Asphalt Pavement Magazine - September/October 2016 - 20


Indexed to 1998
3.5-

R&D Spending

3.0-
2.5-

Revenue
Revenu

2.0-
R&D Spending
as a % of Revenue

1.5-
1.0-

2000

2005

2010

2015

Source: Bloomberg data, Capital IQ data,
Strategy & analysis
Figure 2. R&D Spending and Revenue3

new market with their products and
marketing approaches. For example,
when Apple launched the first
iPhone in 2007, it was considered
revolutionary in some respects, but
it lacked several important features,
such as 3G network and video
recording, that were standard in
other smartphones. As a result, it sold
only 1.5 million units in the first two
quarters. By releasing this phone,
Apple was able to collect invaluable
customer feedback on its new
product that was not available before
the release. With the information
collected after each release, Apple
has begun a structured process of
enhancing features and adding
functionality that has satisfied
customer needs. Even though the
incremental improvements often
do not involve breakthrough
technologies, they delight its
customers and allow Apple to release
its new iPhone year after year. In
three quarters after launching the
iPhone 6, Apple sold a total of 183.17
million iPhones (iPhone 6, iPhone 6
Plus, iPhone 5s and iPhone 5c).2 With
their products, the most innovative
companies outperformed their
industry peers based on financial
metrics, including revenue growth,
Earnings Before Interest, Taxes,

Depreciation, and Amortization as a
percentage of revenue, and marketcap growth in 2015.3
However, innovation can be
expensive and unpredictable. For
example, both Boeing and Airbus
underestimated the time and budget
in the processes of creating their
respective new airplanes, the Boeing
878 and the Airbus A380. Spending
on R&D in the Global Innovation
1,000 companies rose 5.1 percent to
$680 billion in 2015, the strongest
increase in the last three years.3 In
addition, R&D spending growth even
outpaces revenue growth for these
companies (Figure 2). To successfully
create and bring to market innovative
products or services, companies focus
on not only the cost of innovation,
but also the resources needed to
support innovation and the processes
that facilitate innovation. To sustain
their innovative success, companies
continue to place more emphasis
on innovation at a strategic level to
create a continuous capability for
innovation and a corporate culture
that embraces innovation.4
In the past few decades, several
industries have undergone some
significant changes and have
benefited from these process and
product innovations. For example,

20 * View past issues online at www.naylornetwork.com/nap-nxt

robotics, computerized design and
control, as well as other technical
and work process innovations have
helped transformed the automobile
industry to become more productive
and cost-effective while increasingly
environmentally friendly
and sustainable.
However, the Engineering and
Construction (E&C) sector has been
slower to adopt and adapt to new
technologies than other sectors and
has undergone no major disruptive
changes.4 As it is operated based on
competitive procurement models,
the sector has historically taken a
conservative approach to product
design and delivery, leading to no
labor productivity improvement for
the last 50 years (Figure 3) and a
somewhat fragmented industry.
As part of the E&C sector, the
highway industry has also been
very slow to adopt and adapt to
new technologies. For example, the
Mechanistic-Empirical Pavement
Design Guide (MEPDG) was
first introduced in 2004, but it
has not been fully implemented
by most state agencies as of
2016-12 years later.
While annual research is
conducted nationwide to improve
many aspects of asphalt pavements,
its results are often slowly
implemented due in part to the lack
of effort to foster implementation
at the state and local levels in the
research program. It was thought
that transportation agencies would
see the immediate benefits of
the research results and simply
implement them without any
external stimulus.
In the private sector, technology
transfer is often done through
commercialization (within
an organization or between
companies). There are many
private organizations specialized
in commercialization playing the
role of "transfer agent"-bringing
both innovation generator
and commercial enterprise
together-with the ability to
raise venture capital and other
necessary resources for successful


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Table of Contents for the Digital Edition of Asphalt Pavement Magazine - September/October 2016

Chairman’s Commentary
Industry News
Innovation in Mindset and Technology
Innovative Pavement Research
Freight Innovations in Our Future
Creating a Sustainability Program:
Industry Calendar
Index of Advertisers / Advertisers.com
Asphalt Pavement Magazine - September/October 2016 - Cover1
Asphalt Pavement Magazine - September/October 2016 - IBD_L
Asphalt Pavement Magazine - September/October 2016 - IBD
Asphalt Pavement Magazine - September/October 2016 - cover2
Asphalt Pavement Magazine - September/October 2016 - 3
Asphalt Pavement Magazine - September/October 2016 - 4
Asphalt Pavement Magazine - September/October 2016 - 5
Asphalt Pavement Magazine - September/October 2016 - 6
Asphalt Pavement Magazine - September/October 2016 - 7
Asphalt Pavement Magazine - September/October 2016 - 8
Asphalt Pavement Magazine - September/October 2016 - Chairman’s Commentary
Asphalt Pavement Magazine - September/October 2016 - 10
Asphalt Pavement Magazine - September/October 2016 - 11
Asphalt Pavement Magazine - September/October 2016 - 12
Asphalt Pavement Magazine - September/October 2016 - Industry News
Asphalt Pavement Magazine - September/October 2016 - 14
Asphalt Pavement Magazine - September/October 2016 - 15
Asphalt Pavement Magazine - September/October 2016 - 16
Asphalt Pavement Magazine - September/October 2016 - 17
Asphalt Pavement Magazine - September/October 2016 - 18
Asphalt Pavement Magazine - September/October 2016 - Innovation in Mindset and Technology
Asphalt Pavement Magazine - September/October 2016 - 20
Asphalt Pavement Magazine - September/October 2016 - 21
Asphalt Pavement Magazine - September/October 2016 - 22
Asphalt Pavement Magazine - September/October 2016 - 23
Asphalt Pavement Magazine - September/October 2016 - 24
Asphalt Pavement Magazine - September/October 2016 - 25
Asphalt Pavement Magazine - September/October 2016 - 26
Asphalt Pavement Magazine - September/October 2016 - Innovative Pavement Research
Asphalt Pavement Magazine - September/October 2016 - 28
Asphalt Pavement Magazine - September/October 2016 - 29
Asphalt Pavement Magazine - September/October 2016 - 30
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Asphalt Pavement Magazine - September/October 2016 - 31
Asphalt Pavement Magazine - September/October 2016 - 32
Asphalt Pavement Magazine - September/October 2016 - Freight Innovations in Our Future
Asphalt Pavement Magazine - September/October 2016 - 34
Asphalt Pavement Magazine - September/October 2016 - 35
Asphalt Pavement Magazine - September/October 2016 - 36
Asphalt Pavement Magazine - September/October 2016 - Creating a Sustainability Program:
Asphalt Pavement Magazine - September/October 2016 - 38
Asphalt Pavement Magazine - September/October 2016 - 39
Asphalt Pavement Magazine - September/October 2016 - 40
Asphalt Pavement Magazine - September/October 2016 - 41
Asphalt Pavement Magazine - September/October 2016 - 42
Asphalt Pavement Magazine - September/October 2016 - 43
Asphalt Pavement Magazine - September/October 2016 - 44
Asphalt Pavement Magazine - September/October 2016 - 45
Asphalt Pavement Magazine - September/October 2016 - 46
Asphalt Pavement Magazine - September/October 2016 - 47
Asphalt Pavement Magazine - September/October 2016 - 48
Asphalt Pavement Magazine - September/October 2016 - Industry Calendar
Asphalt Pavement Magazine - September/October 2016 - 50
Asphalt Pavement Magazine - September/October 2016 - Index of Advertisers / Advertisers.com
Asphalt Pavement Magazine - September/October 2016 - 52
Asphalt Pavement Magazine - September/October 2016 - 53
Asphalt Pavement Magazine - September/October 2016 - 54
Asphalt Pavement Magazine - September/October 2016 - 55
Asphalt Pavement Magazine - September/October 2016 - 56
Asphalt Pavement Magazine - September/October 2016 - 57
Asphalt Pavement Magazine - September/October 2016 - 58
Asphalt Pavement Magazine - September/October 2016 - cover3
Asphalt Pavement Magazine - September/October 2016 - cover4
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