Innovation, introduction to
claims and patent systems
Principles of innovation
Different classifications and typologies
Different types of innovation
Disruptive vs. sustaining (market)
- Disruptive: creates a new value chain (e.g. cell phone, netflix)
- Sustaining: supports an existing value chain (e.g. new car type)
Radical vs. incremental (product)
- Radical: completely destroys existing market
- Incremental: small changes
From a product point of view
Architectural vs. modular (product)
- architectural: changes the configuration of the product (e.g. i-watch)
– often aimed at targeting a new market
- modular: changes a module within a product (e.g. type of battery) –
often aimed more at existing market
Source of innovation
Business innovation: Enable businesses to become more efficient and
profitable
Marketing innovation: New ways of interacting with clients
- Tesla makes it possible to buy cars online
Technology innovation: new ideas based on technology (producing a
solution to a real/perceived need)
-> most great innovations are based on new technology
-> important aspects for competing and increasing profit
Dynamics of innovation
Relates to industries where the performance of the product and the cost of
production are dominant (and where publicity and/or trends are less dominant)!!
By studying examples of innovation in the market, it is possible to recognize a
general model in the development of a product:
The first ‘fluid phase’
- The introduction of 1 original product
1
, - Many competitors develop their own alternative product
- The production process is still inefficient
Fluid phase dominant design
• It then moves to a ‘transitional phase’
- Efficient production becomes more important
- Need for standardization
- Producers start providing innovative production processes
• The last phase: ‘specific phase’:
- The cost of efficient production becomes more and more important
- There are improvements on the product itself
- The price of the product gives a competitive advantage
- There are few competitors
Factors affecting dynamics
Established technologies are often improved as a reaction to competing
innovations: you can get “defensive innovation” by established
technologies.
Innovators often change into conservative defenders of a status quo as
they invested a lot in their own innovation.
The appearance of a dominant design favors companies having the know-
how to innovate the production process difficult to enter the industry
Conclusion for industry
-> keep innovating
-> Introducing new competences in a company is important for the long-term
survival of the company
-> find balance between improving your own products and introducing new
competences
-> strong technology, good knowledge of the market and competition is
important
How do non-traditional innovation occur
• Innovations arise by looking for opportunities, via bright ideas
• Opportunities occur:
- Accidentially (penicillin)
- When addressing market demands
Stimulation of innovation
1. Government
-> subsidies
-> by creating knowledge clusters
-> by requiring standards for certain products
2. Competition
3. Entrepreneurial inventors
Problems of innovation
-> basic research does not generate money
AND
-> money is not enough to make inventions
Patent system
How does this contribute to dynamics of innovation?
2
claims and patent systems
Principles of innovation
Different classifications and typologies
Different types of innovation
Disruptive vs. sustaining (market)
- Disruptive: creates a new value chain (e.g. cell phone, netflix)
- Sustaining: supports an existing value chain (e.g. new car type)
Radical vs. incremental (product)
- Radical: completely destroys existing market
- Incremental: small changes
From a product point of view
Architectural vs. modular (product)
- architectural: changes the configuration of the product (e.g. i-watch)
– often aimed at targeting a new market
- modular: changes a module within a product (e.g. type of battery) –
often aimed more at existing market
Source of innovation
Business innovation: Enable businesses to become more efficient and
profitable
Marketing innovation: New ways of interacting with clients
- Tesla makes it possible to buy cars online
Technology innovation: new ideas based on technology (producing a
solution to a real/perceived need)
-> most great innovations are based on new technology
-> important aspects for competing and increasing profit
Dynamics of innovation
Relates to industries where the performance of the product and the cost of
production are dominant (and where publicity and/or trends are less dominant)!!
By studying examples of innovation in the market, it is possible to recognize a
general model in the development of a product:
The first ‘fluid phase’
- The introduction of 1 original product
1
, - Many competitors develop their own alternative product
- The production process is still inefficient
Fluid phase dominant design
• It then moves to a ‘transitional phase’
- Efficient production becomes more important
- Need for standardization
- Producers start providing innovative production processes
• The last phase: ‘specific phase’:
- The cost of efficient production becomes more and more important
- There are improvements on the product itself
- The price of the product gives a competitive advantage
- There are few competitors
Factors affecting dynamics
Established technologies are often improved as a reaction to competing
innovations: you can get “defensive innovation” by established
technologies.
Innovators often change into conservative defenders of a status quo as
they invested a lot in their own innovation.
The appearance of a dominant design favors companies having the know-
how to innovate the production process difficult to enter the industry
Conclusion for industry
-> keep innovating
-> Introducing new competences in a company is important for the long-term
survival of the company
-> find balance between improving your own products and introducing new
competences
-> strong technology, good knowledge of the market and competition is
important
How do non-traditional innovation occur
• Innovations arise by looking for opportunities, via bright ideas
• Opportunities occur:
- Accidentially (penicillin)
- When addressing market demands
Stimulation of innovation
1. Government
-> subsidies
-> by creating knowledge clusters
-> by requiring standards for certain products
2. Competition
3. Entrepreneurial inventors
Problems of innovation
-> basic research does not generate money
AND
-> money is not enough to make inventions
Patent system
How does this contribute to dynamics of innovation?
2
