ETRP-60_CHAPTER1.pdf
- 1. Innovation Management: By: Ronalyn I. Garcia
- 2. OBJECTIVES 1. recognize the importance of innovation. 2. Provide an introduction to a management approach of innovation 3. Appreciate the. complex nature of the innovation management. 4. Describe the changing views of innovation overtime. 5. explain the meaning and nature of innovation management. 6. Recognize the need to view innovation as a management process.
- 3. INNOVATION
- 4. ‘. . . NOT to innovate is to die’ by Christopher Freeman (1982) in his famous study of the economics of innovation.
- 5. “Success today does not ensure success tomorrow” The ability of firms to develop new products and services that people want will surely help them survive into the future.
- 6. The ability to change and adapt is essential to survival.
- 10. • a way to create new business. • Employees, customers and suppliers are principal actors in the process of innovation. • a process that requires change. Change in the way of thinking and acting. In this book innovation is viewed as a management process. Innovation
- 11. •Industrial technological innovation led to substantial economic benefits. •Technological innovations have also been an important component in the progress of human societies.
- 12. Innovation has long been argued to be the ENGINE OF GROWTH. Acceleration in economic growth was the result of technological progress 19th CENTURY The importance of new products as stimuli to economic growth. “Competition posed by new products was far more important than marginal changes in the prices of existing products.” Joseph Schumpeter
- 13. Karl Marx - first suggested that innovations could be associated with waves of economic growth. Schumpeter, Kondratieff and Abernathy and Utterback (1978) have argued the LONG WAVE THEORY OF INNOVATION. Economic development occur in bursts or waves of activity.
- 16. Abernathy and Utterback The birth of any industrial sector there is radical product innovation, which is then followed by radical innovation in production processes, followed, in turn, by widespread incremental innovation. Radical innovation blows up the existing system or processes and replaces it with something entirely new.
- 18. VIEW INNOVATION IN AN ORGANISATIONAL CONTEXT
- 19. Innovation is a team game.
- 20. Listening to your customer may actually stifle technological innovation and be detrimental to long-term business success To be successful in industries characterized by technological change, firms may be required to pursue innovations that are not demanded by their current customers Studies by Christensen (2003) and Hamel and Prahalad (1994)
- 21. by Christensen) DISRUPTIVE INNOVATIONS AND SUSTAINING INNOVATIONS Sustaining innovations - provide improvements to established products. Disruptive innovations - provide improvements greater than those demanded. Disruptive innovations tend to create new markets, which eventually captured the existing market. (radical or incremental innovations)
- 22. INDIVIDUALS IN THE INNOVATION PROCESS Individuals are the key component of the innovation process ✓Define the problems, ✓Generate ideas ✓Perform creative linkages and associations that lead to inventions. ✓Decide what activities should be undertaken, ✓Decide the mount of resources to be deployed and how they should be carried out.
- 23. Innovation as a process and not a single event.
- 24. 1. What is new to one company may be old to another. 2. How does one judge success? 3. What is viewed as a success today may be viewed as a failure in the future. GAME OF SEMANTICS NEW . CREATIVITY . DISCOVERY.
- 25. ENTREPRENEURSHIP Innovation management is covered with the term entrepreneurship. Entrepreneurship focus on the role of the individual entrepreneur and on small business growing into a large one. This focus distinguishes the study of entrepreneurship from the study of innovation management The pursuit of opportunity beyond the resources you currently control. By Howard Stevenson
- 26. DESIGN Applied activity within research and development. In some industries design is the main component of product development. While in other industries, design forms only a small part of the product development activity.
- 28. INNOVATION & INVENTION Innovation is not a single action but a total process of interrelated sub processes. It is not just the conception of a new idea, nor the invention of a new device, nor the development of a new market. The process is all these things acting in an integrated fashion. By Myers and Marquis (1969)
- 29. Innovation is concerned with the commercial and practical application of ideas or inventions. Invention is the conception of the idea, whereas innovation is the subsequent translation of the invention into the economy. Innovation equation: Innovation = theoretical conception + technical invention + commercial exploitation
- 30. Conception is a new ideas or a thought or collection of thoughts. Invention is the process of converting intellectual thoughts into a tangible new artifact (product/process) where science and technology usually play a significant role. Exploitation refers to inventions combined with hard work by many different people and convert into products that will improve company performance. Innovation = theoretical conception + technical invention + commercial exploitation
- 31. Innovation is the management of all the activities involved in the process of idea generation, technology development, manufacturing and marketing of a new (or improved) product or manufacturing process or equipment. Creativity: the thinking of novel and appropriate ideas. Innovation: the successful implementation of those ideas within an organization. By 3M Senior Vice-President
- 32. DIFFERENT TYPES OF INNOVATION
- 33. TECHNOLOGY AND SCIENCE Science refers to systematic and formulated knowledge. Technology is an application of science. Technology is not an accident of nature. It is the product of deliberate action by human beings. Technology refers to knowledge applied to products or production processes.
- 35. MODELS OF INNOVATION Traditional arguments about innovation have centered on two schools of thought. 1. Social deterministic school argued that innovations were the result of a combination of external social factors and influences, such as demographic changes, economic influences and cultural changes. The argument was that when the conditions were right, innovations would occur. 2. Individualistic school argued that innovations were the result of unique individual talents and such innovators are born. Closely linked to the individualistic theory is the important role played by serendipity (luck).
- 36. The literature on what drives innovation has tended to divide into two schools of thought: 1. Market-based view - argues that market conditions provide the context that facilitates or constrains the extent of firm innovation activity. 2. Resource-based view - argues that when firms have resources that are valuable, rare and not easily copied they can achieve a sustainable competitive advantage.
- 37. SERENDIPITY The role of serendipity or luck is offered as an explanation for unexpected discovery. Serendipity is rare indeed. Discoveries may not be expected, but in the words of Louis Pasteur, ‘chance favours the prepared mind’.
- 38. LINEAR MODEL Innovation occurs through the interaction of the:
- 39. TECHNOLOGY DRIVEN MODEL (TECHNOLOGY PUSH)
- 40. CUSTOMER NEED-DRIVEN MODEL (MARKET-PULL MODEL)
- 41. SIMULTANEOUS COUPLING MODEL The model suggests that innovation is the result of the simultaneous coupling of the knowledge within all three functions that will foster innovation.
- 42. INTERACTIVE MODEL It emphasizes that innovations occur as the result of the interaction of the marketplace, the science base and the organization's capabilities.
- 43. ● Market ● Firms competencies ● External and internal sources SOURCES OF INNOVATION
- 44. INNOVATION LIFE CYCLE AND DOMINANT DESIGNS Innovative new product is the beginning of technology progress Competition Technological Change & Product Innovation Product innovation, process innovation, competitive environment and organizational structure all interact and are closely linked together Process innovations As the life cycle proceeds, a dominant design usually emerges prior to standardization and an emphasis on lowering cost
- 45. SAILING SHIP EFFECT The notion that the substitution threat of new radical technologies (steamships) may lead to a renewed spurt of innovation in an old and established technology (sailing ships).
- 46. ARCHITECTURAL INNOVATION Improving a product’s architecture only without significant impact on components yields some but limited innovation RADICAL INNOVATION Both components and architecture are innovated at the same time radical innovation or even disruption is said to take place INCREMENTAL INNOVATION Limited innovation to either components or architecture MODULAR INNOVATION Improving a product’s components only without significant impact on architecture yields some but limited innovation HENDERSON-CLARK MODEL CHARACTERISING INNOVATION IMPACT ON ARCHITECTURAL KNOWLEDGE IMPACT ON COMPONENT KNOWLEDGE
- 48. OPEN INNOVATION Information–creation process that arises out of social interaction. •The use of cheap and instant information flows •Linkages and the supply chain •Learning through experimentation Firms which engage in collaboration with external agents tend to be more innovative than firms that rely on their own resources for innovation Learning can be characterized by ‘Doing, Using and Interacting’ (DUI) mode of innovation where extensive on-the job problem solving occurs and where firms interact and share experiences.
- 50. DISCONTINUOUS INNOVATIONS Schumpeter referred to this concept as CREATIVE DESTRUCTION It creates a new market by applying a different set of values, which take over the existing market. Discontinuous changes are sometimes referred to disruptive innovation This is an opposite of a sustaining innovating which does not affect existing markets
- 51. This very same pattern of disruption can be observed with •steamships (which disrupted sailing ships); •music downloads (which disrupted CDs); and •internet shopping (which disrupted high street retailing). •Disk drive industry •Video rental services •Department stores and •Newspapers.
- 52. 1. Engage in wide exploratory innovation search activities, looking beyond their own knowledge base and domain of expertise; 2. Identify the advantages offered by new combinations of existing knowledge, through the application of technologies and materials initially developed elsewhere; 3. Often partner with unusual firms, beyond the usual sphere of collaboration; 4. Engage with partner companies to establish a close working relationship; 5. Promote lateral thinking within an existing web of partners. SUCCESSFUL INNOVATORS