Copy of ITM - A

8/13/2019 Copy of ITM - A

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INTRODUCTION TO

INNOVATION MANAGEMENT


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Contents

The role of innovation

What is innovation (definitions, typologiesof innovation) What is innovation management?

Models of the innovative process


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COURSE AIMS...(1) to provide students with fundamental

knowledge of the phenomenon of innovationand innovation processes in capitalisteconomies from the perspective of firms and

industries;(2) to enable students to use basic theoretical tools

that help analyse and manage real-worldprocesses of innovation;

(3) to enhance students appreciation of theimportance of understanding innovation-relatedissues for the development of businesses,industries, countries and citizens.


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Course literature

Managing Innovation

Ingrain Technologies


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Contents

The role of innovation What is innovation?

What is innovation management? Models of the innovative process


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Innovation and the corporate strategy

Innovation management.....

has to be understood as a core process of theorganisation -> It is related to what is being produced

Is a long term race

Is about continuity

Has to deal with complexity!!

Is about being systematic developing routines aroundinnovation


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WHAT IS INNOVATION?

Invention Technology

Innovation Creating new or improved products,

processes and services

Knowledge and learning Uncertainty


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Schumpeter s distinction betweenInvention and innovation

An invention is an idea, a sketch or model fora new or improved device, product, process orsystem. It has not yet entered to economicsystem, and most inventions never do so.

An innovation is accomplished only with the

first commercial transaction involving the newproduct, process, system or device. It is part ofthe economic system .


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Dimensions of Innovation

Product innovation : changes in the things (productsor services) which an organization offers

Process innovation : changes in the ways in whichthey are created an delivered Position innovation : changes in the context in which

the product or services are introduced Paradigm innovation : changes in the underlying

mental modes which frame what an organization does

the 4Ps of innovation


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Dimensions of innovation


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Patents &

copyrights

Scientific

papers

Scientific

papers

TradesecretsTradesecrets

Sharedexpertise

C o d i f i c a t i o n

Property D i

s c l o s u

r e

Completelytacit

Fullycodifiable

P r i v a

t e l y

o w n e

d P u

b l i c

Restricted access

Fully disclosed

Knowledge product space

Source: David y Foray (1994)

The knowledge of innovation


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Triggers of discontinuity

New market emerges New technology emerges New political rules emerge Running out of road Change in market sentiment or behaviour Deregulation or reregulation Fractures along fault lines Unthinkable events Business model innovation Shifts in techno-economic paradigm Architectural innovation


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Important contextual factors

Type of sector Size of firm

The country and region The stage in the industry life cycle Political regulations


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Abernathy & Utterback industrylife cycles

The fluid phase co-existence of old and newtechnologies rapid improvement of both the sailing ship

effect Target: What product and what market? Technical: What product who will produce it ?

Experimentation


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Important contextual factors

Globalisation Sustainability

Networking organisation


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The transitional phase

A dominant design Convergence around one design Rolling bandwagon innovation channeled around a core

set of possibilities a technological trajectory

Imitation and development

Reliability, cheaply, higher functionality, quality The specific phase

Rationalization & scale economies Differentiation through customization

Scope for innovation becomes smaller


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Table 1.2 Stages in innovation life cycle


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Three key questions

1. How do we structure the innovationprocess?

2. How do we develop effective routines?3. How do we adapt or develop parallell

routines to deal with incremental vs.discontinuous innovation?


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Conclusions

Different kind of innovations Context specific

Innovation has different stages Knowledge is the key


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Repetition

Four dimensions of innovation1. Product, process, position, paradigm2. System-Component3. Incremental-New to the firm-Radical4. Codified-Tacit


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Component and architectural innovation


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Innovation management

Core process

Production

Commercialisation design, marketing, resources,

competence

Long term

Continuity

Complexity Systematic, routines


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New factors affecting innovation

Globalisation Sustainability

Networking organisation


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The innovation management process

Evolving models of the innovation process Can we manage innovation? Introducing the

concepts of Organizational Routines orCapabilities

Specify the different phases of the innovation

process How context affects innovation


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3rd generation model

Research

Knowledge

Potentialmarket

Invent and/orproduceanalyticdesign

Detaileddesign andtest

Redesignandproduct

Distributeandmarket

D I S

D: Direct link to and from research from problems in invention and designI: Support of scientific research by instruments, machines, toolsS: Support of research in sciences underlying the product areas

K K K


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4 th generation model

marketing

R&D

Productdevelopment

Componentsmanufacture

Productmanufacture


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4 th generation model

marketing

R&D

Productdevelopment

Componentsmanufacture

Productmanufacture Reduced time to market


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5TH generation model

INDUSTRY

University

R&T Centres

Suppliers Users

Government

IP IP

IP

FinancialSystem


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Innovation processes 5 th generation model

Relevance of external sources ofknowledge

firms do not innovate in isolation Related to Innovation System concept Focus on networking

Still strong emphasis on R&D and formalknowledge (ICT)


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6th generation ofinnovation processes

Revolve around knowledge and learning

Networks embrace all knowledge types,

not only R&D. Most innovative firm is the one that learnsfastest

It is the use of knowledge that makes thecompetitive difference, and creates theadvantage


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Managing complexity

Radical

NetworksR&D

Marketproduct

processes

Intellectua l

Capital

Increment

al


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Table 2 2 Rothwell five generations of innovation


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Table 2.2 Rothwell five generations of innovationmodels


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Innovation models

SO, WHICH ONE IS RIGHT? A fast food restaurant chain?

An electronic test equipment maker? A hospital? An insurance company?

A new entrant biotechnology firm?


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Can we manage innovation?

The majority of failures are due to someweakness in the way the innovationprocess is managed.

Technical resources (people, equipment,knowledge, money, etc.)

Capabilities in the organization to managethem


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Organizational routines or capabilities are theway we do things around here (in thisorganization) as a result of repetition andreinforcement

Routines are firm-specific and must be learned. To manage innovation means to create an

organisation where routines can be learned asto cope with the complexity and uncertainty ofthe innovation process

Unlearning is important


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The innovation management process

Searching looking for threats and opportunities forchange within and outside of the organisation. Technological opportunity Changing requirements on the part of the market

Selecting deciding (strategically from how theenterprise can develop and taking into account risk) whatto respond to. Flow of opportunities Current technological competence Fit with the current organizational competence


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Implement turn potential ideas into a new product or

service, a change in process.

Acquiring to combine new and existing knowledge(available within and outside the organization) to offera solution to the problem

Executing to turn knowledge into a developed

innovation and a prepared market ready for finallaunch Launching to manage the initial adoption Sustaining to manage the long term use


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In the implementation phase

Cope with uncertainty about: Technological feasibility Market demand

Competitor behaviour Regulatory and other influences Replaced by knowledge accumulated technology &

market research


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Learning to learn from progressing through this cycleso that they can build their knowledge base and canimprove the ways in which the process is managed. Restart the cycle Failure why?

Refine, improvement next generation Learning about technology, routines & organization


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Simple representation of the innovation process


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Almost the same - again


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SCAN Definition:

Detecting signals in the environment aboutpotential change (market niches, technology

development, etc) Activities

Scanning environment for technological,market, regulatory and other signals

Collect and filter signal from backgroundnoise Scan forward in time Process signals into relevant information for

decision making


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FOCUS Definition:

Selection of the various market and

technological opportunities. Inputs:

(1) the flow of signals coming from theprevious phase

(2) the current technological base of thefirm

(3) the fit with the overall businessstrategy.


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RESOURCE Definition:

Combining new and existing knowledge to offer asolution to the problem.

Activities: Invent in-house through R&D activities Create the conditions for creativity Use existing knowledge in-house Technology transfer and knowledge transfer Licensing..etc


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IMPLEMENT Definition:

Close interaction between marketing relatedactivities and technical activities to develop theidea into a marketable product or service.

Activities: Develop to maturity Technical development Development of the market Launch After-sales support


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LEARN Definition

Analysing the failures and success to input the

innovation process Activities:

Continuous improvement Knowledge and IC management


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Innovation is a risky process....but also amandatory one. Success depends of a variety

of: Internal factors

Good management Core competencies Clear innovation strategy Right technology

External factors Links with market and suppliers Learning from competitors Institutional support: financing, human capital, etc

T bl 2 3 P bl f ti l i f i ti


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Table 2.3 Problems of partial views of innovation

Table 2.3 Problems of partial views of innovation


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p(continued )


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Successful innovation

New products, processes and services account for

an increasing share of sales

Lower prices

Better-performing products

Better features for certain users (niche)

of resources devoted to the development of new

products go to unsuccessful projects

35% of products launched fail commercially


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Summary of Chapter 2

Models of the innovation process Routines and capabilities Innovation management process Partial views on innovation


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SEMINAR ASSIGNMENT WEEK 1

Give examples from the real world of a firm that has been successful at innovation a firm that has failed to innovate successfully

What, would you say, might be the mostimportant difference between the successful andthe unsuccessful firm?

Please hand in half a page or one page or so,and bring a print-out of your answer with you to

the seminar! (The assignment will not be graded, but youhave to bring it with you to the seminar inorder to participate! )


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