4.3.4 Sources of information

The sources of information are both internal and external to the company. They can be grouped as tacit, mix of tacit and explicit, and explicit sources.

     Tacit - company staff, personal experience.

     Mix of tacit and explicit - business consultants,
        customers, exhibitions/trade material/conferences, family and
        friends, government agencies, other companies and
        competitors, suppliers/sales representatives, trade
        associations/professional bodies.

     Explicit sources - in-house databases/reports, information brokers,
        libraries, media, on-line sources, patent information, trade journals.

In the Italian industry, Evangelista (1999) showed that for technological information, the internal departments were the most important channels for information into the manufacturing companies as shown in Table 4.4.


Table 4.4 Sources of technological information in manufacturing and services

Innovating firms for which the source is very important Sources Manufacturing % of total (rank) Services % of total (rank) Internal sources 63 (1) 37 (1) (Production/delivery, R&D, marketing department)   External sources Clients or customers 44 (2) 34 (2) Suppliers of equipment and components 36 (3) 30 (3) Fairs and exhibitions 33 (4) 14 (7) Competitors 23 (5) 21 (5) Consultancy firms 15 (6) 27 (4) Conferences, seminars, spec. journals, etc. 13 (7) 17 (6)

Source: From Evangelista, 1999, by permission of Rinaldo Evangelista and Edward Elgar Publishing Ltd.


Internal sources were not as important in the service companies as in manufacturing. Among the external sources for information, clients, customers, suppliers of equipment, materials and components were the most common sources. Information flowed from both the upstream and downstream user/supplier interactions. Consultants were more important in the service industries than in the manufacturing companies. Other sources - universities and higher educa- tional institutes, private research institutes, public research institutes, agencies for technological transfer, patents, licences and other external sources - were very important to less than 5% of the companies.

Campbell (1999) also found in New Zealand that customers and company staff were the important and most used sources for information. The heavily used sources were personal experience, customers, company staff and in-house sources; the moderately used sources were exhibitions/conferences, other companies, suppliers and trade journals. Campbell also enquired if the sources were tacit or explicit. Of the heavily used sources, personal experience and company staff were tacit, customers were tacit and explicit, in-house sources were explicit. The moderately used sources, which were external to the company, were a mixture of tacit and explicit knowledge. Most of the infrequently used sources were explicit, but some professional bodies, business consultants and government agencies provided a tacit component.

Campbell found that highly innovative companies used information more than the least innovative companies, as shown in Table 4.5.


Table 4.5 Information usage for product development

Companies   Highly innovative Moderately innovative Least innovative Source Use Importance Use Importance Use Importance Customers 4.3* 4.7t 3.7 4.9 3.9 4.3 Company staff 4.0 4.2 3.5 4.1 3.3 3.5 Suppliers 3.5 3.6 2.5 3.3 2.5 3.0 Exhibitions/ conferences 3.3 3.6 3.0 3.5 2.4 2.6 Other companies 3.2 3.8 3.2 3.7 2.2 2.5 Business consultants 2.6 2.5 2.5 3.0 1.7 2.6 Family and friends 2.4 2.4 2.0 2.4 1.9 2.2 Libraries 2.0 2.2 2.3 2.8 1.7 2.1 Govt agencies 1.9 2.5 1.9 3.1 1.5 2.2 Patent information 1.8 2.1 2.6 3.6 1.9 2.0

* Use scale 1 = not at all to 5 = all the time
^t Importance scale 1 = not important to 5 = vitally important.

Source: From Campbell, 1999.


The sources where there was no real difference between the three groups were professional bodies, media, trade journals, information brokers and in-house sources; apart from trade journals and in-house sources, these were infrequently used. Overall the highly innovative companies used a greater range of information sources in relation to their product development activities. The highly innovative and moderately innovative companies made use of both formal and informal acquisition methods, the least innovative companies were more likely to gather information informally. The moderately innovative companies tended to use more formal information acquisition methods than the highly innovative companies, both internally and externally.

In looking at the stages in product development, Campbell found differences between the three stages: pre-development analysis, product design and testing, product commercialisation as shown in Table 4.6.


Table 4.6 Information sources in three stages of product development

Percentage of companies Source Pre-development analysis Product design and testing Product commercialisation Personal experience 64 57 44 Customers 57 46 42 Company staff 44 57 48 In-house sources 43 38 32 Other companies 30 - - Suppliers 28 24 - Business consultants 19 - - Exhibition/conference - - 17

Source: From Campbell, 1999.


There was a surprisingly low use of external information sources. In the pre-development stage, only personal experience for initial screening, and customers for preliminary market analysis, were used by over 80% of the companies. Customers in initial screening and detailed market research, and personal experience in financial feasibility, were used by over 70% of the companies. In product design and testing, only personal experience in prototype design and detailed design, company staff in trial production, and customers in test marketing, were used by over 70% of the companies. In product commercialisation, the use of information was the lowest of the three stages. Only company staff and customers in production start-up, and customers in market launch, were used by over 70% of the companies. Overall in product development, highly tacit information transfer was used. Only customers' information incorporated an explicit content. New Zealand companies are small by international standards, so some of these uses of information may not be true for large multinational companies. But in product development, there does appear to be a strong reliance on tacit information and less on explicit information.

Think Break 1. List the information sources used by your company in product     development. Which sources give you vital information, useful     information, interesting information, useless information? Would you     drop some of these information sources? Do you need to include other     information sources? 2. Because of the increasing volume of information, companies have set     up systems based on information technology to receive, store and     distribute information to the various functional departments, R&D,     engineering and product development (Graef, 1998). Describe the     important knowledge areas to be included in an information system for     product development. What are the important factors to be considered     in building an information system as a basis for effective and efficient     product development?