Firms developing quasi-autonomous technology

Electronics- and electrotechnical industry 135

Tandberg Data ASA is a publicly held company based in Oslo, Norway. The company is

known for its innovation in magnetic storage technology, and is a global supplier of advanced, tape-based data storage products for the professional market. The company offers products for user applications within data storage management through a worldwide channel sales network.

In addition to corporate offices and manufacturing facilities in Oslo, Tandberg Data has marketing, sales and support operations in the USA, UK, France, Germany, Norway, Singapore and Japan.

Tandberg Data was one of the companies that was established in the wake of the Tandberg Radiofabrikk bankruptcy during the 1970ies. The firm was built on a technological fundament of analogue tape recording, which originally was used for recording audio.

Tape backup is a competitive market. Tandberg Data has competitors in its own “global niche” – tape technology - , but also faces stiff competition from other types of data storage (such as the DAT digital tape recording developed by SONY of Japan, and recording systems using other types of media (such as compact disks – CD-RW and DVD-RAM – and optical disks).

Tandberg is developing its own technology, the SLR tape technology. With the SLR product line, the company believes it has a good basis for future development of its data storage business, and wish to focus on further developing its own proprietary products based on this technology (Annual report 1998).

The competitive challenge Tandberg Data faces consists in having competitive products in terms of performance (speed and reliability) and pricing. In addition, there is a strong demand that products both are backward compatible (old data must be accessible with new equipment) and that the technology has a credible development path ahead of it (data storage volume that needs storage is increasing strongly, and customers want to know that more powerful products will become available over time.)

Tandberg is traditionally and fundamentally technology based firm, with a strong development milieu and a strong engineering culture. However, the firm today see it as important to be (and to be perceived as) customer oriented, and stresses the significance of support and service). Furthermore, management is also focusing on the need to

development the work organisation; to enhance creativity essential for developing the business in the longer term, while at the same time keeping costs down and securing day-to- day profitability.

How is knowledge generated and skills developed in order to develop the firm in all the pertinent areas? Obviously, much is done through recruitment. Managers develop in the organisation, and people with managerial skills are also recruited outside. People with technical skills are recruited from universities and other firms; around 200 engineers work in development and production in the Oslo headquarters.

But this is only the beginning. The core competencies that make the organisation effective and efficient, and that makes the firm a technology leader in its chosen area depend on ongoing learning and development, which in part is an “intra-mural” activity, but which in a significant degree is taking place in interactions with other institutions. The Tandberg Data firm has close collaboration on research projects with research institutes, such as SINTEF in Oslo and Trondheim, and with institutions abroad. There is furthermore close collaboration with suppliers of components and materials. Increasingly, Tandberg Data is also establishing partnerships with their major customers (such as IBM and other computer systems

manufacturers) and with other firms in the same industry (such as Quantum of the USA). All these relationships are interfaces for interactive learning processes that are essential for sustained competitiveness and technological leadership of Tandberg Data.

Tandberg increasingly feels the need to make alliances both to develop the strategic dimensions of the overall business, and to develop the technology basis of the future. The company has good experiences with such collaborations. They have very good experiences

commissioning out research and development tasks to SINTEF (mainly SINTEF Trondheim, but in some cases also SINTEF Oslo), and also have a collaborative project underway with people at the University of Oslo. In practical terms, SINTEF is perceived as professional and easy to deal with, while the University is a large bureaucracy where many decision making levels have to be involved, and where the practical aspects of collaboration may be severely hampered by the fact that the university decision making system is slow, and the time the university needs to get practical arrangements in order is excessively long.

However, the crucial problem is to find people with the needed competence. The weakness of the electronics industry – and in particular the data storage industry – in Norway and in Europe is a problem for Tandberg Data. There are few firms with relevant core competence, and few academic and research milieus that possess competence that is desired by

Tandberg Data. Most of this competence is located in the US, and although Tandberg has access to some of the relevant technology centres there, it is difficult to reap the same benefits from them as do firms in the American storage industry.

Source: Author’s interviews with employees, information from company’s web site.

Technology ICT firms in the Oslo region, such as Tandberg and Norman, depend on autonomous R&D capabilities. One of the keys to successful operations is the linking of research and development concurrently to commercial operations and needs of the firm, and to other knowledge generating milieus around the world. The larger the firm, the more does the firm itself develop its links and relations within the industry and the wider technology field in which it is operating. The bigger firms, and the more advanced and commercially appealing and exclusive the technological capacity of the firm is, the more can the company have the ambition to influence development directions in the field where it operates. In the case of Tandberg, the company has chosen to pursue one line of development in which it has a decided technological advantage. Faced with competition from rivalling technologies, the firm has strived to build collaborative relationships to main players in the ICT industry. Tandberg has taken the role as OEM for firms such as SUN and IBM. In this way, one has tried to compensate for the dangers of choosing a narrow technological fundament, by building strong collaborative relationships with strong and demanding customers. On the technology side, an earlier tendency to base development on internal

resources and intra-mural learning processes has been weakened, and there has been a gradual opening up towards learning interactively with external competence milieus, such as research institutes and universities. Such relationships are of mainly two types: Short term projects, extending from a few weeks to several months, financed by the Tandberg Data, undertaken by applied research milieus such as SINTEF, and longer term projects, undertaken in universities, where Tandberg may contribute equipment and partial financing.

The benefits from managing to dominate crucial technologies can be enormous, as role model firms such as Microsoft and Intel have shown. But most firms, and almost all firms in the Oslo regions, are small and medium sized firms which however

Electronics- and electrotechnical industry 137

do, or do the same at a much lower cost. (Personal computers and their components tend to cost the same, but their performance go up all the time.) The significance of this type of change should not be underrated, as it can be a major factor behind growth for long periods of time. However, there is also more demanding cases of change, “qualitative” change, which means that something really new happens which has important and often unpredictable consequences.

Such changes often are incompatible with existing economic, technological or social practices, and may force radical and costly changes onto existing institutions. Small

firms may often be the first to exploit the potential benefits of such changes. Small

firms can find niches where they employ new design principles, materials and components in profitable business operations long before large firms find it opportune to do the same.

Tordivel AS is a company based in Oslo, Norway, providing programming services, turnkey

vision systems, and specialized and standard equipment for use of computers in primarily technical applications. The company currently employs twelve highly skilled engineers, organized in two departments – industrial inspection and software development.

The firm started off as a one-man business in 1992, as a consultancy which did program- ming work for major Norwegian companies. Tordivel soon established itself as a software and hardware sales business, representing foreign firms which provide products usable in small-scale or large-scale industrial systems where signal or image processing is part of the task at hand.

Tordivel early in 1997 established a department to produce camera-based solutions to cut- ting-edge manufacturers. The department today employs six persons among these three highly skilled vision engineers. The goal is to make solutions using world-class components from leading companies such as Cognex Corp, USA, Image Industries, UK, and Lord Ingegneri, France.

Tordivel has managed to generate considerable growth during its first years of operation by utilising new and advanced components originating from abroad in projects aimed at dvelop- ing cost effective process solutions for industrial customers in Norway with activities in the industrial automation field. These customers have been production companies (such as Ip- last AS) automation equipment manufacturers (for instance Norcontrol and Autronica) and for research institutes (Sintef).

These activities have been in part facilitated and promoted by public agencies which aim at contributing to technological innovation and business development. Development projects have received support from the Norwegian Research Council and from SND. SND Invest at the end of 1998 made a 2,5 MNOK investment in the firm (in a private issuing of shares). The company interacts closely with other suppliers, customers and research institutions and this interaction is a major factor in the learning processes that the firm depends on for its continued existence. Key competence must also enter the firm by way of recruitment of new people, which often come from other electronics firms. Most of the technologists in the firm are graduates from the Norwegian Technical University in Trondheim). The recruitment issue has at times been a major bottleneck. According to the director of the firm, Thor Vollset, the firm struggled for more than two years to get hold of a competent software developer, without success. As a small firm, the task of locating and attracting young talent at times appear to be an insurmountable obstacle to growth. (Source: Interview with employee development engineer, and information from

The firm Electrocompaniet was established in Oslo in 1972 with the purpose of developing and producing high performance and high fidelity sound systems with an electronic design which was completely different from other designs. The design were based upon a new approach to transistor amplifier design developed by Dr. Matti Otala and Jan Lohstro. The result of their innovative design work were incorporated in the first Electrocompaniet design, a 25 watt amplifier.

Electrocompaniet's experimentation based on this new design and the company’s desire to create transparent, neutral powerful amplifiers led to a search for, and discovery of, a new way of using feedback in amplifiers. Since then the company has experienced fewer design limitations. Years of comprehensive testing and research have resulted in the current designs using an approach to the output stage not seen in other amplifiers.

All Electrocompaniet products are made by highly skilled technicians, and extensively tested for maximum performance and reliability. Electrocompaniet amplifiers are sold in more then 25 countries.

The company has built a strong development group, but the firm is a small one, currently employing about 20 people. The firm wishes to grow its business, but experiences “loneliness” in its location in the Oslo-region. In the early years, when the consumer electronics firm Tandberg was still operating, it was easier to get access to relevant resources; both in terms of components, materials and methods. The company to a large extent relies on this stock of knowledge and competence, key personnel have stayed with the firm for a long time, and learning happens in a trial and error process, and in an interactions between developers in the field and people in organisations interfacing with the company, such as suppliers and buyers.

As a small company, Electrocompaniet does not have resources to continuously map opportunities offered by public agencies to support development of SMB’s and innovation. Furthermore, interacting with advanced research milieus is difficult. The company has specific needs which do not often match the interests of researchers in such milieus, and the company does neither have the resources needed to participate in long terms research efforts with uncertain results, nor the power to influence research directions in external R&D milieus.

Source: Interview with manager, with employee of subcontracting firm, and information from http://www.electrocompaniet.no/