Managing Innovation – Lectures
HC1, Innovation introduction and systems
Introduction on Innovation Management (CH1)
Innovation drives firm performance and economic growth
- Innovation has accelerated since 1780s
- Industrialization based on division of labor, tasks divided in smaller tasks and distributed to
people; automatization; control
- Scientific research helps distributing technologies. We also use it in product systems. It
became easier to reach this knowledge. This offers more opportunities to create new things.
- Existing competencies are destroyed while developing new competencies aimed at making
new combinations (Schumpeter). If you want to create something new, you might need to
destroy the existing competencies. Can also be a combination of existing things.
o Innovation disturbs equilibrium in real economies. If there were no economies, the
system of products would be very easy where demand and supply create prices. In
result of innovation this equilibrium is disturbed. If firms don’t innovate, they don’t
make money and wouldn’t have higher margins for, for example, future investments
or uncertainties.
- Innovation comes from small entrepreneurs (Mark I)
- Big firms are the drivers of innovation (Mark II)
- Innovation enables to create a competitive advantage
Innovation drove exhaustion and pollution
- Innovation of the past has driven exhaustion and pollution → we now face climate problems.
This has accelerated since the Industrial Revolution.
Only 1 way out = INNOVATION. Innovate to find sustainable solutions.
- No sustainable solutions without new technologies
- No new technology without social/organizational innovation → firms need
to use technologies and consumers need to buy them (the resulting
products). How to convince consumers to buy it. People need to support
the innovation and buy it. Also a role for government → make
organizations work on it + convince people to buy.
Innovation is defined
- Consists of 3 parts:
o Theoretical conception (idea)
o Invention (something new)
o Commercialization/Bringing into common usage (introduce)
- Innovation is different from change (can change into something that is not new),
entrepreneurship (doesn’t mean new business), design & creativity (involved, not the same)
1
,Innovation success is not the most likely outcome
- About 70% of new products fail (higher for radical than incremental)
o Examples of failure: Omo power, Buckler beer, Dvorak keyboard
- Various criteria used to measure success (Financial, Market, Technical, Strategic, Process)
- Wealth of success factors
Distinguish between non-technological and technological innovations.
Technological innovation types distinguishing products from process
- Product for customers: consumers or organizations.
- Process innovation = Production innovation of organizations.
Non-technological innovation distinguish service from organization
- Service innovation, e.g. financial: new mortgage
- Organizational innovation, e.g. flexible workplaces
o Marketing and management innovation
o Business model, e.g. different way of revenue generation
Innovation process models have evolved into interactive models
- Linear models:
- Interactive models: interaction between market (knowledge) and interaction with
technological processes
- Open innovation models: knowledge is not necessarily developed within boundary of the
firm, it can also come from outside → technological or market. Allowing others to do it.
2
,Architectural models focus on a system with components
Model used in development of video systems. It has a V-shape: it involves the theoretical concepts
and then it goes into architectural design. Very common for software-based products.
Only few process models show functional interfaces
Stage-gate model of NPD process (Copper, 1983).
Decision making gates → is idea being developed or stopped? Every aspect is took into account to
decide to continue or stop.
3
, Discontinuous innovation changes the rules of the game
Change the nature of the game = radical, disruptive
What is digital innovation?
Subset of technologies that relate to creation/storage/retrieval of knowledge. Often manifested in
physical products. Core = information processing.
- Level 1 – information processing, for example data in databases → physical representation,
seeing the information flows
1984:
ASML is world-leading in systems that produce chips. Chips are technologies that go into smart
products.
4
HC1, Innovation introduction and systems
Introduction on Innovation Management (CH1)
Innovation drives firm performance and economic growth
- Innovation has accelerated since 1780s
- Industrialization based on division of labor, tasks divided in smaller tasks and distributed to
people; automatization; control
- Scientific research helps distributing technologies. We also use it in product systems. It
became easier to reach this knowledge. This offers more opportunities to create new things.
- Existing competencies are destroyed while developing new competencies aimed at making
new combinations (Schumpeter). If you want to create something new, you might need to
destroy the existing competencies. Can also be a combination of existing things.
o Innovation disturbs equilibrium in real economies. If there were no economies, the
system of products would be very easy where demand and supply create prices. In
result of innovation this equilibrium is disturbed. If firms don’t innovate, they don’t
make money and wouldn’t have higher margins for, for example, future investments
or uncertainties.
- Innovation comes from small entrepreneurs (Mark I)
- Big firms are the drivers of innovation (Mark II)
- Innovation enables to create a competitive advantage
Innovation drove exhaustion and pollution
- Innovation of the past has driven exhaustion and pollution → we now face climate problems.
This has accelerated since the Industrial Revolution.
Only 1 way out = INNOVATION. Innovate to find sustainable solutions.
- No sustainable solutions without new technologies
- No new technology without social/organizational innovation → firms need
to use technologies and consumers need to buy them (the resulting
products). How to convince consumers to buy it. People need to support
the innovation and buy it. Also a role for government → make
organizations work on it + convince people to buy.
Innovation is defined
- Consists of 3 parts:
o Theoretical conception (idea)
o Invention (something new)
o Commercialization/Bringing into common usage (introduce)
- Innovation is different from change (can change into something that is not new),
entrepreneurship (doesn’t mean new business), design & creativity (involved, not the same)
1
,Innovation success is not the most likely outcome
- About 70% of new products fail (higher for radical than incremental)
o Examples of failure: Omo power, Buckler beer, Dvorak keyboard
- Various criteria used to measure success (Financial, Market, Technical, Strategic, Process)
- Wealth of success factors
Distinguish between non-technological and technological innovations.
Technological innovation types distinguishing products from process
- Product for customers: consumers or organizations.
- Process innovation = Production innovation of organizations.
Non-technological innovation distinguish service from organization
- Service innovation, e.g. financial: new mortgage
- Organizational innovation, e.g. flexible workplaces
o Marketing and management innovation
o Business model, e.g. different way of revenue generation
Innovation process models have evolved into interactive models
- Linear models:
- Interactive models: interaction between market (knowledge) and interaction with
technological processes
- Open innovation models: knowledge is not necessarily developed within boundary of the
firm, it can also come from outside → technological or market. Allowing others to do it.
2
,Architectural models focus on a system with components
Model used in development of video systems. It has a V-shape: it involves the theoretical concepts
and then it goes into architectural design. Very common for software-based products.
Only few process models show functional interfaces
Stage-gate model of NPD process (Copper, 1983).
Decision making gates → is idea being developed or stopped? Every aspect is took into account to
decide to continue or stop.
3
, Discontinuous innovation changes the rules of the game
Change the nature of the game = radical, disruptive
What is digital innovation?
Subset of technologies that relate to creation/storage/retrieval of knowledge. Often manifested in
physical products. Core = information processing.
- Level 1 – information processing, for example data in databases → physical representation,
seeing the information flows
1984:
ASML is world-leading in systems that produce chips. Chips are technologies that go into smart
products.
4
