MMT6008/BMA5252: Technology Strategy

Semester 2, Year 2003/4 ( Jan-Apr 2004).
Tuesdays 6-9pm, [MBA timetable]
NUS Business School Semianr Room SR2 [map]

Kwanghui Lim


Assistant Professor
NUS Business School
National University of Singapore
Singapore 117592
Republic of Singapore.


Office Hours: by appointment (please email)


This course explores the basis of competition in high-technology industries.  It introduces conceptual frameworks based on cutting-edge research in economics and strategy.  The frameworks may seem abstract at first, but students who master them will gain an in-depth understanding of how high-technology industries work and how to develop strategies for managing firms in such industries.  Students will learn how to apply such frameworks through case studies, computer laboratory exercises and an in-class negotiation exercise. Groupwork faciliates learning from your peers, and a final paper allows you to explore topics you care about.

The focus of this course is on the strategic issues around how a firm should manage its technology. Strategic issues include understanding the technological and competitive landscape, incentives to innovate, alternative commercialization paths for a new technology, ways to compete in the high-tech marketplace, resource allocation and R&D investment decisions, and managing factors that hinder or promote the diffusion of a new technology.

This course is NOT...

  • This is NOT a course on new product development, human resource issues, high-tech entrepreneurship, or national technology policy. Those issues are addressed in passing, but the central issue here is managing strategy in a high-tech environment.
  • This is also NOT a course on corporate strategy. Instead, it examines strategic issues in the context of high-technology industries. So the tools learnt in a basic strategy course such as "Porter's Five Forces" will not be covered here. MBA students should think of Tech Strategy as an important follow-on module after having taken the core strategy course.
  • This is NOT a course on Information Technology, per se, although it does include examples and cases from that industry. The main focus is on strategic and managerial issues.

This is a challenging but ultimately rewarding course.  You will be expected to understand the key theoretical and empirical results in research articles published in strategy and economics journals.  However, you are not expected to derive mathematical models.  The main goal is to relate these readings to what steps a manager or high-tech entrepreneur should take to develop a technology strategy for his/her organization.

There are four segments to this course (see detailed syllabus below).  The first part is on the productivity impact of technology, patterns of technical change, diffusion of innovation and knowledge spillovers.  The second part of the course examines the relationship between technology and market structure and strategies for competing in high-technology markets.  The third segment of the course is on investing in and developing R&D capabilities.  Finally, the ideas presented in the course are integrated through case studies and an in-class negotiation exercise.  Overall, the early part of the course is loaded towards conceptual papers while the later part is weighted towards applications.

  • This class is for MBA, MOT and M.Sc students.  There are no pre-requisites, however interested students would benefit from having taken an introductory courses at the undergraduate level in Microeconomics. Some background in Management of Technology (e.g. MMT5002) would also be helpful.  Students without these backgrounds may have to do a few additional readings to catch up (these are listed as “review” in the reading list below).
  • Ph.D.(Management) and M.Sc. (Management by research) students who exposure to the literature on technology strategy are welcome to participate.  However the requirements and grading will be different (see below).
  • Cross-faculty and exchange students are welcome. You should apply through your department office and ask them to register you for the course via the NUS Business School MBA program office.


I. MBA/MOT/M.Sc/Cross-faculty students:

  • Class Participation (30%). Students are expected to analyze the readings and case studies and contribute to class discussions. Each week, several students will lead parts of the discussion. Around 2 hours of preparation time is required for each session.  Please do not come to class unprepared or you will learn very little (and be embarrassed when asked to discuss an issue).  The first week does not count towards class participation.
  • Group Project (30%).  Students will be divided into groups of around four persons.  Each group will select a company in a high-tech industry and propose a technology strategy for that firm.  You are welcome to use additional resources, such as databases, internet searches and news articles.  A short report not exceeding 30 pages is due by the second-last week.  Each group will make a brief presentation of their findings in the final week (week 14).
  • Final Paper (40%).  Each student must write a final paper (there is no exam!). The topic will be assigned by the instructor (although you are given the option to propose your own topic instead). It is usually a case analysis and includes several questions encompassing many of the issues discussed in class. 

    • The paper should not exceed 30 pages long.
    • You will be graded on relevant applications of ideas covered in this course (15%), thoughtful analysis (15%) and creativity (10%)
    • This is an individual assignment- do not discuss it with anyone else or get other people to help you. NUS uses an anti-plagarism service, so please DO NOT COPY or DISCUSS your paper with anyone.
    • Post your paper on IVLE. Do not email it to me. Only you can view your own final paper on IVLE.

All assignments should be submitted electronically to facilitate sharing and learning.  The page layout should be A4-sized, with line spacing set to 1.5 and font size 11 or above.

II. For PhD and M.Sc(Management) students:

  • Regular attendance.
  • A research-oriented paper to be discussed with the instructor (100%).  For example, this paper could present a critical literature review and propose a research study.

What to do if you missed class:

  • If you cannot make it to class, inform the instructor for that week via email, download the class slides after class, and spend 10 minutes with a classmate who did attend to learn what you missed.
  • If you are absent for a valid reason, you can make up for your class participation score by writing a short online paper on the topic that you missed. It should not just be a regurgitation/summary of that topic, but rather your own analysis and extension of it. Your paper should clearly indicate which class it was meant to make up for, and you should post it on IVLE. Make-up papers must be submitted within one week of the missed class.
  • Note that the 1st week does not count towards class participation.
  • Textbooks: You are not required to purchase any textbooks.
  • IVLE eLibrary: The main readings are available in digital format via IVLE. The NUS Library has obtained copyright permission for you to download and view them. Please follow the terms of use stipulated on IVLE. This service is provided free of charge.
  • Xanedu: You will be required to purchase an online coursepack from It will cost approximately USD40. It looks like this.

Additional references:


This reading list builds upon courses taught by Rebecca Henderson (MIT) and Scott Stern (Northwestern University).


I.                     Technology: Productivity and Diffusion

II.                   Technology, Markets and Competition

III.                 Creating R&D Capabilities

IV.                 Applying the frameworks


Symbols used are explained at the end of this document [click here]

Topic and Readings
PART 1: Technology: Productivity Impact and Managing Diffusion
Week 1
6 Jan 2004

i.      What this course is about.

ii.      Science, Technology and Productivity

  • Read: Solow, Robert M. (1957), “Technical Change and the Aggregate Production Function,” Review of Economics and Statistics, 39(3), pp 312-320. [IVLE eLibrary]
  • Skim: Williams Easterly (2001), The Elusive Quest for Growth, MIT Press. The entire book is available online for free to NUS staff and students [NUS library].
  • Optional: Nelson, R.R. and Gavin Wright (1992), “The rise and fall of American technological leadership,” Journal of Economic Literature, Vol. 30 Issue 4, p1931-1965 [IVLE eLibrary]
  • Optional: World Development Report 1998 [web].
  • Optional: Griliches, Zvi (1998), R&D and Productivity: The Econometric Evidence, Chicago: Chicago University Press.

Week 2
13 Jan 2004


Knowledge Spillovers and Learning Curves
  • Read: Linda Argote and Dennis Epple (1990), "Learning Curves in Manufacturing," Science, New Series, Vol. 247, No. 4945. (Feb. 23, 1990), pp. 920-924.[IVLE eLibrary]
  • Read: Griliches, Zvi (1992) “The Search for R&D Spillovers,” The Scandinavian Journal of Economics, 94(Supplement): 29-47. Free download from NBER [pdf].

Hands-on computer laboratory exercise on learning curves and spillovers

Optional and review articles:

  • Review: Utterback, James. (1994). “Dominant Designs and the Survival of Firms”, Chapters 2 in Mastering the Dynamics of Innovation, Harvard Business School Press, pp 23-55 and pp 79-102. [IVLE eLibrary]
  • Optional: Learning Curves, Chapter 3 of The Practice of Econometrics: Classic and Contemporary, Ernst R. Berndt, Addison-Wesley, 1990.
Week 3
20 Jan 2004
Diffusion of Technology
  • Read: David, Paul (1990), “The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox,” American Economic Review, Vol. 80(2), pp. 355-361. [IVLE eLibrary][Jstor]
  • Read: Rogers, Everett M. (1976), "New Product Adoption and Diffusion,", The Journal of Consumer Research, Vol. 2, No. 4. (Mar., 1976), pp. 290-301.[IVLE eLibrary][Jstor]
  • Prepare: HBS Case Study: EMI and the CT Scanner (A) [Xanedu]

Optional and review articles:

  • Review: Foster, R. (1986). “The S-curve: A New Forecasting Tool.” Chapter 4 in Innovation, The Attacker's Advantage, Summit Books, Simon and Schuster, New York (NY).  pp. 88-111. [IVLE eLibrary]
  • Optional: Griliches, Z. (1957), “Hybrid Corn: An Exploration in the Economics of Technological Change”, Econometrica, Vol. 25, No. 4., pp. 501-522. [Jstor]
  • Optional: Jaffe, Adam B., Manuel Trajtenberg and Rebecca Henderson. (1993) “Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations,” Quarterly Journal of Economics, August 1993, Vol. 434, pp 578-598. [Jstor]
  • Supplementary: Rogers, Everett M. “Innovativeness and Adopter Categories”, Chapter 7 in Diffusion of Innovations (3rd edition), The Free Press, 1983, pp 241-270.
PART 2: Technology, Markets and Competition
Week 4
27 Jan 2004
Incumbents and Entrants
  • Read: Henderson, R. (1993). “Underinvestment and Incompetence as Responses to Radical Innovation: Evidence from the Photolithographic Alignment Equipment Industry,” Rand Journal of Economics, 24(2). Read pages 248-252 and Figure2; skim the rest.[IVLE eLibrary][Jstor]
  • Read: Kwanghui’s summary of Incumbents vs Entrants [IVLE Readings Workbin]
  • Case Study: Eli Lilly & Company: Innovation in Diabetes Care (HBS# 9-696-077) [Xanedu]

Optional Readings

  • Skim: Tirole, Jean (1988), The Theory of Industrial Organization, Cambridge(MA): MIT Press, chapter 10, pp. 389-414
  • Optional: Gilbert and Newbery (1982), “Preemptive Patenting and the Persistence of Monopoly,” American Economic Review, Vol. 72(3), pp. 314-26. [Jstor]
  • Optional: Reinganum, J. F. (1983), “Uncertain Innovation and the Persistence of Monopoly,” American Economic Review, Vol. 73, pp. 741-48. [Jstor]
Week 5
3 Feb 2004

Commercialization I (Intellectual Property and Complementary Assets)

  • Review the following websites about patents, copyrights, trademarks, secrets:
    • IPOS Spore - read the ABOUT IP section [ipos]
    • US Patent Office [uspto]
    • US copyright office, para 1&2 [click]
  • Read: Gans, J. and Stern, S., “Managing Ideas: Commercialization Strategies for Biotechnology”

Optional Readings

  • Review: Teece, D., “Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing and Public Policy,” The Competitive Challenge, 1987.
  • Optional: Teece, David J., “Capturing Value from Knowledge Assets: The New Economy, Markets for Know-How and Intangible Assets,” California Management Review, 1998, Volume 40, No 3, Spring 1998, pp 55-78.[IVLE eLibrary]


Week 6
10 Feb 2004

Continued from last week...

  • Case Study: IDEO Product Development (HBS#9-600-143) [Xanedu]

Network Externalities

  • Carl Shapiro and Hal Varian (1999), Information Rules (chapter 7), Boston: Harvard Business School Press. [IVLE eReserve]
  • Besen, S. and Farrel, J (1994), "Choosing How to Compete: Strategies and Tactics in Standardization", Journal of Economic Perspectives, Vol. 8, No. 2. (Spring, 1994), pp. 117-131. [Jstor]

Optional Readings

  • Optional: Arthur, W.B., “Competing Technologies: An Overview,” in Dosi, G. et al., Technical Change and Economic Theory, (New York, NY: Columbia University Press, 1988). [an advanced version is published in the Economic Journal and available from Jstor].

Week 7
17 Feb 2004

Continued from last week...

  • Case Study: Atheros Communications (HBS #9-802-073) [Xanedu]

Commercialization II (Strategy)

  • Readings (to be determined): Kwanghui Lim and David Hsu, "Commercialization of the Cohen-Boyer Patent"
  • In-class project on commercialization.

Optional and Review Articles

  • Optional: Shane, S. (2001), “Technology Regimes and New Firm Formation,” Management Science 47(9), pp 1173-1190.
  • Optional: Raymond, Eric, “The Cathedral and the Bazaar” available at:
Week 8
24 Feb 2004

Competing in High-tech Service industries

  • Roger Schmenner (1986), "How can Service Businesses Survive and Prosper", Sloan Management Review.
  • Berry and Yadav (1996), "Capture and communicate value in the pricing of services", Sloan Management Review, June 1996.
  • In-Class Debate: Should online financial service firms enter the Asian Market including Singapore? And if so, how?
  • Case Study: Charles Schwab in 2002- (HBS #9-803-070) [Xanedu]
PART 3: Investing in R&D capabilities
Week 9
2 Mar 2004

Incentives to Innovate

  • Read: Aghion, P. and J. Tirole (1994), "The Management of Innovation", Quarterly Journal of Economics.  pp. 1185-1209.[Jstor]
  • Case Study: Xerox Technology Ventures: March 1995 (HBS #9-295-127) [Xanedu]

Optional readings:

  • Optional: Katz, M.: “An Analysis of Cooperative Research and Development,” Rand Journal of Economics, Vol. 17, No. 4, Winter 1986.[Jstor]
  • Optional: Holmstrom, B. (1989).  “Agency Costs and Innovation,” Journal of Economic Behavior and Organization, Vol. 12(3).  pp. 305-327.
Week 10
9 Mar 2004
Investing in basic/applied research; Real options and other approaches


  • Read: Dixit, A. and Pindyk, R., “The Options Approach to Capital Investment,” Harvard Business Review May/June 1995.[Xanedu]
  • Read: “Get Real” paper:
  • Review: Cohen, W.  and D. Levinthal (1990). “Absorptive Capacity: A New Perspective on Learning and Innovation,” Administrative Science Quarterly, Vol. 35.[Jstor]
  • Case Study: Intel Capital and Berkeley Networks (HBS #9-600-069). [Xanedu]

Optional readings:

  • Optional: Cockburn, Iain and Henderson, Rebecca: “Absorptive Capacity, Coauthoring Behavior, and the Organization of Research in Drug Discovery,” Journal of Industrial Economics, June 1998, Volume XLVI, No. 2. pp. 157-182.
  • Optional: Kwanghui Lim (2004), "The Relationship between Research and Innovation in the Semiconductor and Pharmaceutical Industries (1981-97)", Research Policy, Vol. 33, No. 2, pp. 287-321.[download]
PART 4: Applying the Concepts and Frameworks
Week 11
16 Mar 2004


In-Class Computer Laboratory exercise:

  • R&D Investment Decisions: Applying the NPV, Real Options and Scenario-Planning Frameworks

Case study using all the concepts learnt this semester:

  • Case Study: Surface Logix (HBS #9-802-050). [Xanedu]


Week 12
23 Mar 2004

IMPT: Group Project Report due by 5pm Today. Please submit to IVLE Workbin.

In-class Negotiation Exercise

  • INSEAD-CEDEP Case: Advanced Drug Delivery Systems: Alza & Ciba-Geigy (A, B and D) [Xanedu]


  • ADDS (A) is an overview of the industry and technology. ADDS(B) presents details of the 1978 detail. ADDS(D) is an update 5 years later.
  • Optional: Alza(Synopsis) and Ciba-Geigy Pharma (B).
Week 13
30 Mar 2004
Group Project Presentations and Conclusions
  • Group projects presentations
  • Wrap up

Final Papers are due next weekend.

Reading Period: Mon 5 Apr 2004 - Sat 10 Apr 2004
Examination: Mon 12 Apr 2004 - Sat 24 Apr 2004. This course has no final examination.

Symbols Used: