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The Convoy Model as a new “glocal” growth accelerator metaphor for the economy in the next decade

Apart from a few very successful clusters around the world, most STP’s struggle with developing companies into international growth companies. Possible explanations could be lack of the necessary potential within the companies, lack of necessary assistance to prompt ga elle growth and secure internationalisation or unstable or unpredictable markets. This session will explore best practice in accelerating growth in high tech companies.. Author! "uan A. #ertolin, $hief %nnovation &fficer, espaitec Science and Technology Park of $astellon 'SPA%() $o*authors! +erhard ,ensch '$-& ,ensch ,edia ..$), Paco (egre '$-& espaitec Science and Technology Park of $astellon 'SPA%(), Antonio #arba '/icerrector Science and Technology Policies "aume % 0niversity)

Executive Summary
For some 20 years, regional and city based innovation and economic development policy focused on clustering, based on Michael Porter's (1990 $ompetitive Advantage of (ations. !o"ever, there are still those "ho are doubtful about "hether clusters foster economic development# $n this article an alternative is proposed% the convoy model# &he evidence that clusters lead to successful inter'firm regional interaction is inconclusive# $s it time for a rethin() $n the current economic climate, and bearing in mind the importance of creating ne" models to foster the competitiveness of our *M+, it is necessary to redefine the model that has been "idely implemented, i#e# the ,luster Model# -e need a ne" model that "ill become the metaphor for accelerated and ne" economic, technological and societal gro"th in the decade to 2020# Convoy is a more powerful metaphor than cluster to describe a local economic development strategy and is worthy of equal attention

Companies growth in high!technology environments" landscape
&he gro"th stage often re.uires ma/or changes in entrepreneurial strategy 1 # ,ompetition and other mar(et forces call for the reformulation of strategies# 0ue to the rising of ne" and more substantial problems than those the entrepreneur faces during the start'up stage, a reorientation of the type of leadership% from entrepreneurial one'person to managerial team'oriented, is re.uired# &he building of more dynamic capabilities for getting differentiation from emerging competitor is an interesting challenge for gro"ing firms# &he movement to globali1ation and more to 2glocali1ation3 concept (thin(ing in global but acting locally re.uires also re'e4amination of companies on their culture, structure and systems to be adapted to the ne" challenges# 5o" it is the time to bring up essential elements such as innovation and entrepreneurial thin(ing in strategies of gro"ing ventures# &hus, the transition from an entrepreneurial style to a managerial approach ma(es a difference in the business gro"th process# &he ne" management approach "ill help to embed the company in a richer environment, "here different disciplines converge in a common "or( streamlined "ith specific fle4ible methodology that "ill be adapted to the dynamic change re.uirements to generate e4treme innovation (6trevation

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2+ntrepreneurships &heory, Process 7 Practice3 0onald F# 8urat(o

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a very important aspect of gro"ing strategy is the introduction of new technology products' into ne" mar(ets# $n order to achieve success during the process of introduction "e should consider the three main steps to be performed% • • • &o understand the customer needs &o educate the customer about the product and technology underlying &o convince the customer that the ne" product is the best solution to their problems ( in some cases the problem is ne" and in the other it is not even considered =nce "e have a clear idea of the main features related to gro"th ventures. .uires the achievement of ne" competencies and a deep analysis of the target mar(ets to ensure that the product "ill be accepted successfully by the user# =n the other hand. *tern. http%@@1ulfanrauhandi#blogspot#com@2010@0A@gro"th'strategies'for'high'tech' firms#html > ? 2.$f "e rely on the e4tended 9nsoff :ro"th matri4 "hich helps to decide business strategy in terms of products and mar(et gro"th. and thus region "ealth gro"th. Porter. 2010 =n the one hand. #roduct development is the name given to a gro"th strategy "here a business aims to introduce ne" products into e4isting mar(ets# &his strategy re.ulfan <auhandi. M# +#. mainly because the business use to have little or no e4perience in those ne" mar(ets# For a business to adopt a diversification strategy. M# +#. M#. %iversification is the name given to the gro"th strategy "here a business mar(ets ne" products in ne" mar(ets# =bviously. starts to arise# Michael +# Porter introduced the notion of cluster an agglomeration of closely related industries ># $t "ill be one of the t"o countervailing economic forces that "ill be ta(en an important role later on region'industry performance gro"th? # 2 2:ro"th strategies for !igh &ech Firms3.ulfan <auhandi.lusters. *# (2010 2. it must therefore have a clear idea about "hat it e4pects to gain from the strategy and an honest assessment of the ris(s# Finally. convergence and economic performance3# 0elgado. M#. "e "ant to focus on three specific strategies related to the interaction bet"een the company and ne" mar(ets% #roduct development$ %iversification and &igh technology# Fig#1 +4tended 9nsoff :ro"th matri4 (*ource% . Porter. *tern. *# (200A 2 of 19 .lusters and entrepreneurship3 0elgado. the ris( inherent to the strategy is much higher than other scenarios. a necessity to identify mechanisms to foster the business gro"th.

"hen it "as evident in the "or( of 9lfred Marshall# &he cluster. the lin(age among these elements# PorterE emphasi1es that collaboration and competition among them can promote gro"th.ompetitiveness &eamC# .luster model as a (ey to promoting innovation in the target sector or stimulating ne" business initiatives and "ith this vision a myriad of clusters have been created in diverse areas of e4pertise% biotechnology.astellIn in *pain (referred to by Porter as an e4ample of a cluster able to compete "ith *aussuolo in $taly and *anta . defined as a Dgeographic concentration of business initiatives. since PorterBs (1990 The $ompetitive Advantage of (ations .alifornia.luster#pdf > of 19 . technological. this focus needs to be changed to create ne" business opportunities to compete against lo" cost resources and production in 9sia# Jearing in mind . but the underlying concept of agglomeration economies "as familiar to economists as early as the 1C90s. *#9# &echnology Par( Halles.astellIn tile and ceramic cluster in *pain has been greatly affected by the global financial crisis.luster &heory)3# Nasuyu(i Montoyama. and competitiveness# 9ccording to Porter. "hich has led many companies to close or be restructured# &he atomi1ed structure of the cluster meant that the main focus "as on production. competition. this is a conse. and consulting services # ># 0emand conditions (such as core customers # ?# <elated and supporting industries that include the rest of the listGfrom governments and universities to trade associations and e4perienced capital (i#e#. distribution and processes having less interest# !o"ever. venture capital # &he second aspect of the cluster is its interconnectedness A.lusters have enabled member firms to achieve important competitive edge in national and international mar(ets# Porter eventually opted for the .luster .uence of% 1# $ncreasing the productivity of companies# 2# 0riving the direction and pace of innovation# ># *timulating the formation of ne" businesses# 9n e4ample of one of the most important clusters is *ilicon Halley in .lusters' main characteristics. AF(F . 2002 http%@@"""#competitiveness#gov#/o@files@-hatO. and economic develop' ment% Local clusters in a global economy3 +conomic 0evelopment Muarterly. environment. $. M# +# (199C # 2Location. M# +# (2000 # 2-hat -as 5e" 9bout &he . "ith mar(eting. health .aterina in Jra1il . Porter. "e may reflect on some behaviours% E F A C 2.urrently. PorterE often provides a list of elements in a cluster but can be condensed in four factorsF% 1# Firms of a similar industry. its strategy and rivalry# 2# *upply conditions (such as suppliers and e4tending to legal. "hich is analysed by the Kordan .&. AA'90# Porter.Cluster model perspective &he notion of cluster to refer to business and economic environments has been around since the beginning of the 1990s. etc# scattered geographically on the basis of the different values of each of them# First. the . innovation.luster'based policies3 &he .ompetitiveness :roup.lusters and the ne" economics of competition3# !arvard Jusiness <evie". suppliers and associated institutions in a particular fieldB has played an important role in enhancing firmsB productivity# . 200C# 2. established in the 1990s on the basis of a group of technology companies that attracted venture capital investment and other companies# &he partnerships forged ( cross pollination have generated ne" business initiatives# 9nother e4ample is the tile cluster in the province of .

2outreactions3 (in'out and coopetition relationships (cooperating Q competing # $t stimulates and reinforce the =pen $nnovation actions# $t is a M$M= (Multi'input Multi'ouput entity# • • 9 P&he 0evelopment of the cluster concept ' present e4periences and Further 0evelopmentsP (200> 10 -i(ipedia.<M* . "e have been searching alternatives or improvements to current model. providers and citi1ens by means of 2interactions3 (out'in . and an improved alternative to Porter's . in their particular sector. ie "ithout prior planning and spinning around loo(ing for business opportunities# 8etels also suggests that a cluster location increases the efficiency and effectiveness of cluster firms# . customers. Kanuary 19FC.luster Model# )hat is the “Convoy Model”* The Convoy Model++ +' is a ne" approach to the region'industry innovation generation. Jer(eley. as it allo"s the involvement of different agents (companies. :#=# Mensch. accelerate the impact achieved of a pro/ect and strengthening the productivity of the processes involved# Jy good fortune. mar(ed by several authors in terms of the process of emerging clusters or ho" the model could be repeatable in other scenarios "ith success. entrepreneurs are dropped off on .' &hey are static elements. creating a cluster is a long'term process "hich means that the final cost could be higher than e4pected# Leaving aside the different perspectives about the Porter's .luster Model. "e met a very special person.luster location may mean that financial investment generates greater economic value than their opportunity costs# 9nother aspect to (eep in mind is the sustainability of a cluster once the initial phase has finished ("hen more support is needed and indeed. 12 P=n $ntegral . in order to P absorb the aroma of innovation environmentP# $n many cases. Rniversity of .ue idea that "e are comprehensively developing altogether# Prof# Mensch put for"ard a ne" concept% P The Convoy ModelP# &his ne" concept could become a revolution in the innovation arena in front of the former Porter's . governments. . :#=# Mensch.lusters are focused on specific products or services and (no"ledge areas aligned to their locationBs economic and industrial needs # 9s 8etels 9 states% DThe necessary condition for any kind of empirical work on $lusters is to find a consistent definition of what economic activities belong or should belong to the cluster’# ' &he movement that businesses follo" "hen they land in a .-or(ing Paper 5o# 2?E. in order to foster the innovation. "hich aims to be built over three main cornerstones% • $t is multidisciplinary and multi'synergic. February 19FCS both papers solve the governance and coordination problems of Pmoving in syncP and provide the mathematical proof (8uhn'&uc(er conditions of +4istence &heorem of Pmovements in convoyP # ? of 19 .alifornia. firms /oin clusters in the hope that this "ill generate ne" business.omplementarityP. institutions. Prof :# Mensch 10 "ith a very uni.<M* . http%@@de#"i(ipedia#org@"i(i@:erhardOMenschO($nnovationsforscher 11 P&he $nspection ProblemP. -or(ing Paper 5o# 2?1.luster belonging to their sector is rather P(rownianP. . Jer(eley.enter for <esearch in Management *cience. capable of gro"ing by appro4imation# &hat is.luster Model efficiency.lusters.enter for <esearch in Management *cience. in most cases by serendipity# ' .

also called the P locomotiveP of the convoy. M# +# (2000 # E of 19 . the .eystone entity of the Convoy Model 9s has already been mentioned. competition. continuous value creation. suppliers and others institutions increases the perception of innovation opportunities "hile amplifying the pressure for innovation1># !o"ever. and "hich "ill interact among them from inside to outside and vice versa# For instance. attracts other companies to be located close to it in order to ta(e advantage of the pro4imity "hen tac(ling a pro/ect# &hese satellite companies may belong to other sectors and disciplines and be engaged in activities related to the companyBs main mission# . and synergies# &he Convoy Model drives the elements in the innovation ecosystem via its main entity% the tractor# &he Convoy Model can be considered as providing the motion in a cluster" all the positive economic impacts highlighted by Porter (ne" /obs. these effects are amplified in the Convoy Model.onvoy Pro/ect surfaces t"o po"erful effects% 1> 2Location. since the groupBs entrepreneurial activity is focused on the needs of the DtractorB pro/ect# &he Convoy Model can be used to regenerate traditional sectors and traditional management techni. economic "ealth. and it is crucial to identify ho" many 2locomotives3 of the convoy "e do have (bearing in mind its M$M= 'Multi'$nput.o'location of these companies encourages coopetiting "or(ing (cooperating Q competing to"ards a common target# &he Convoy Model does not relate to a specific sector# $t can be li(ened to an articulated vehicle "hose total "eight is driven by the traction element (tractor .Fig#2 Fish'bone of tractor pro/ects (proprietary development &he Convoy Model is dynamic compared to Porter's static cluster modelS it is planned rather than evolving# $t acts as a magnet attracting collaboration and initiatives that enable continuous improvement. that pulls in one direction the co'location of related satellite agents around it. it "ill be similar to a consolidated and strongly innovative company that. customers.ues. etc# also apply to this ne" model# $n other "ords. Porter. "e "ould agree that the co'location of companies. "hich have been unable to adapt to the future# Tractor as the . Multi'output' nature # &he traction motion of a . and economic develop' ment% Local clusters in a global economy3 +conomic 0evelopment Muarterly.onvoy Model relies on a (ey entity D the tractor-# Jut "hat is 2the tractor3 of a pro/ect) The tractor is the driving unit of a pro/ect. once established.

<amon Llull Kournal of 9pplied +thics.onvoy Model and that "ill determine the traction motion process# OCTAGONAL INNOVATION ECOSYSTEM Market Internationalization &u'an Ca(ital )Talent! Net*orking! Entre(reneurs"i(+ Scienti c! Tec"nolog# an$ %usiness Culture Inno.uirementsS they must be capable of ongoing adaptation to changing re.uirements and ne" products.uires fle4ibility.luster Model# Social Capital generation+. Pablo <uT1.egeneration+ Infrastructures Territorial Integration Financing Fig#> =ctagonal $nnovation +cosystem (proprietary development &he =ctagonal $nnovation +cosystem is an evolved version of the *ilicon Halley ecosystem of innovation developed by &apan Munroe and Mar( -est"ind 1E and tries to cover the most relevant strategic a4es or cornerstones in the management of a *cience and &echnology Par(# 9ll the elements are interconnected because of the inherent relationship among them# &he same elements can be applied to "hichever pro/ect led by the *&P# &ow to manage a Convoy #ro2ect* &he pro/ect management methodology is crucial in the conte4t of this comple4 ne" model and re. &apan Munroe.ation )-i. as a conse.uence of the (no"ledge and information e4change among all the pro/ect participants# /eystones of the Convoy Model -e have identified a set of elements that conform "hat "e call the 2 0ctagonal 1nnovation Ecosystem3 "hich could be considered as the vital elements to develop pro/ects under the . Kob <odrigo. and uncertain# &hese deficiencies are vie"ed as opportunities for innovative actions# P+volutionaryP pro/ect management "or(s "ith inventions and visions of possibilities. Mar( -est"ind.. and scenarios about an Paugmented realityP# 1? 2$ntra'organi1ational social capital in business organi1ations% 9 theoretical model "ith a focus on servant leadership as antecedent3.uires a ne" perspective# Pro/ects are not implemented /ust to respond to user re.• • Cross-pollination among the agents and entities involved is also inherited from the .(2010 1E 2*ilicon Halley% &he +cology of $nnovation3.ersi cation! . also (no"n as 2evolutionary pro/ect management3# &he final goal may be different from the initial target based on initial user re. (200C $*J5% C?F12A2EA9 F of 19 . <icardo MartTne1. that is to say pro/ects performed based on continual feedbac(# &he theoretical basis of this sort of PevolutionaryP pro/ect management is comple4ity theory applied to comple4 realities "hen (no"ledge is lac(ing and available information is imperfect. a ne" pro/ect management paradigm and a &1ST 3&igh 1mpact$ Short Time4 philosophy.uirements# &his re.

and even more in those ones "here user re. every .uired and the appropriate measures. !irosgi =hta(a.asual Model that contributes to facilitate the recognition of *erious problem pro/ects (*PPs empirically and help to manage ris( symptom# -e are planning to incorporate this model to . Noshia(i Fu(a1a"a# Pro/ect Management Kournal.uantifying all the . the P9rt of $nnovatingP is finding a middleground bet"een overcomplicating and oversimplifying the potential.onvoy Pro/ects <is( Management# &hat's the case of . in such a "ay that "e "ill be able to get the J0& (Jest 0ecision &a(en "hen a problems arises# =hta(a and Fu(a1a"a1A have developed a very interesting model (. PM$ (March 2010 A of 19 .onvoy Pro/ects embed comple4ity in society.yclic . Manfred *aynisch.yclic . Mitigation #lan. PM$ (9pril 2010 1A 2Managing <is( *ymptom% 9 Method to $dentify Ma/or <is(s of *erious Problem Pro/ects in *$ +nvironment Rsing . must be ta(en# Pro/ect uncertainty is a very important challenge in the management of today's pro/ects. *elf'=rgani1ational Principles and the .onvoy characteristics related to its uncertainty is re. aspects of the pro/ect or organi1ation's environment that increase pro/ect ris(# &he ris( of failing to meet schedule.uired by the user and in some "ay because of the feedbac( from the results of its e4ecution # &he Pro/ect Management $nstitute's 9 :uide to the Pro/ect Management Jody of 8no"ledge U fourth edition (PM$.uirements are changing along time (in some "ay because of ne" functionalities re. if needed. .onvoy Models (proprietary development 1F 2Jeyond Frontiers of &raditional Pro/ect Management% 9n 9pproach to +volutionary. that this sort of comple4ity in .omple4ity &heory3.onvoy Pro/ects Management implies a strong focus on the design of an effective and efficient 5is. cost or performance goals is "hat ma(es uncertainty threatening# $t is not "orthless to say. in order to assess all the potential combinations of possible solutions or results of the interactions.&he differences bet"een Pactual realityP and Paugmented realitiesP form the Popportunity landscapeP "here con/ectures about the good opportunities for innovative initiatives guide the planning and e4ecution of pro/ects# Hie"ed in this "ay. 200C ' describes uncertainty as ris( conditions. economics and technology. and traditional pro/ect management can not therefore be used hereS instead. a set of ne" challenges and re. and in designing a road map for the pro/ect "or( "hile the intially vague Popportunity landscapeP gets clearer as "e go ahead# .uirements are bringing up in this (ind of special pro/ects "here dynamics of instability1F are present# $n general.asual Model3. Pro/ect Management Kournal.onvoy pro/ect "ill be different due to the variety of e4isting approaches.onvoy Pro/ects "hose approach is closer to Predictive 9daptive Models% Fig#? Predictive'adaptive schema of . but they all should be treated as similar in essence# 5evertheless.

and innovation# $ndeed another element that contributed to the innovation generation "as spillovers bet"een a regional industry and strong clusters present in nearby regions# &he .M (n should predict the perturbations and modify its behaviour based on the output results too# usr 2 3n4 is the interaction (from /V0 to M of the user over the results of the process . *# (200A 19 2Forecasting innovation performace via neural net"or(s U a case of &ai"anese manufacturing industry3. convergence and economic performance3# 0elgado. *tern.lusters. driving productivity and /ob creation.uirements and perturbations # pr i 3n4 is the perturbation function# &his function can not be modified so the transfer function .onvoy Model incorporates some additional elements that "ill reinforce its economic results% – – =ne is the power of complex networ.onvoy Model is a special case of Porter's clusters from the dynamic motional perspective.M(n Wpr i (n err3n4 05 feed3n4 is a logical =< operation "here the errors detected by the user or additional feedbac( provided by the user to improve the output result of the process . Porter. M# +#.M (n (also (no"n as user pattern function op i 3n4 is the 20utput result3 from the &ransfer function and the perturbations over the system V . the . as a conse. that "e are going to apply to demonstrate the high'level of innovation generation produced by 1C 2.M (n aggregate# 63n4 is the output final function once the system behaviour has been adapted and corrected# 1mpact of Convoy Model on 1nnovation 7eneration =ne of the main . M#. *hih'.uence of the fast'performing methodology that "ill help to increase the productivity of the resources used to build up .M (n or convoy model funcionality and "ill vary depending on the results of the feedbac( from the interaction% op i (n and usr / (n CM3n4 is the &ransfer function of the .s approach 19.s developed as a conse.uestions that could come up "hen implementing ne" models of innovation is ho" to measure their impact on regional performance# Porter1C demonstrated that strong cluster environment surrounding a particular region'industry enhanced gro"th at the region'industry level through increasing efficiency. in these (ind of pro/ects. &ai'Nue -ang.onvoy pro/ects# 9lthough there are several mechanisms to forecast and measure innovation performance.hien . investment. there is one particularly interesting% by means of neural networ.et of added!value deliverables produced # &he philosophy of this sort of pro/ects delivers high'impact results in a very short term (!$*& . so the same (ey performance indicators (8P$ should be considered as applicable in order to measure their impact on the region# !o"ever. that "ill feed the ."here% req i 3n4 is the set of initial and ongoing requirements.hien (200F C of 19 . and increasing returns to e4pansion.uence of the multiple interactions among all the agents and entities# &he other element is the reduced time!to!mar. from iV0 to 5.onvoy Model pro/ect and defines its behavior based on input data (initial re.

Holumen 1?.MartTne1'. 2000. "e "ould rather to e4tend the definition adding the follo"ing feature% “A Science and echnology Park should be able to identify and co-lead tractor pro&ects involving all the agents and entities belonging to the 'ctagonal (cosystem of )nnovation with the main purpose of generating wealth in the region and easing the ade%uate mechanisms to ensure the success achievement of the S*(s+ *&P become a very interesting scenario in "hich . F# (200A % +uropean Kournal of $nnovation Management. technologies. :ulati.onvoy Model pro/ects# Convoy Model 8anding at ST#s" Soft or &ard* =nce "e have defined the . P# (2010 % $nternational Kournal of Management 7 $nformation *ystems. 9 of 19 .onvoy Pro/ects under this current model# &he techni.heng 8ung Rniversity of &ai"an and it is perfectly e4trapolable to .onvoy Model3 and the po"erful capabilities of a *cience and &echnology Par(.s 3ST#4* Let's start remembering the definition of *cience and &echnology Par(. as "ell as ris( sharing20# *&P create a physical landscape that enables economic agentBs interaction "ithin the same geographical area20# -e consider that the relations bet"een firms and Rniversities can generate valuable organi1ational social capital21# *&P are an artificial physical structure that also facilitates interaction among the economic agents located inside22# 20 2*trategic net"or(s3.apital :eneration $nside *cience Par(s% 9n 9nalysis =f Jusiness'Rniversity <elationships3..onvoy Model landscape. 10 (> . 2000 21 2*ocial . pp# ?E'E0# 22 2*cience Par(s as 8no"ledge =rgani1ations% &he PJaP $n 9ction)3 !ansson. 5umero ?. mar(ets.ue "as applied by the 0epartment of $ndustrial and $nformation Management from the 5ational . scale and scope economies. the first . a Science Park stimulates and manages the flow of knowledge and technology amongst universities. 5ohria 7 . provided by $9*P (2002 % “A Science Park is an organisation managed by specialised professionals. !"# institutions. companies and markets$ it facilitates the creation and growth of innovationbased companies through incubation and spin-off processes$ and provides other value-added services together with high %uality space and facilities. o enable these goals to be met.onvoy Pro/ects could be placed and due to several reasons% • • • *&P are environments "here $& is straightfor"ard to develop and maintain relationships "ith other organi1ations# &hese interactions ease the access to (ey resources. <# y <ui1'Palomino.aXas. *trategic Management Kournal.aheer. advantages from (no"ledge and learning. information. “ Jearing in mind the strengthen of the concept% 2. whose main aim is to increase the wealth of its community by promoting the culture of innovation and the competitiveness of its associated businesses and knowledge-based institutions.uestion that could be brought up is% &ow could Convoy Model be used in Science and Technology #ar.

$n order to be able to ans"er the . Mats +ri(sson.astellon to participate in co'creating products and services.ue based on cro"dsourcing# &he Living Lab concept originates from M$&. Madrid 2? 2&he *ources of $nnovation3. "e are developing a Living Lab (called e'Living Lab located at the Rniversity . .ientTficos# Principales +4periencias $nternacionales. robotics. "or( cooperatively and coordinate their activities to achieve a superior performance in the mar(et# 0ue to the nature of the *&P environment.onvoy Model samples# Convoy *odel for e.ampus and open to the rest of the citi1ens of . +ric( von !ippel.ues . to develop ne" products and bring them to the mar(et "ith high success rates# &he (no"ledge that firms can derive from their relationships may be particularly valuable for the development of ne" products and services2?. validating and refining comple4 solutions in multiple and evolving real life contexts2E.reation a Pthin(ubatorP structure to set up an appropriate environment for the generation of ne" ideas. Joston and represents a user'centric research methodology for sensing. prototyping. +d# . Machine'to'machine communication and automatisms among others# &hrough open collaboration bet"een a large variety of participants (main step to generate open innovation .onvoy Model "here decisions are made about specific goals and their achievement is supported by numerous agents in a Dfish'boneB structure as the one already depicted at the beginning of the paper# &he implementation of the Living Lab is based on the involvement of the user (firms. *cience and &echnology Par( of . not as case studies but as .astellon.-iving -ab ractor Pro&ect Living Lab is a user co'creation techni. =4ford Rniversity Press (19CC 2E 2*tate'of'the'art in utili1ing Living Labs approach to user'centric $.• *&P is a magnet for heavy investment in technology# 9 par( attracts business dedicated to applying innovative technology2># &his fact can help researchers to e4plain "hy and ho" organi1ations connect effectively. Heli'Pe((a 5iitamo and *ei/a 8ul((i## (200E 10 of 19 . organi1ations and consumers in the innovation process# 9t espaitec.onvoy Pro/ects "ill enhance the ability of the companies involved in the pro/ect.& innovation U a +uropean 9pproach#3. some actions have to be ta(en% • • . e'Living Lab does not favor any specific technology but rather focus on fostering inter' collaboration among all of them and capturing the values of technology based on the usefulness that it bring# >?C'>FF# 2> 2*uccess factors in *cience and &echnology Par(s3 !odgson. J (199? # +n *cheifler MY 9# Los Par. Living Lab is a good e4ample of a . determination of main goal of the pro/ect and identification of agents and entities to be involved# =nce designed. it can be implemented in the very short term based on 2evolutionary pro/ect management3 approach and using the appropriate mechanisms to put it on place# -e are going to briefly mention t"o tractor pro/ects launched at espaitec *cience and &echnology Par(. prototyping and validating them in several technology fields% biotechnology.ivitas.uestion about% ho" ne" tractors emerge.

these investors desire an increased upside potential from the innovation pro/ect.astellon# &he pro/ect's goal "as helping the innovating company. . ma(ing the pro/ect less interesting# 9nd. and their testing for biomedical efficacy# &he (ey point is that tractor pro/ect managers need the . and the application of proprietary plant bioinformatics in the selection and prototyping of plant varieties. this happens "hen the pro/ect is so attractive. thus lo"ering the probability of success of the innovation pro/ect# &his is the basic dilemma of all innovators# 9nd there are t"o issues that ma(e the basic dilemma more complicated% $f the innovation is a ma/or innovation (and not /ust a minor one . not as a case study because it is still running# &he pro/ect started in 2010 at the espaitec. thus forcing investees to formulate prudent and conservative initial specs.uality testing and pac(aging the natural drug. it tends to pull'in additional uncertainties from une4pected side lines# For e4ample. forcing investees to formulate overly ambitious sets of initial specs.uires application and hybrid integration of brand ne" green biotechnology in the selection of medicinal plants. the rational integration of all that comple4ity "ith the convoy model# *o that the fully integrated +nterprise <esource *ystem and the fully integrated . that it . thirdly. the initial set of specifications of the desired output of the innovation process is vague# &his vagueness is directly proportional to the initial lac( of specific (no"ledge (validity and the lac( of confidence in the initial (no"ledge (reliability # -hat adds to this initial vagueness is an organi1ational uncertainty that stems from a double'bind situation most innovation financiers (private as "ell as public find themselves in% &heir innovation fonds investors "ant t"o contradictory things at the same timeS they "ant ris( reduction. the trans'rapid "as delayed years and years because each time something "ent "rong. the set of final specs includes three Pchun(sP% $ntegrating ne" green biotechnology of medicinal herbs "ith life science soil bioinformatics that is the platform for harvesting the natural drug material.ioPharma ractor Pro&ect &his is another e4ample. (no"' 11 of 19 .Convoy *odel for . and has so much traction (pull po"er . on the other side of the supply chain. and the processing. in designing and in constructing an innovative phytopharma factory in the . the issues of uncertainty.onvoy Model for steering the efforts at higher validity and reliability. on the other hand. the PevolutionaryP pro/ect not only integrates several converging technologies at the material level of the pro/ect.ualifies as a tractor pro/ect that has the potential of bringing'in a ma/or innovation# 9nd in order to ma4imi1e the up'side potential over and above the initial PsafeP specs. lac( of initial (no"'ho". if successful. on the one hand.astellon area# &he biopharma product innovation is a natural medicine (medicinal herb that re. it "as some supplier's conventional part that "or(ed "ell in traditional /obs but failed "hen inserted into the innovational conte4t "here its initial validity and reliability assumptions proved "rong# $n short. on one side. the shareholders and the sta(eholders of the pro/ect must govern all "or( to move in convoy (value'directed push and pull # &his basic dilemma invites to state the (ey point in PevolutionaryP pro/ect management% 9s everyone is interested in improving the set of initial specifications to meet higher goals in the end than appeared permissible at the start. Mensch Jiopharma. plus. it also integrates t"o governance tools at the leadership level of the pro/ect# $n our e4ample of evolutionary planning of the Mensch Jiopharma phytopharmaceutical production facilities.ustomer <elationship *ystem "or( seamlessly hand in hand# &he pro/ect is PevolutionaryP in the sense that li(e in any innovation pro/ect. and the innovator'entrepreneur needs the technical pro/ect management s(ills that characteri1e a tractor pro/ect# $t "or(s both "ays "hen it "or(s# $n other "ords. *cience and &echnology Par( of .

for e4ample. let us differentiate further# For e4ample.e value!adding contributions to quality of life and to more income and growth 12 of 19 . he "as referring to the 8ennedy time."hat and "hat'not (validity. the national goal "as formulated as Pgoing to the moonP# &hat "as PvagueP enough for the time# For some. "here it "ould go up in flames and evaporate "hen re' entering the earth's atmosphere# =ver and above the Pun'mannedP versions. at the beginning of the planning process# Jefore digging deeper into PevolutionaryP pro/ect management. ho" to Pbring the astronauts bac( home aliveP# 9acit" Evolutionary product management can ma. although in practice the phases overlap "hen initial goals are being set higher and higher as Pfor"ard learningP permits# &he practical case e4ample presented here prompts us to differentiate levels of ambitions for the set of provisionally adopted final specifications that say "ith validity and reliability. and "e can estimate costs and revenues# &hus "e shall concentrate upon the planning stage of evolutionary pro/ect management and set aside details about the e4ecution phase. "hen initially. reliability must be addressed strategically. most ambitiously. calling it an actual P*putni(P challenge. the PmannedP versions of the 9pollo pro/ect clearly became a PrevolutionaryP pro/ectS and it too( the professionals at least a year until they "ere able to formulate a more ambitious initial set of specifications that "ould fit the ultimate goal% P&o set foot on the moon and bring the astronauts bac( home aliveP# $n this paper. our tractor pro/ect is PevolutionaryP and certainly not PrevolutionaryP# 9nd "e can precisely state the Pconvoy conditionsP for success on a more modest level of aspiration (9 versus a more ambitious level of aspiration (J . let us separate notions of evolutionary from notions of revolutionary# -hen in February 2011 R* President Jarac( =bama "as referring to the challenges ahead in the innovation field. it meant sending an 9pollo roc(et so far up that the space vehicle "ould fly beyond the moon and disappear in outer space# For others. in 19F1. it meant that the space craft "ould circle the moon once and then return to earth.

nevertheless "e discovered that tools li(e . introduced in this paper. the measurement of efficiency and results is not easy due to the large number of variables and uncertainty managed. as Peter 0ruc(er already stated% 2 1f you can:t measure it$ you can:t manage it 3. for the creation of "ealth in the region# *amples li(e the Living Labs developed at espaitec or JioPharma &ractor Pro/ect.onvoy Model poses the value'added by reinforcing the fact that hybridi1ation (on all its forms and shapes is the (ey for generating e4treme innovation (6trevation and. are /ust e4amples about ho" a innovative philosophy of hybridi1ing agents. that is to say% it is crucial to develop techni.eural . industries and (no"ledge can be successful "hen developing a strategy to achieve a goal# &hese pro/ects are still in developing phase so "e e4pect to get some results in a short term# Jut. entities.etwor.s are suitable mathematical models to forecast and assess the innovation performance in these cases# -e could find others though# 1> of 19 .ues that allo" us to measure the impact of innovative methodologies# $n these type of high'comple4ity pro/ects. thus. and above all ho" *cience and &echnology Par(s can play an active role as a tractor entity of those pro/ects as "ell # . but a "or(ing case paper and a alive reflection about ho" ne" models of innovation generation can foster the economy in a region (that should be the main goal of any *cience and &echnology Par( .onvoy Pro/ects "hen applying the model.Conclusions &his paper does not aim to be a case study of different e4amples of .

the core competency in evolutionary pro/ect planning is designing a road map for the pro/ect "or( that morphs the intially vague Popportunity landscapeP into a successively clearer innovation potential as the innovations team moves on# -hat 8enneth 9rro" some F0 years ago called 2Learning by 0oing3 in a (neoclassical -alras +conomy "ith mostly homogeneous goods and little or no innovation and entrepreneurship is no" conceived as 2For"ard Learning3 in an (evolutionary *chumpeter +conomy "ith more and ma/or innovations that re. and to loo( for enough comple4ity.9nne4 $% Methodological Foundation of +volutionary &ractor Pro/ect Management . and uncertain# &hese deficiencies are vie"ed as opportunities for bold innovative actions that re.uent section# P+volutionaryP pro/ect management "or(s "ith technological inventions and visions of commercial possibilities. for finding safe grounds for forming a business structure and formulating the business strategy# $n the follo"ing section.onlinear %ynamic Complexity Theory < (asis for the Evolutionary =pproach &he theoretical basis of PevolutionaryP pro/ect management is comple4ity theory applied to comple4 realities "hen (no"ledge is lac(ing and available information is imperfect. but not too much and not too little.uire that a PbunchP of innovators move in convoy. chaos versus partial order. the gist of PevolutionaryP pro/ect management is to recogni1e comple4ity by its t"o most prominent characteristics. and "ith scenarios about an Paugmented realityP# &he differences bet"een Pactual realityP and Paugmented realitiesP form the so'called Popportunity landscapeP "here con/ectures about the good or great opportunities for innovative initiatives guide the planning and e4ecution of pro/ects# $n the ne4t section entitled 2coping "ith comple4ity of contents and conte4ts3 "e delineate a comple4ity theoretical frame"or( for structuring the business model and for strategi1ing about 20oing the right things3 and about 20oing things right3 "ithout getting over"helmed by too much comple4ity# Hie"ed in this "ay.uire an evolutionary Microfoundation# $n the follo"ing t"o sections 2coping "ith comple4ity3 and 2mathematical basis of the convoy model3 "e delineate *trategy'*tructure' *teering'Performance aspects of such a Microfoundation thatBs consistent "ith evolutionary Management *cience# +volutionary tractor pro/ect management is a challenge for management science# =ne challenge is to find an economically sustainable mi4 of comple4 vs# simple# 9s an e4ample for such middleground. it is often said that one bird in the hand is better than three birds in the bush# Jy the same to(en. the P9rt of $nnovatingP boils do"n to finding a middleground bet"een overcomplicating the conte4t for "orth"hile actions and oversimplifying the innovation potential and missing the best opportunities# $n a nutshell.uires 2for"ard learning3 not only in 2actual reality3 but also in an 2augmented reality3 as the actuality changes (transforms faster and faster# &ypically both the content of an 2actual3 reality can change fast. ma/or innovations re. and synchroni1e their steps. "e illustrate this approach by loo(ing a some graphs of various degrees of comple4ity e4pressed by the most outstanding features of regularity in comple4ity% PRnityP and P*ymmetryP# &hese features help the hunter to catch one bird at a time and not to get side'trac(ed by the birds in the bushes# &ypically. moving Pin synchP# . and the conte4t morphs# &his dual comple4ity calls for a nonlinear dynamical programming methodology for the planning stage of such pro/ects# &his is e4plained in the subse.uire 2for"ard learning3 to find and sei1e the opportunities# $n the cases of 2ma/or3 innovations. such for"ard learning is double'complicated as it attracts other innovators and pulls other innovations along for the better or the "orse# *uch 2ma/or innovation3 pro/ects typically turn into 2+volutionary &ractor Pro/ects3# &his contingency re. namely.

alifornia. it operationali1es evolutionary opportunities in a nonlinear dynamical programming frame"or( for evolutionary tractor pro/ect management# $n short. there is a great benefit in presenting the comple4ity of an Popportunity landscapeP graphically. it helps achieving in the *trategy'*tructure (*'* and *teering'Performance (*'P management policy frame"or( "hat 8en 9ndre"s suggested% Learning of P0oing the right thingP and Learning of P0oing things rightP in the Planning and +4ecution of &ractor Pro/ects# . using the t"o "holistic features PRnityP and P*ymmetryP as "ays to sho" different degrees of comple4ity# $n our brains. and Mensch. "hich deals "ith given /obs and perfect information# Later. . Jer(eley.<M* .<M* . -or(ing Paper 5o# 2?1. .onvoy Model of motion in space and time.&his is the core of Mensch's .onvoy Model in his doctoral "or( on /ob'shop scheduling. these features represent memories.omplementarityP. he e4tended this scientific "or( on Pmoving in synchP to some *ilicon Halley innovation processes "here P/obsP are defined as overcoming Plac( of (no"ledgeP "hen information is scarce or impossible to find under the space'time circumstances# &his is the special relativity theory of innovation on t"o levels. :erhard Mensch conceived of the &he . and Pchun(s of (no"ledgeP# Finding such 2chun(s3 by organi1ing for"ard learning is the evolutionary 2Function of the +4ecutive3# &he mathematical basis of this Microfoundation and Management *cience orientation is being defined at the end of this part of the paper# $n a nutshell.enter for <esearch in Management *cience. Jer(eley. and li(e a song can paint one thousand pictures in oneBs imagination. in *tanford and Jer(eley. Kanuary 19FC. P&he $nspection ProblemP. P=n $ntegral .enter for <esearch in Management *cience. and finding opportunities for entrepreneurial innovations# =riginally. -or(ing Paper 5o# 2?E. Rniversity of . on the leadership level and the division of labor level (see :#=# Mensch. February 19FCS both papers solve the governance and coordination problems of Pmoving in syncP and provide the mathematical proof (8uhn'&uc(er conditions of +4istence &heorem of Pmovements in convoyP # Kust li(e a picture says more than a thousand "ords.

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especially 5onlinear 0ynamical Programming "ith integrating For"ard Learning on both the governance level (the +4ecutive &eam and on the division of labor level ($nnovation &eams # &his Management *cience Jasis is platform of the *trategy'*tructure'*teering'Performance (***P ' Paradigm in Jusiness 9dministration# $n general terms. "hile successive "aves of innovations made structural changes in industries and mar(ets more radical (disruptive than ever before# &hat put greater pressures on the *trategy' *tructure (*'* level of enterprise at the top and on the *teering'Performance (*'P level of enterprise at the "or('flo" level of enterprise# 9nd many formerly 2mundane3 pro/ects turned into 2tractor3 pro/ects "ith 2evolutionary3 re.onvoy Model for &ractor Pro/ects &he Mathematical Jasis of the 2evolutionary3 methodology used in the .Z. "ith greater emphasis of shareholders on 2outperformance3 by managers and "or(ers# &his is the state of affairs in 2011# &here is a great need for improving the 29rt of $nnovating3 in "ays that are consistent "ith ne" economic Microfoundations and Management *cience# &he 0ecomposition Principle composes three 2chun(s3 of functions into an 2evolutionary3 frame"or(% 5onlinear 0ynamics of (9 the *'*'Functions of the e4ecutives.2Z5# *teering means activating (4(i/ V1 and deactivating (4(i/ V0 these connections in relativity to contents and conte4ts. and of (J the *'P' Functions of the "or(force. the coordination function (**'*P # &he structuring frame"or( for strategic decision ma(ing (9 and operative decision ma(ing (J "as s(etched in section 2. and scheduling these activities to"ards attaining higher goals in the end than appeared feasible at the start.t form a cost'efficient and benefit'effective activity program% 9n evolutionary tractor pro/ect# . given the initial state of (lac(ing (no"ledge# &ractor pro/ects are scheduling such search and learning activities. by integrating and pulling along other (often minor innovations# &he attraction of the tractor is usually a headstart in the possession of some 2chun( of (no"ledge3# &he +volutionary 0y' namical Programming method optimi1es the strategic for"ard learning of the entire convoy# $t helps coordinating and steering the ac. &iming of ne" product initiatives.1.t controlled by some mature business strategy *(4 # $n the 5onlinear 0ynamic Pro' gramming frame"or( these state variables are lin(ed by connections 4(i/ for i. implement' ting this (no"ledge into the scheduling of activities at times t such that the activated 4(i/. aiming at a ma/or innovation./ V 0. 19AE to 2000.uisition of ne" 2chun(s of (no"ledge3. the ***P'Paradigm became more and more 2evolutionary3 as many product life cycles accelerated and got shorter.omple4ityZ3# &he (ey variable is 5 for 4(i V 0.2.1. and (. the ***P'Paradigm had been conceived t"o generations ago as a norm for 2&he Function of the +4ecutive3# &his norm strongly emphasi1ed corporate leadership (*trategy and operative results (Performance # $n later years.5# $n evolutionary terms.9nne4 $$% Mathematical Jasis of the . the aspects of *teering. and *tarting such activities in synch "ith mar(et timing and in anticipation of industrial changes is by far more complicated than coordinating traditional e4ecutive functions "ith stationary state vari' ables 4(i.uirements.oping "ith .onvoy Model as applied to the *teering of &ractor Pro/ects in case of ma/or innovations is the 0ecomposition Principle of mathematical programming.