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Complete summary Innovation and Technology Management
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Innovation & technology management(week 1)
Paradigms - mental models/frameworks
A paradigm is a common cohesive understanding of how a certain phenomenon must be
interpreted and explained.
Paradigm shifts = a revolutionary situation occurs: the dominant paradigm loses its momentum
or relevance and is challenged by other paradigms with alternative propositions or narratives.
What is innovation?
Initial definition - the transformation of an existing state of things, in order to introduce
something new.
It basically involves an “improvement” in how something is being done or offered.
It also suggests a contextual relevance - how are things done currently in a given society (for
instance) and how they can be improved.
Innovation is processual
1. Identify a need or a problem
2. Develop a feasible solution
3. Produce/manufacture and market the solution
4. Achieve adoption/diffusion of the innovation
Economic innovation - Process of change that introduces economic and regulatory elements
concerning the needs of people in a society, how they are met, how the goods and services are
produced.
From an entrepreneur’s/innovator’s perspective, a problem-solving process that involves
searching for new combinations of known information and knowledge.
The role of the entrepreneurial innovator (small or large firm) is to activate and coordinate all
relevant factors for the production of the innovation.
Process view of innovation
1. Obtain and gather information and knowledge (what are the sources?)
2. Organize
3. Deploy for commercial purpose
Innovation often can be a resource-intensive, uncertain, complex, and untidy process.
What triggers an innovation?
- Unexplored/unexploited opportunities.
- New discoveries/knowledge
- Scarcity
- Competition
,Innovate to improve the economic value pie
Economic value is the value that the person places on an economic good based on the benefit
that they derive from the good.
Value (V) = willing to pay for a product or service.
Demand-push and technology-pull factors
Rate and direction of innovative activity and the socio-institutional-techno-economic linkage
The rate and direction of innovative activity in a society are determined by these four important
dimensions.
The linkages across these four dimensions are often intricate.
At large, the stock of and diffusion of information/ideas; preferences, habits and needs of people;
distribution of wealth and knowledge, are major items to account for to obtain a deeper
understanding of the nature of innovation in a given society.
An innovator will have to study the dynamics among these factors to better assess opportunities
and scope for creating new ones.
Environmental factors shaping innovation:
- National/international economic factors
- Government and political factors
- Socio-demographic factors
- Ecological factors
These all affect the industry environment: firms, suppliers, competitors, customers
Innovation has become a common theme across industries.
Different industries and different firm-types within an industry pursue different kinds of
innovation.
Innovations: functionally valuable, efficiency, and revenue generating.
, Types of innovation
Product innovation - involves production of goods or services that are entirely new, or modified.
Process innovation - involves change in the method of production or delivery of goods and
services.
Organizational innovation - refers to new forms of organization of business operations.
Marketing innovation - involves design/packaging of the product, mode of promotion and
placement on the market, as well as methods for determining the selling prices of goods and
services.
Business-model innovation - the discovery of a fundamentally different business model in an
existing business.
Understanding key dimensions of innovation
1. Emergence of a new paradigm - technical and business.
2. Significant level of newness, reconfiguring knowledge, and sometimes creates new
markets.
3. Often combines distant and dissimilar ideas
Strategic, involves high uncertainty, and could have potentially high impact.
Radical innovation
Introduces no paradigmatic changes, and all modifications in production or use of particular
goods/service are limited.
Low to medium uncertainty, and usually low impact: builds firm competencies.
Continuous (incremental) innovation
Technological discontinuities - changes in paradigms
Periods when underlying standard changes
Paradigm shift
- New technology revolutionizes existing industries
- New standard is established
Technology “S” curve
- Physical limits nearing or reached
Examples of discontinuities:
Airplanes: propellers to jets
Cameras: film to digital
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