Summary Organizing and Managing innovation
Lecture 1.
Session 1
Paradigm: a common cohesive understanding of having certain phenomena must interpreted and
perceived. > creating value for consumers? All operations are influenced by paradigms.
Paradigm shifts: the dominant paradigm loses momentum/relevance and is challenged by other
paradigms.
What is innovation? An abstract and temporarily concept… Definitions:
- An initial definition: transformation of an existing state of things, to introduce sth new.
- In a poor country, simple transportation could already be an innovation. So innovation
depends on many factors.
- An improvement of how things are currently done/offered.
- Contextual relevance: how are things currently done and how could it be done differently?
Innovation is processual > 1 identify need/problem > 2 develop a feasible solution > 3 produce and
market the solution > 5 achieve adoption of the innovation
Economic innovation: a process of change that introduces economic and regulatory events
concerning the needs of people, how they are met and how the innovation is produces.
Entrepreneurs view: a problem-solving process that involves searching for new combinations of
known information. Role of the entrepreneur is to activate and coordinate all relevant factors of the
innovation.
Process view of innovation: gather knowledge > organize this knowledge > deploy for commercial
purpose.
Session 2
Why innovate? Examples: Increase RoA, to solve problems. It depends on how firms formulate their
problems and how they try to solve them.
What triggers innovation? Examples: unexploited opportunities, new discoveries, scarcity,
competition.
Demand pull – the market towards the demand side (consumers)
Technology push – firms towards the market
Socio-institutional context: economic growth, technological change, institutional change and social
change. A change in one of these four dimensions, can trigger change in another dimension. These
dimensions have intricate linkages.
Environmental factors shaping innovation: national/international economic factors, government and
political factors, socio-demographic factors, technology factors, ecological factors.
, Session 3
Porters five forces ->
What factors influence potential revenue?
What factors influence/drive potential costs?
Session 4
Innovation has become a more common
theme across industries
Different industries with different firms pursue different kinds of innovation (cross sectional
innovation, process innovation, business model innovations)
Innovations: functionally valuable, efficiency and revenue generating!
Types of innovation:
- product innovation: involves production of new or modified goods/services
- process innovation: involves changes in the method of production of the delivery, etc
- organizational innovation: refers to new forms of organization of business operations
- marketing innovation: involves design of the product, mode of promotion and placement on
the market + methods for determining the price
- Business model innovation: the discovery of a fundamentally different business model in an
existing business
Radical innovation: new paradigm, significant level of newness (can create new markets), combines
distant and unsimilar ideas. > strategic, high uncertainty, potentially high impact. Novel methods.
Create new market opportunities.
Incremental innovation: no paradagmic changes, only marginal changes/imporvements. + low to
medium uncertainty, low impact, but builds on competencies.
Technological discontinuity > changes in paradism (paradigm shift). New tech revolutionized existing
industries. A new standard is being established. Example: camaras from film to digital technology.
technological innovation = architectural innovation + component knowledge (knowledge of individual
elements in the design.
Lecture 1.
Session 1
Paradigm: a common cohesive understanding of having certain phenomena must interpreted and
perceived. > creating value for consumers? All operations are influenced by paradigms.
Paradigm shifts: the dominant paradigm loses momentum/relevance and is challenged by other
paradigms.
What is innovation? An abstract and temporarily concept… Definitions:
- An initial definition: transformation of an existing state of things, to introduce sth new.
- In a poor country, simple transportation could already be an innovation. So innovation
depends on many factors.
- An improvement of how things are currently done/offered.
- Contextual relevance: how are things currently done and how could it be done differently?
Innovation is processual > 1 identify need/problem > 2 develop a feasible solution > 3 produce and
market the solution > 5 achieve adoption of the innovation
Economic innovation: a process of change that introduces economic and regulatory events
concerning the needs of people, how they are met and how the innovation is produces.
Entrepreneurs view: a problem-solving process that involves searching for new combinations of
known information. Role of the entrepreneur is to activate and coordinate all relevant factors of the
innovation.
Process view of innovation: gather knowledge > organize this knowledge > deploy for commercial
purpose.
Session 2
Why innovate? Examples: Increase RoA, to solve problems. It depends on how firms formulate their
problems and how they try to solve them.
What triggers innovation? Examples: unexploited opportunities, new discoveries, scarcity,
competition.
Demand pull – the market towards the demand side (consumers)
Technology push – firms towards the market
Socio-institutional context: economic growth, technological change, institutional change and social
change. A change in one of these four dimensions, can trigger change in another dimension. These
dimensions have intricate linkages.
Environmental factors shaping innovation: national/international economic factors, government and
political factors, socio-demographic factors, technology factors, ecological factors.
, Session 3
Porters five forces ->
What factors influence potential revenue?
What factors influence/drive potential costs?
Session 4
Innovation has become a more common
theme across industries
Different industries with different firms pursue different kinds of innovation (cross sectional
innovation, process innovation, business model innovations)
Innovations: functionally valuable, efficiency and revenue generating!
Types of innovation:
- product innovation: involves production of new or modified goods/services
- process innovation: involves changes in the method of production of the delivery, etc
- organizational innovation: refers to new forms of organization of business operations
- marketing innovation: involves design of the product, mode of promotion and placement on
the market + methods for determining the price
- Business model innovation: the discovery of a fundamentally different business model in an
existing business
Radical innovation: new paradigm, significant level of newness (can create new markets), combines
distant and unsimilar ideas. > strategic, high uncertainty, potentially high impact. Novel methods.
Create new market opportunities.
Incremental innovation: no paradagmic changes, only marginal changes/imporvements. + low to
medium uncertainty, low impact, but builds on competencies.
Technological discontinuity > changes in paradism (paradigm shift). New tech revolutionized existing
industries. A new standard is being established. Example: camaras from film to digital technology.
technological innovation = architectural innovation + component knowledge (knowledge of individual
elements in the design.
