nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2013‒11‒02
eleven papers chosen by
Arvi Kuura
Parnu College - Tartu University

  2. Research into Ambidextrous R&D in Product Development New Product Development at a Precision Device Maker By Mitsuru Kodama; Tomoatsu Shibata
  3. Coordination of joint search in distributed innovation processes: Lessons from the effects of initial code release in Open Source Software development By Francesco Rullani; Francesco Zirpoli
  4. Breaking Up a Research Consortium By Niedermayer, Andras; Wu, Jianjun
  5. The conditions of efficiency of a PPP for public finances By Alain Bonnafous; Bruno Faivre D'Arcier
  6. Using information markets in grantmaking. An assessment of the issues involved and an application to Italian banking foundations By Edoardo Gaffeo
  7. Developing a Dominant Logic of Strategic Innovation By Sammut-Bonnici, Tanya; Paroutis, Sotirios
  8. Processos de Obtenção de Tecnologia Militar By José Carlos Albano do Amarante
  9. Desenvolvimentismo, Conflito e Conciliação de Interesses na Política de Construção de Hidrelétricas na Amazônia Brasileira By Ana Karine Pereira
  10. Financing Utilities: How the Role of the European Investment Bank shifted from regional development to making markets By Clifton, Judith; Diaz Fuentes, Daniel; Revuelta, Julio
  11. The Future Costs of Nuclear Power Using Multiple Expert Elicitations: Effects of RD&D and Elicitation Design By Laura Diaz Anadon; Gregory Nemet; Elena Verdolini

  1. By: Thomas Gillier (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)); Sophie Hooge (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Gérald Piat (EDF R&D - EDF)
    Abstract: Organizations often launch exploration projects (EP) aiming at developing innovative products (or services) by the exploration of new technologies, users, ecosystems or business models. Because a fundamental purpose of any project is to create value, the approach of value management (or value engineering) has been largely adopted in the organizations to manage the projects. However, the fact to move beyond the existing markets and the established technologies imply great difficulties and uncertainties for managing creative projects. Indeed, because exploration projects precisely aim to invent products (or services) that do not exist before, the value to create is unknown at the start of such project. So, what does value management precisely mean in situation of exploration project? This research aims to clarify the nature, the beneficiaries, and the ways to manage the value in such situations. After reviewing the historical development of the two traditional approaches of value management in project management literature, we then show we show their inadequacies for managing exploratory situations. This article is based on a longitudinal of two case-studies into a collaborative management research conducted with a major French car manufacturer. The two case-studies are an inter-firm EP corresponding to the joint exploration of an innovative multimodal urban platform by the automotive firm and two other industrial partners and an intra-firm EP aiming at generating innovative projects for the development of the electric vehicles. We propose an expansive value management model (EVM) towards three main propositions: 1) evaluating and stimulating the creation of value with a constant comparison with the dominant designs - (2) sustaining the exploration by tuning the degree of undecidability - (3) stimulating the emergence of new ecosystems by the creation of new platforms projects. Finally, this research proposes key managerial principles for EP management and a set of indicators to monitor the exploration process (i.e. identifying design rules to break, managing two kind of design paths...) and the collective dimension (i.e. the beneficiaries...) of EP.
    Keywords: value management; exploration; radical innovation; exploratory projects; creativity; dominant design
    Date: 2013–04–19
  2. By: Mitsuru Kodama; Tomoatsu Shibata
    Abstract: Through research into new product development processes at a precision device maker, this paper discusses the skilful management of knowledge boundaries that lie between various organizations, and between specialized human skills and functions that make up a project organization, and presents the ways in which new organizational capabilities are brought about for the development of new products, as exploratory activities that dynamically merge and integrated the various knowledge within a company. This paper describes some of the implications derived from analysis and observations of the new organizational forms of the company's ambidextrous R&D management which the company uses to engage in both 'uncertainty management (exploration)' and 'existing product management (exploitation),' through the partnering of its existing formal organizations and dynamic structuring of diverse multifunctional teams formed as projects spanning different specializations and capabilities.
    Date: 2013–05
  3. By: Francesco Rullani (Dept. of Business and Management, LUISS Guido Carli Author-Name: Markus C. Becker; Strategic Organization Design Unit, University of Southern Denmark); Francesco Zirpoli (Dept. of Management, Università Ca' Foscari Venice)
    Abstract: This paper casts light on the role of initial code release for providing coordination of joint search processes, i.e., search processes that involve several agents who search together. We develop hypotheses about the role of initial code release for providing coordination, and for whether development projects remain active. We test these hypotheses on a dataset of 5703 open source software projects registered on SourceForge during a two-year period. We find that initial code release is indeed associated with improved coordination, and a higher chance that software development projects will actually release further code subsequently. We contribute to theory on coordination in joint search, common in distributed innovation settings.
    Keywords: artefact, coordination, open source, distributed innovation, innovation process, search process
    JEL: O32 O33 M21
    Date: 2013–10
  4. By: Niedermayer, Andras; Wu, Jianjun
    Abstract: Inter-firm R&D collaborations through contractual arrangements have become increasingly popular, but in many cases they are broken up without any joint discovery. We provide a rationale for the breakup date in R&D collaboration agreements. More specifically, we consider a research consortium initiated by a firm A with a firm B. B has private information about whether it is committed to the project or a free-rider. We show that under fairly general conditions, a breakup date in the contract is a (secondbest) optimal screening device for firm A to screen out free-riders. With the additional constraint of renegotiation proofness, A can only partially screen out free-riders: entry by some free-riders makes sure that A does not have an incentive to renegotiate the contract ex post. We also propose empirical strategies for identifying the three likely causes of a breakup date: adverse selection, moral hazard, and project non-viability.
    Keywords: Optimal R&D contracts; adverse selection; breakup date; R&D collaboration
    JEL: C72 D82 L20
    Date: 2013–05–14
  5. By: Alain Bonnafous (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - École Nationale des Travaux Publics de l'État [ENTPE] - Université Lumière - Lyon II); Bruno Faivre D'Arcier (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - École Nationale des Travaux Publics de l'État [ENTPE] - Université Lumière - Lyon II)
    Abstract: Public authorities seem increasingly to be involving the private sector in financing, building and operating new infrastructures. A lot of reasons are usually given to justify this private sector involvement but the reasons which are the most frequently mentioned relate to the ability of a private operator to manage the construction and operation of the project more efficiently. This amounts to assuming that the Internal Rate of Return (IRR) of the project is not the same depending on whether it is managed by an administration or public body or by a company which in theory keeps abreast of the progress in optimization techniques which is taking place all the time. This difference is explained in many ways: the private sector pays some categories of staff less well, is more flexible, offers faster construction times which speed up the return on investment and is also more able to resist political demands which generate additional costs. Nevertheless, with a public or a private operator, there is a target IRR, very near the standard notion of Weighted Average Capital Cost (WACC), which is larger in the case of the private alternative because this cost must also include the operator's profit. Thus, if the main stake for the national government relates, for each project of public infrastructure, to the need of subsidies, the fundamental issue is the result of two opposite effects: on one hand the effect of a bigger efficiency of the private operator, on the other hand the effect of a lower WACC for the public operator. The objective of this communication is to propose a modelling of the determination of the need of public financing which formalizes these two effects and allows analyzing the conditions under which the PPP would be advantageous for the public finances. We propose for that a model of the mechanism of financing of the projects with a restricted number of parameters. This modelling will be confronted with real French cases of projects of toll highways in order to verify the relevance of the model and to determine the actual range of these parameters and their dispersal. An analysis will finally be proposed, according to the intrinsic profitability of the projects, the conditions under which a PPP can relieve the public spending. This conclusion joins many other authors in arguing against a systematic choice of one or other solution and suggesting rather that the most appropriate solution will depend on the circumstances of each case. The original contribution of this communication consists of an original formalization and of econometric estimations of these circumstances.
    Keywords: Transport Research ; transportation policy ; PPP ; Public Private Partnership ; transportation financing ; econometric estimations
    Date: 2013–07–15
  6. By: Edoardo Gaffeo
    Abstract: The likelihood of success of grantmaking on large scale projects depends in general on pieces of information widely dispersed and privately held by recipients, public agencies, nongovernmental organizations and other interested parties. In this paper we discuss how philanthropists could e§ectively make use of suitably designed information markets to help them gathering dispersed knowledge and beliefs on the potential for social impact of innovative projects on the one hand, and in supporting the deliberation process regarding the allocation of grants on the other one.
    Keywords: Philanthropy, Grantmaking deliberative process, Information markets, Italian banking foundations
    JEL: C53 D64 D80
    Date: 2013
  7. By: Sammut-Bonnici, Tanya; Paroutis, Sotirios
    Abstract: Purpose: This paper aims to lay the foundations to develop a dominant logic and a common thematic framework of strategic innovation, and to encourage consensus over the field’s core foundation of main themes. Methods: We explore the intersection between the constituent fields of strategic management and innovation management through a concept mapping process. We categorize the main themes and search for common ground in order to develop the core thematic framework of strategic innovation. We look at the sub themes of strategic innovation in published research and develop a more detailed framework. The conceptual categories derived from the process are then placed in a logical sequence according to how they occur in practice or in the order of how the concepts develop from one other. Findings: The results yield seven main themes that form the main taxonomy of strategic innovation: types of strategic innovation, environmental analysis of strategic innovation, strategic innovation planning, enabling strategic innovation, collaborative networks, managing knowledge, and strategic outcomes. Research limitations and implications: The new thematic framework we are proposing for strategic innovation remains preliminary in nature and would need to be tried and tested by researchers and practitioners in order to gain acceptability. Academic rigor and methodological structure are not sufficient to determine whether our conceptual framework will become widely diffused in academia and industry. It would have to pass through an emergent, evolutionary process of selection, adoption and an inevitable degree of change and adaptation, just like any other innovation. Practical implications: The practical implications concern the production of instructive material and the application of strategic management initiatives in industry. The proposed themes and sub themes can serve as a logical framework to develop and update publications, which have been instrumental in their own right to shape the field. The paper also provides a checklist of potential research projects in strategic innovation, which will improve and strengthen the field. The new framework provides a comprehensive checklist of strategic management initiatives that will help industry to initiate, plan and execute effective innovation strategies. Originality: The concept mapping of the themes of strategic innovation yield a new dominant logic, which will influence the evolution of the field and its relevance to both academia and industry.
    Keywords: Strategic innovation, dominant logic, thematic framework, taxonomy, strategic management, innovation management
    JEL: O3 O30 O31 O32 O33
    Date: 2013–03–30
  8. By: José Carlos Albano do Amarante
    Abstract: Este trabalho discute diferentes maneiras de se obter tecnologia militar, quais sejam: o desenvolvimento autônomo; o desenvolvimento cooperativo internacional em nível governamental; o desenvolvimento cooperativo internacional em nível empresarial; e a transferência de tecnologia. Para tanto, apresenta a demanda de material militar para combates atuais e futuros, visualizando uma ênfase no emprego de meios militares com crescente sofisticação e complexidade, utilizando tecnologias baseadas na robótica, na sistemização e na automatização, além da defesa na guerra cibernética. Analisa, ainda, o cerceamento tecnológico relacionado a tecnologias sensíveis e abre uma porta alternativa, dando acesso ao desenvolvimento dessas tecnologias, mediante a criação de programas mobilizadores. O trabalho avalia oito projetos de obtenção de tecnologia militar e extrai ensinamentos em diferentes setores tecnológicos, considerando: os mísseis MSS1.2 e A-Darter, além do Projeto Astros II, no setor missilístico; o Urutu, o Guarani e o Gaúcho, no setor de veículos terrestres de combate; o classe Tupi, no setor submarino; e a aeronave AMX, no setor aéreo. This paper discusses different ways to obtain military technology, examining: the autonomous development; the cooperative development in international governmental level; the cooperative development in international business; and technology transfer.For that, the article presents the demand for military equipment for current and future combats, visualizing an emphasis in employment of military resources with increasing sophistication and complexity, using technologies based on robotics, in systemization and in automation, in addition to the defense in cybernetic war. This article analyzes the technological retrenchment, related to sensitive technologies, and opens an alternate port, giving access to the development of these technologies, through the creation of mobilizing programs. This work evaluates eight projects to obtain military technology and draws lessons in different sectors of technology: the missiles MSS1.2 and A-Darter, besides the project Astros II, in the missile sector; the Urutu, Guarani and Gaúcho, in the land vehicles of combat sector; the Tupi class, in the submarine sector; and the AMX aircraft, in air sector.
    Date: 2013–10
  9. By: Ana Karine Pereira
    Abstract: O governo de Luiz Inácio Lula da Silva marcou a retomada da postura estatal de forte indutor do crescimento econômico a partir do investimento em obras variadas de infraestrutura, algo evidenciado com o lançamento do Programa de Aceleração do Crescimento (PAC), em 2007. Essa atuação estatal encontra paralelo no governo Vargas e, principalmente, nos governos autoritários das décadas de 1970 e 1980, quando o Estado planejou a construção de hidrelétricas, a pavimentação de rodovias etc. Entretanto, o contexto atual é radicalmente diferente, sendo caracterizado por um arranjo político-institucional que envolve múltiplos atores nos processos decisórios e de implementação de políticas públicas, além de ser marcado pela presença de instrumentos de interação entre Estado e sociedade civil e por uma legislação ambiental que torna mais rigorosa a aprovação de empreendimentos com impacto ambiental. Este artigo se propõe a analisar a atuação contemporânea do Estado brasileiro a partir do estudo do encontro entre ativismo estatal e democratização. Para tanto, é realizado um estudo comparativo entre o arranjo político-institucional do passado – que se insere em um contexto de desenvolvimentismo e autoritarismo político – e o arranjo atual a partir do estudo de duas hidrelétricas planejadas para a Amazônia brasileira, Tucuruí e Belo Monte. Conclui-se que o arranjo atual proporciona a explicitação e a defesa de interesses variados, o que justifica a superioridade técnica dos projetos de hidrelétricas atuais. Entretanto, o arranjo atual não é capaz de processar os conflitos que emergem do embate entre interesses divergentes, o que tem causado a judicialização dos processos decisório e de implantação de hidrelétricas e a baixa legitimidade desses projetos. Essa dificuldade de conciliar interesses é explicada pelas diferenças existentes entre os ramos estatais envolvidos na construção de grandes hidrelétricas: a capacidade decisória se concentra em órgãos com pouca abertura política, enquanto a capacidade participativa é característica de órgãos com baixa capacidade decisória. A metodologia utilizada neste artigo é variada e inclui entrevistas a atores-chave e análise documental. The election of Luiz Inácio Lula da Silva marked Brazil’s resumption of “big government” intervention in the economy, particularly through investment in a variety of infrastructure projects, as evidenced by the launch of the Growth Acceleration Program in 2007. Historically, such infrastructural projects were typical of the Vargas government and were especially common during the Authoritarian Period (1964-1985), when the State planned to build hydroelectric dams, to pave roads, etc. The current context is radically different, however, being characterized by a political and institutional arrangement that involves multiple stakeholders in the decision and implementation process of public policies, and is marked by a close relationship between State and civil society and by environmental legislation that makes the approval process of projects with environmental impact more rigorous. This article aims to analyze the performance of the contemporary Brazilian state by studying the encounter between state activism and democratization. We conduct a comparative study between the political and institutional arrangement of the past, characterized by dictatorship and developmentalism; and the current arrangement of democracy and developmentalism. This comparative analysis is based on the study of two large dams planned to the Amazon, Tucurui and Belo Monte. We conclude that the current arrangement stimulates the defense of a variety of interests, which explains the technical superiority of the current hydroelectric projects. Nevertheless, the current arrangement is not able to organize and conciliate the conflicts that emerge from the clashes of divergent interests, which have caused the judicialization of the decision and implementation process of dams and also the low legitimacy of these projects. The difficulty to conciliate interests is explained by differences between state branches involved in the construction of large dams: the decision-making capacity is concentrated in state agencies that are politically closed whereas the participatory capacity is concentrated in state agencies with low decisional capacity. The methodology used in this paper is varied and includes interviews with key political actors and documental analysis.
    Date: 2013–10
  10. By: Clifton, Judith; Diaz Fuentes, Daniel; Revuelta, Julio
    Abstract: In the face of continuing financial and economic crises, the European Investment Bank (EIB) has been criticized for being overly-conservative in its loans to Europe. Critics in particular have called on the EIB to vastly increase its investment in utilities as a counter-cyclical measure. To take stock and, in order to evaluate the role of the EIB in financing utilities over time, we compile and analyze an original database of all EIB utilities project loans from 1958 to 2004. We find the EIB started out by functioning as a regional development bank, prioritizing utilities finance in its members’ poorer zones; however, energy crises in the 1970s marked a shift whereby the logic of EIB finance to utilities became more politically-oriented. By the 1980s, utilities projects supported by the EIB were intimately related to those required for the Single Market. The origins of the EIB’s current conservative approach to utilities loans was born in the 1970s and fully consolidated by the 1990s.
    Keywords: Infrastructure policy. International Financial Institutions. European Investment Bank. Economic Development. European Union.
    JEL: F36 F53 G24 N24 N74 O18
    Date: 2013
  11. By: Laura Diaz Anadon (Belfer Center for Science and International Affairs, John F. Kennedy School of Government, Harvard University, USA); Gregory Nemet (Nelson Institute Center for Sustainability and the Global Environment (SAGE), University of Wisconsin, and La Follette School of Public Affairs, University of Wisconsin, USA); Elena Verdolini (Fondazione Eni Enrico Mattei and CMCC, Italy)
    Abstract: Characterizing the anticipated performance of energy technologies to inform policy decisions increasingly relies on expert elicitation. Knowledge about how elicitation design factors impact the probabilistic estimates emerging from these studies is however scarce. We focus on nuclear power, a large-scale low-carbon power option, for which future cost estimates are important to designing energy policies and climate change mitigation efforts. We use data from three elicitations in the USA and in Europe and assess the role of government Research, Development, and Demonstration (RD&D) investments on expected nuclear costs in 2030. We show that controlling for expert, technology, and design characteristics increases experts’ implied public RD&D elasticity of expected costs by 25%. Public sector and industry experts’ costs expectations are 14% and 32% higher, respectively than academics. US experts are more optimistic than their EU counterparts, with median expected costs 22% lower. On average, a doubling of public RD&D is expected to result in an 8% cost reduction, but uncertainty is large. The difference between the 90th and 10th percentile estimates is on average 58% of the experts’ median estimates. Public RD&D investments do not affect uncertainty ranges, but US experts’ are less confident about costs than Europeans.
    Keywords: Nuclear Power, Uncertainty, Returns to RD&D, Expert Elicitations, Meta-Analysis
    JEL: O3 Q5 Q55
    Date: 2013–10

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