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All lectures in the course Strategic Management of Technology and Innovation
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HC01 Introduction and the Strategic Importance of InnovationYou can improve people’s lives. Growth of a business. Innovation is something that moves
on, it cannot be stopped. This has good and bad sides.
Energy
Healthcare
There is a big step up going on in health care because of technology (3D printing organs).
Finance
Automotive
Self-driving cars. Test drives. Google Self-driving cars. Visual Impairment. Big change in
people their lives. Driverless cars will be there, but in a different form.
“The process of creative destruction is the essential fact of capitalism”. - Joseph
Schumpeter. Ice harvesting before the refrigerator.
Kondratieff waves. The waves are the big changes throughout the years. The big wave now
will be AI. The world always sees some kind of crisis → Things grow, people see a
downturn.
Growth of Apple after they introduced the Iphone in 2008.
Consequences of Innovation: Employment
Innovation changes the nature of the jobs. Their is a big change in our lives together with
innovation.
“Will AI replace jobs?” - It depends on the job. Some people need to move out. Recent
studies say
3 Bottleneck variables for computerisation.
- Social intelligence
- Creativity
- Perception and manipulation
Automation.
Ongoing study evidence
- Increased developments in AI correlates with higher wages for high-software
dependent jobs.
- Low- and high-software dependent jobs see a moderate increase in employment,
whereas medium software intensity jobs see a decrease in employment.
Benchmarking innovation performance
Average performance en Top 20% performance.
- Top 20% much less failures.
It is very important to come up with products with real innovation. Not just bigger etc.
The red queen effect. You need to run to stand still, you need to run twice as fast to get
somewhere. Move ahead a little bit further by running harder.
,Polaroid is back because people want to have something they can hold. Even though it is
very expensive.
Increasing importance of innovation
Producing a cars used to take much longer.
Defining technology and innovation
Technology is defined to fulfill a human purpose. Technology consists of multiple
components linked together. Technology exploits phenomena to fulfill its purpose. (video:
3D printing with the use of sunlight = solar power).
With Innovation we think about new things. Combination of existing things. There is a
difference between an invention and an innovation.
Technological innovation is the act of introducing a new device, method or material for
application to commercial or practical objectives. Innovation is the process of turning ideas
into reality and capturing value from them. It also has to be exploited on the market to be an
innovation.
So, innovation = theoretical conception + technical invention + commercial exploitation.
Sources of innovation
Multiple sources:
- Inventors
- Users
- Firms
- Universities and government-funded research
- Private Nonprofit organisations
Because of Edison → things that already existed in the world into commercial innovation.
Firms: R&D activities
There is basic research; research that you do for research sake. Applied research: direct
basic research to more practical ends. Much more directed kind of research. Development:
produce prototype/service. Experimental device.
What makes the iPhone so ‘smart’?
- Technology of HTML come from CERN ….
- Much of these technology became more accessible. There roots rely on much more
research that was already done. They just combined those.
Directing R&D activities
Autonomy R&D staff / Technology push / Strategic intent / Market pull
Balance between autonomy, strategic intent.
,HC02 Innovation Trajectories
Schilling defines the technology trajectory as: “the path a technology takes through its
lifetime”. They tried to build these different components and how they evolve over time and
try to build some more managerial understanding from this. There are different components,
they make up these improvements in technology. The three main elements are:
- re-use of components
- recombination of components
- Change the combination of components and try to innovate, which happens to
be a major dominant driving force in innovation.
- novel components
Re-use
The re-use example is something we use everyday. It is a cover to keyboard. In some
countries there is a slightly different layout but more or less the layout is similar.
Where does this layout come from? Why do we use cover to keyboard layout?
Typewriter. There was a need to put these commonly used letters together apart. Keyboard
helps people to write faster.
Why do we still cling to the cover to keyboard?
Path dependency: On the user site, it is difficult for us to adopt a new type of keyboard. A
change will also be difficult because firms will also lose some of the economies of scale they
may have by using the same keyboard because now there is another kind of layout coming
out.
Recombination
Combine the already existing components to have a novel use at the end of the day. That is
basically how recombination helps to come up with novel inventions and if they can become
commercialized then innovations.
Another example for recombinations could be the incubators. In 1870s, many newborn
babies die, and Stephan Tarnier observes that many newborn chickens in the farm also die
and for the farming the solution is to create as space that is clean, heated and that’s warmed
up and has the right kind of atmospheric parameters that helps the chickens to survive.
Tarnier was wondering if the same could be done with the babies. It takes 20 years down the
road, before there is a first prototype idea that really works. It is indeed a recombination of
things we now, it is just taken from a farm setting and thinking how do we recombine these
technologies in a way that is more adaptable to human babies, but pretty much helping the
same end, helping them to survive.
NeoNurture, incubator that is made by car parts. Some students from MIT built this as a
project. In some parts of the world they have limited access to modern medical devices, and
you can really make this from only using replaceable car parts.
What happened to this invention? Is it a success or a failure?
Many people in these countries and hospitals were quite offended. Because they were not
given the latest technology but an incubator that was made of car parts. It is not the medical
device they are looking for, just something cheap and low-tech in a way and people didn’t
really accepted it. Because people were feeling offended this invention never get caught up
and make the impact that people thought it would make.
, Novel components
Can you give an example of a very novel innovation based on a novel component?
Depending on the time, computer at the time; transistors where new and people really used
them to produce something that computes. Similarly in the quantum computing. Based on
very novel components because the whole logic is quite different on how these devices
work.
Types of Innovation
We can think of a few well known definition. One very common distinction is that between
product innovation and process innovation. The other commonly used distinction is about
incremental and radical innovation. These distinctions are intuitive. But there are also
other kinds of distinction such as the competence enhancing a nd competence destroying
or architectural versus component innovation or sustaining versus disruptive
innovation.
There are also other kind of innovations such as service innovation, business model
innovation and management innovation. They are all different ways to look at innovation
and they have all their own right as a meaning.
Incremental innovation and radical innovation
Incremental innovation is an innovation that makes a relatively minor change form (or
adjustments to) existing practices. It builds on existing knowledge and resources. An
example of this being, buying the upgrade from iPhone 5 to iPhone 6 (minor difference
between the two iPhones) with less incremental innovation or there is also an other new
iPhone from 6 to 7 which also has touch ID then it becomes a bit more radical and less
incremental.
Radical innovation is an innovation that is very new a nd different f rom prior solutions. It
requires completely new knowledge and resources. Radical innovation require new
knowledge and skills to work with them but also innovate them. Generally we expect
significant performance differences from radical innovations. What can be easily debated is
that many radical innovations when they first come, are not really radical in performance.
e.g. When the first cars where a prototype, some horse carriages were faster than the cars.
So people said the horse carriages are going to stay. When radical innovation requires new
knowledge and skills from firms it can create big differences in competition. So some firms
may make the jump because they have the ability to service this new kind of technologies.
Overlooking new technology developments makes it for firms difficult to develop radical
innovations. e.g. Sony already had a big expertise on digital cameras when they first came
out. And on the contrary, the Kodak had a whole culture business model and the capabilities
based on chemical film processing. Digital technology was a big leap for them and adopting
digital technology meant they could lose all their competence. So the radical innovation can
be either competence enhancing or competence destroying. And that defines who wins
or loses after a radical shift in innovation.
Technology S-curve
Technology s-curve: when there is a technology you are using they start off with small
improvements, they improve slowly over time but at some point the technology receives a
breakthrough and then the technology improves in performance a lot and this happens in a
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