Risk management in technology and market unknowns: can we afford to be certain?

Generic technologies design as a powerful solution to deal with double unknown

Olga Kokshagina is a doctor of MINES ParisTech since the 29nd of January 2014

Innovation and technology management: from decision-making to design perspective in risk management

Can a company organize development with controlled risks while promising markets and eligible technologies are yet undetermined? Classical methods tend to deal with either technological unknowns by predefining market needs (market pull) or market unknowns by pursuing technological opportunities development (technology push). These methods, though, consider that risks are difficult to manage in double unknown situations, when technologies are evolving and markets are still unknown. However, in some high-tech industries such as semiconductors, telecommunication or biotechnology, situations when both commercial and technological uncertainties do occur, and therefore companies have to organize the exploration while controlling both costs and risks in double unknown. Moreover, commonly used strategies to deal with uncertainty exploration such as «trial and learning » appear to be unpredictable and too costly while facing with unknowns in high-tech. This is the starting point of the thesis of Olga Kokshagina: on one side there is a motivation to deal with unknown technologies and unknown markets in order to propose innovative solutions ahead of competitors and on the other side, there is an increasing pressure to control the costs of R&D exploration, to ensure market acceptance.

Olga’s thesis shows that double unknown might be “manageable” and reveals a winning solution for its management: design of generic technologies capable to address multiple emerging markets and propose improved solutions to the existing ones. The motivation behind the interest in exploring double unknown raises from the possibility to overcome market and technological unknowns and propose solutions in various application areas by developing highly generic technologies.


Collective action model for the design of generic technologies

This dissertation introduces a new model for generic technology design based on:

1) the detailed empirical case studies at STMicroelectronics that did not fit the classical risk management approaches. In particular, this work leads to characterize these anomalies and show that they correspond to the design of generic technologies. As a result, an original model of risk management was determined. It consists of identifying “common unknown” for several potential applications as well as designing a generic technology.

2) Simulation and modeling work was conducted to identify the techno-economic conditions in which the introduced “common unknown” strategy is more relevant for the design of generic technologies than other alternatives such as market pull or trial and learning strategies. 

3) Built upon the most recent design theory formalisms, the research defines the notion of generic concept, its properties and specificity of such concept to account for the large validity domain.

4) Finally, following research on governance forms and technology management, it is shown that the design of generic technologies requires a new managerial figure in organizations, a «cross-application manager ». This actor should be capable of managing simultaneously multiple explorations for both technologies and markets and know their functional structure in order to organize exploration in double unknown. Built on STMicroelectronics case studies, it is proved that the success of generic technology design is highly correlated with the existence of a new function capable to play this role – at least temporarily.

Semiconductor wafers, showing IPtronics designed ICs for Parallel Optical Interconnects using a STMicroelectronics fabrication process
Photo credit Businesstecho Licence Creative Commons



Olga Kokshagina obtained her diploma in industrial engineering at Bauman Moscow State Technical University in 2009. The theme of her thesis was "Intelligent system for projects planning and scheduling". The scientific effort was closely connected with the development of hybrid genetic algorithms that represent perspective line of investigation for NP-hard problems. The empirical data was collected from the construction projects in the petrochemical industry. Prior to her collaboration with STMicroelectronics, Olga has completed the graduate program at IBM Software Group during in 2008 - 2009. Built on this experience and her university education, Olga had a chance to match her engineering skills with the requirements of different business and industrial needs. The difficulties and achievements within this multidisciplinary experience raised her motivation to work in the area of innovative design and R&D management.

Olga Kokshagina carried out her PhD with the Centre for Management Science (CGS), MINES ParisTech Graduate School. Her research was a part of CIFRE program conducted in collaboration with STMicroelectronics where the author was deeply engaged in a range of innovative projects from October 2010 till November 2013. Advised by Pascal Le Masson and Benoit Weil at CGS, Olga’s dissertation stands out by its contribution to the literature in engineering design, technology management, uncertainty and innovation management. Regarding managerial implications developed and deployed tools and methods are particularly relevant for high-tech industries characterized by the high rate of competition, disruption and fast renewal. Apart from the semiconductor industry, the relevance of this work is proved by its application within the energy and the aerospace industry.