Innovation management and strategy - Mock exam: questions and solution
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Course
Innovation management and strategy (BKULD0H36A)
Institution
Katholieke Universiteit Leuven (KU Leuven)
This document contains the answers for each possible question which you can find on Ekowiki with the aim to gain a better understanding of the course material: these were compiled by attending the lectures and discussion with other fellow students! The document contains 9 pages and contains the var...
Innovation management
and strategy
Sample exam
Questions and solutions
KU Leuven
, Voorbeeldexamenvragen Ekowiki
Januari 2022
Can open innovation resolve the Innovator’s dilemma of Christensen?
The Innovator’s Dilemma states that when disruptive technological change happens,
companies who lead lose their dominant position or get wiped out in many industries.
Different objectives imply different activities which seem to be difficult to organize within
the same organization especially when creative destruction is entering the stage.
Christensen says that every company that has tried to manage mainstream and disruptive
business within a single organization failed.
Retake August 2023
Describe Schumpeter’s ideas: The research of Schumpeter started with the observation that
there are waves in the economy. He wanted to investigate what drives the economy to
higher levels of performance, and the answer of the engine behind wealth creation is
innovation. His theory states that there two types of agents: exceptional individuals, the so-
called heroic entrepreneurs who are willing to face hazards and difficulties in innovation and
then, there are imitators who are merely routine managers who follow the pioneers. In the
first theory of Schumpeter, the theory of heroic entrepreneurs and creative destruction as
the engines behind business cycles, the so-called Schumpeter I or young Schumpeter,
science and technology are exogeneous factors. The possibilities to translate technological
development into economic activity is always present and this leads to creative destruction
because when you create something, you replace something. The scarce resource is the
human capability to translate an idea in an economic reality, and not the idea itself.
Schumpeter changed his mind and therefore a new theory is developed: the Schumpeter II
or old Schumpeter. It states that large established firms are also engines of innovation and
create economic activities. Science and technology are an internal part of large firms, for
example R&D departments which are increasingly important in the innovation process. The
people who work in the R&D department can be considered as entrepreneurs.
What other actors exist in today’s innovation systems (apart from those presented by
Schumpeter)?
Besides entrepreneurs and large established firms, the innovation dynamics are not
complete without universities and governments. They also play an essential role.
Do you think they are complementary or independent?
As Baumol describes, entrepreneurs are better at creating breakthroughs as they bring in
new products and disrupt the existing situation and large established firms are better at
creating aggregated incremental improvements which could have revolutionary
consequences as they created power houses for technology development and innovation
and use it to create value in the markets. They both contribute, but the nature of their
contribution is different and therefore, they are complementary. Additionally, universities
are better at basic research and product/process innovation and the government is better at
basic research and funding. The different actors in the innovation dynamics are
complementary.
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