of technological capabilities in Europe. However, in pursuit of "Europe 1992," European countries have undertaken several initiatives to encourage technological cooperation and coordination, such as ESPRIT, EUREKA, RACE, and are considering a new program for technology policy. These programs have created a European forum for technological policy and integrated the technical and scientific community in Europe by bringing together hundreds of companies, universities, research institutes, scientists and engineers, even stimulating the participation of small countries and companies. The European Commission contributes 50 percent of the costs of the projects sponsored by these programs. Several additional West European countries have applied for EEC membership together with several Eastern European
Copyright 1993, The Institute of Management Sciences 0091-2102/93/2306/0001$01.25

countries. At the same time, other groups of nations are forming economic or trade comrhunities, which eventually may also result in technological cooperation. Examples of such groups are the North Atlantic Free Trade Agreement (NAFTA) between the US, Canada, and Mexico; and the Asia-Pacific Economic Cooperation (APEC) between the US, Canada, and 13 countries from the Pacific basin (China, Japan, Taiwan, Hong Kong, South Korea, Australia, New Zealand, Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand). These agreements are very important, and they may have a significant impact upon the global R&D and innovation environment. Several of the less developed Pacific region countries participating in APEC are infused with a powerful sense of progress and a belief that they can improve their economies; and they show the dynamism, aggressiveness, disciplinary energy, alertness, precision, and dependability that some of their more developed partners have shown. The liberalization of the ex-USSR and other Eastern Block countries and their transformation into free market economies is another important factor. Apart from the fact that the literacy rate is very high in these countries (97 percent in the former USSR countries), the preparation of their populations in science and mathematics far exceeds that of the US [Gardner 1988]. The transfer of large numbers of scientists and
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engineers from the defense R&D and innovation sector to the private sector is going to have an enormous impact on R&D and innovation. Because of these changes in the global environment, the fast advancing technological progress, and increased global competition, R&D and innovation have increased in importance. MS/OR should grasp this opportunity to contribute by introducing its systematic approach to problem solving in every facet of R&D and innovation management. Entrepreneurship is also important. In several cases, it has been a natural successor to R&D and innovation. In addition, it is the main vehicle for transforming excommunist countries into free market economies. Given that entrepreneurship relies on recognizing opportunity, solving problems, communicating, and integrating ideas, technologies, and resources [Ivancevich 1990; Kao and Stevenson 1984], MS/OR practitioners should look into ways of supporting entrepreneurs in each of these areas. MS/OR, as a broadly defined approach to problem solving and decision making, is very powerful and unique. Nevertheless, its impact upon society has been restricted by the fact that people view it as a set of models rather than a philosophy. Also in many cases, practitioners have misapplied it, tailoring problems to the models rather than the other way around. A three-way "conditioning" is, therefore, necessary before MS/OR can make its contribution to start-up firms and society in general in the years ahead [Papageorgiou 1991]: First, the MS/OR approach has to be conditioned to the problem environment so that the practitioner uses the appropriate approach for that particular environment. The objective is to maximize the net benefit by implementing an improved solution. Start-up firms and developing and less sophisticated organizations may wish to improve the current situation rather than to optimize. Under some circumstances, by conditioning the MS/OR approach the practitioner can arrive at a simple approach that can produce a solution within the temporal, attitudinal, economic, comprehension, and other constraints of the decision maker and that also has a good chance of implementation; this is superior to a more sophisticated model with little chance of implementation. Second, practitioners should try to "condition" the environment to the MS/OR approach by educating the entrepreneurs and decision makers about the MS/OR philosophy, rather than the particular methodology, emphasizing the MS/OR way of thinking and its capabilities. Unfortunately, MS/OR courses in some management schools are not tailored to the needs of the future decision maker. Instead they concentrate on the techniques, reflecting the technique orientation of the MS/OR instructor and the textbook. As a result, future managers and entrepreneurs, who will be the consumers of MS/OR rather than analysts, are usually introduced to MS/OR techniques rather than to the MS/OR philosophy and its application. Third and finally, the MS/OR professional must be conditioned to the problem environment. Unless MS/OR practitioners become fully aware of all aspects of the problem environment, to the point of feel-

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ing that they are not alien elements in that environment, they will be unable to carry out the necessary conditioning of the MS/ OR approach and the environment, nor will they be able to implement the solution. MS/OR has so far found limited real-life applications in R&D, innovation management, and entrepreneurship, particularly in the latter two areas. This special issue of Interfaces is intended to encourage such applications. It brings together five studies on these topics. In the first paper, "Swinging on the branch of a tree: Project selection applications," Sid Hess shows that decision making in situations where little data is available can benefit greatly from the logical structure of simple models. Several papers have appeared on the subject of project selection, but as Sid Hess suggests, this problem remains difficult because data for assessment are seldom available. He discusses two real-life case studies in which ICI Americas, Inc. used simple decision trees to help it select R&D projects. In the first, it decided on a major effort in new process research, and in the second, on screening new product ideas for development. Hess concludes that the discipline of a logical model provides a better basis for selecting projects than intuition and that management scientists must be unafraid to use simple models when lack of data precludes more rigor. "Swinging on one branch is more fun than standing on the ground watching." Industrially developed countries, under the threat of increased global competition, have taken measures to protect their technological advancements. As a result, less developed countries, which in the past had relied on imported technologies, are faced with major decision problems in managing technological innovation. Ilyong Kim discusses the case of Korea in his paper "Managing Korea's system of technological innovation." He outlines the issues, suggests a broad perspective on a harmonized technological innovation system, and explores the issues of R&D synergy and R&D project selection in the context of technological development in Korea. He also makes suggestions for future research on managing the technological innovation system in Korea. John Ettlie and Joan Penner-Hahn, in their paper "High technology manufacturing in low technology plants," discuss the problems of integrating technology in modernizing older plants by installing new manufacturing technology. They report their findings from a two-year case study on the installation of an innovative flexible assembly system in a midwestern automotive components plant. Among their conclusions is the proposition that a curvilinear relationship exists between the supplier-user satisfaction score and flexibility outcomes and that in several cases the term technology integration may be more appropriate than technology transfer. In the paper "Effects of innovativeness and venture stage on venture capitalistentrepreneur relations," Harry Sapienza and Allen Amason report the results of their empirical study of 51 venture-capitalbacked firms regarding the impact that pursuit of innovation has upon the relations between the venture capitalist and the venture's founding entrepreneur, as well as the impact of venture stage upon

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these relations. The authors conclude that greater marketing innovativeness is associated with greater openness in venture capitalist-entrepreneur pairs, that greater technology innovativeness is related to greater divergence of views, and that the earlier the stage of the venture the more frequent the interaction. Also, they found that openness was negatively related to technology innovativeness in early stage ventures and positively related in late stage ventures. The organizational environment is changing as a result of technological developments and changes in the traditional shape of the hierarchical pyramid. These changes have an impact upon the role of middle managers, including MS/OR practitioners; Elie Geisler, in his paper "Middle managers as internal corporate entrepreneurs: An unfolding agenda," describes the new evolving role they should be playing. He suggests that success and survival in the changing organizational environment require middle managers and MS/ OR practitioners to think and act as intrapreneurs. He proposes a conceptual framework for describing the position of middle managers and MS/OR practitioners in the current and future organizational environment, and he argues that they will be more successful if they exhibit the characteristics attributed to entrepreneurs. He supports his proposals with findings from a related empirical study. I thank the authors for their contributions and the reviewers for their efforts for this special issue of Interfaces. I hope that this special issue will stimulate further research on these topics and promote the application of MS/OR in solving related problems. References
Gardner, M. 1988, "How does Ivan and Yelena's education compare with Johnny and Helen's?," Chemtech, Vol. 18, No. 8, pp. 457461. Ivancevich, J. M. 1990, "A dean's perspective on entrepreneurship," paper presented at the TIMS/ORSA Joint National Meeting, May 79, 1990, Las Vegas, Nevada. Kao, J. J. and Stevenson, H. H., eds. 1984, Entrepreneurship: What It Is and How to Teach It,

Harvard Business School, Cambridge, Massachusetts. Papageorgiou, J. C. 1991, "On increasing the successful application of OR/MS in the public sector of developing countries," in Operations Research '90, ed,, H. E, Bradley,

Pergamon Press, Oxford, pp, 85-92, fohn C, Papageorgiou Management Science and Information Systems Department University of Massachusetts at Boston Boston, Massachusetts 02125

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