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Digital Innovation and Virtual Organizing in a Global Setting Summary
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kSummary Digital Innovation and Virtual Organizing in a Global SettingLecture 1:
Economies: innovation sustains growth and economic developments
Society: innovation helps to solve sustainability changes
Firms: innovation ensures survival and competitiveness
Nikolai Kondratieff: Theory of long waves (1925)
Macro-economist, “Technological innovation and progress” is the center stage
Joseph Schumpeter: Concept of creative destruction (1942) -> follower of Kondratieff
Radical innovative entry by entrepreneurs is the primary driver of (long-term)
economic development:
o Via ensuring competition to monopoly power, who are compelled to invest in
innovation
Theory of business cycles (developed Kondratieff’s theory)
Entrepreneurs as key actors: disrupting economic equilibrium
Get monopoly (Schumpeterian) rents, i.e. first-mover advantage
Defining innovation:
Innovation is the practical implementation of an idea into a new device or process
Process of turning ideas into reality and capturing value from them
Theoretical conception + technical invention + commercial exploitation
Generic phase model:
Innovation: the process of turning ideas into reality and capturing value from them
State gate model:
Widespread used
,Types of innovation:
Product vs process
Embodied in outputs vs oriented towards improving the effectiveness or efficiency
of (process of) production
Architectural vs component innovation
Changes the overall design of a system or the way its component interacts with each
other vs only relating to components
Incremental innovation:
makes a relatively minor change from (or adjustment to) existing practices
Builds on existing knowledge base
Radical innovation:
innovation that is very new and different from prior solutions.
Requires completely new knowledge and resources
!Not the same as “disruptive”!
Technology S-curve: performance
Discontinuous technology: fulfills a similar market need by building on an entirely new
knowledge base
Growth and performance happens not because of time, but of effort and investment
Technology S-curve: adoption
, Lecture 2:
Sustaining innovation: Making better products, for higher prices, to attractive customers in
existing markets
Disruptive innovation: Simpler or more convenient products, for lower prices to new or
unattractive customers
Disruptive innovations (initially) do not score well on resource allocation criteria:
Best customers do not want disruptive innovations
Disruptive innovations not offer profit margins that they seek
Small markets do not solve growth needs of large companies
o Markets that don’t exist can’t be analyzed
Financial investment tools are biased towards existing business
Fundamentals of innovation:
Types of innovations
Innovation processes
Innovation diffusion
Digital innovation:
A product, process, or business model that is perceived as new, requires some
significant changes on the part of adopters, and is embodied in or enabled by IT
(Fichman et al. 2014) Creation and adoption of an idea, a product, a technology, or a
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