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OCR for page R1
Series on Technology
and Social Priorities
NATIONAL ACADEMY
OF ENGINEERING
Managing
Innovation
Cases from the
Services Trusties
Bruce R. Guile and James Brian Quinn
Editors
NATIONAL ACADEMY PRESS
Washington, D.C. 1988
OCR for page R2
National Academy Press ~ 2101 Constitution Avenue, NW ~ Washington, DC 20418
NOTICE: The National Academy of Engineering was established in 1964, under the charter of
the National Academy of Sciences, as a parallel organization of outstanding engineers. It is auton-
omous in its administration and in the selection of its members, sharing with the National Academy
of Sciences the responsibility for advising the federal government. The National Academy of En-
gineering also sponsors engineering programs aimed at meeting national needs, encourages education
and research, and recognizes the superior achievement of engineers. Dr. Robert M. White is president
of the National Academy of Engineering.
Funds for the National Academy of Engineering's Symposium Series on Technology and Social
Priorities were provided by the Andrew W. Mellon Foundation, Carnegie Corporation of New York,
and the Academy's Technology Agenda Program. This publication has been reviewed by a group
other than the authors according to procedures approved by a Report Review Committee. The views
expressed in this volume are those of the authors and are not presented as the views of the Mellon
Foundation, Carnegie Corporation, or the National Academy of Engineering.
Library of Congress Cataloging-in-Publication Data
Managing innovation: cases from the services industries/
Bruce R. Guile and James Brian Quinn, editors.
p. cm. (Series on technology and social priorities)
Bibliography: p.
Includes index.
ISBN 0-309-03926-6: $32.50.
ISBN 0-309-03891-X (pbk.): $22.50
1. Service industries Technological innovations
Management. I. Guile, Bruce R. II. Quinn, James Brian,
1928- . III. Series.
lID9980.5.M343 1988
658.5/14-dcl9
88-19631
CIP
Copyright ~3 1988 by the National Academy of Sciences
No part of this book may be reproduced by any mechanical, photographic, or electronic process,
or in the form of a phonographic recording, nor may it be stored in a retrieval system, transmitted,
or otherwise copied for public or private use, without written permission from the publisher, except
for the purposes of official use by the United States Government.
Printed in the United States of America
OCR for page R3
Preface
Services now account for more than two-thirds of the U.S. gross national
product and close to three-quarters of U.S. employment. This is not a new
phenomenon, but important questions remain unanswered. How sophisticated
are services industries in their use of technology? Are the productivity im-
provement issues in services fundamentally different from those in manu-
facturing businesses? Is the competitive performance of U.S. services industries
threatened by underinvestment in technology or by poor management of
innovation? What is the effect of global economic integration brought about
in part by advances in services such as transportation and communications-
on the structure and performance of U.S. services industries? These ques-
tions, and other similar questions, are addressed in this book and its com-
panion volume Technology in Services: Policies for Growth, Trade, and
Employment.
The two books-one focused on the management of technology in services
and the other on public policy issues-set forth an important message: ser-
vices such as banking, software development, communications, air trans-
portation, and health care are technologically dynamic and crucial to the
performance of both U.S. manufacturing and the entire economy.
Whether the task is linking world financial markets through computer and
communications networks, lowering the cost of delivering volatile materials
or urgent packages, or designing dams and bridges for U.S. or foreign
governments, the challenges to technology and management in services in-
dustries are significant. Productivity in such industries suffers from many of
the same problems identified for manufacturing industries. As the papers in
this volume demonstrate, capital availability, human resource development,
. . .
OCR for page R4
1V
PREFACE
quality, and scale economies are as important in services as they are in
manufacturing. R&D or innovation in services industries can create a com-
petitive edge just as they do in manufacturing. In short, if reasons exist for
distinguishing between the importance and character of manufacturing and
services, they do not arise from the role of technology in the industry.
The principal focus of this volume is on examples of the application of
technology in services businesses, either at the level of an individual business
or at the level of an industry. Much of the material in this book was presented
at an NAE symposium entitled "Technology in Services: The Next Econ-
omy" held in Washington, D.C., on January 28 and 29, 1988.
I would like to thank James Brian Quinn, who chaired the NAE activity
on technology in services, and Bruce R. Guile, the principal staff officer for
the project, for their efforts. Together they assembled a first-rate advisory
committee, worked with the advisory committee to organize an excellent
workshop and subsequent symposium, and have moved quickly to get this
material published.
Also, on behalf of the Academy, I would like to thank the advisory
committee (listed on page 195) for the project end the authors who participated
in the workshop and symposium. Special thanks are due to Jesse H. Ausubel,
director of the NAE Program Office, Stephen L. Murphy, an NAE summer
fellow who helped in the early stages of the project, H. Dale Langford, NAE
editor, and to Marjorie D. Pomeroy, administrative assistant in the NAE
Program Office who, although she has moved on to other employment, was
involved in the project for almost 18 months.
ROBERT M. WHITE
President
National Academy of Engineering