Complete summary for Innovation Management + Recap notes
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Course
Innovation Management (6012B0425Y)
Institution
Universiteit Van Amsterdam (UvA)
Book
Strategic Management of Technological Innovation
Full summary needed for the exam and additionally I included summary of the summary (Recap) which includes main points necessary for the exam. These points are based on lectures, past exams and repeated things.
Test Bank for Strategic Management of Technological Innovation 7th Edition Schilling
Exam / Test bank for Innovation management (Grade: 8.5/10)
Strategy and Innovation Lectures Chapters Articles
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Business Administration
Innovation Management (6012B0425Y)
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Content preview
Chapter 1: Introduction
Innovation:
- Innovation is the implementation of creative ideas into some new device or
process.
- Requires combining creativity with resources and expertise.
OK But why technological innovations?
Technological innovation now the single most important driver of competitive
success in many industries
- Many firms earn over one-third of sales on products developed within last five
years
- Product innovations help firms protect margins by offering new, differentiated
features.
- Process innovations help make manufacturing more efficient.
Importance of Technological Innovation
Advances in information technology have enabled faster innovation.
- CAD/CAM systems enable rapid design and shorter production runs
- Shorter product life cycle. Think of mobile phones.
- Greater market segmentation -> more personalization -> demand for
more unique offering
Importance of innovation and advances in information technology have lead
to:
- Shorter product life cycles (more rapid product obsolescence)
- More rapid new product introductions
- Greater market segmentation
- e.g. 3D printed house, made on demand, customizable by customers.
Impact on Society
Innovation enables a wider range of goods and services to be delivered to people
worldwide
- More efficient food production, improved medical technologies, better
transportation, etc.
- Increases Gross Domestic Product by making labor and capital more
effective and efficient
- However, may result in negative externalities,
- e.g., pollution, erosion, antibiotic-resistant bacteria
Innovation: The Importance of Strategy
Successful innovation requires carefully crafted strategies and implementation
processes.
Innovation funnel: Most innovative ideas do
not become successful new products.
- e.g., The New Product
1
, Development Funnel in Pharmaceuticals
Innovation Management: Innovation management is the art and science of
managing the process of implementation of ideas into valuable products, process or
services.
Chapter 2: Sources of Innovation
Innovation can arise from many different sources and the linkages between them.
(firms, individuals, universities, government-funded research, private nonprofits)
Creativity: The ability to produce work that is useful and novel.
Individual creativity is a function of:
- Intellectual abilities (e.g., ability to articulate ideas)
- Knowledge (e.g., understand field, but not wed to paradigms)
- Style of thinking (e.g., choose to think in novel ways)
- Personality (e.g., confidence in own capabilities)
- Motivation (e.g., rely on intrinsic motivation)
- Environment (e.g., support and rewards for creative ideas)
Innovation by Users
- Users have a deep understanding of their own needs, and motivation to fulfill
them.
- While manufacturers typically create innovations to profit from their sale, user
innovators often initially create innovations purely for their own use.
- E.g., Laser sailboat developed by Olympic sailors; Lego Ideas
Organisational Creativity
Organisational Creativity is a function of:
- Creativity of individuals within the organization
- Social processes and contextual factors that shape how those individuals
interact and behave
Methods of encouraging/tapping organisational creativity:
- Idea collection systems (e.g., suggestion box; Google’s idea management
system)
- Creativity training programs
- Culture that encourages (but doesn’t directly pay for) creativity.
So should we encourage creativity?
- We should encourage employee choice and strengths
- Ideas require intentional effort and oversights
- Cross-departmental collaboration
case study: Inspiring innovation at Google. Google uses a range of formal and
informal mechanisms to encourage its employees to innovate. Google maps, gmail
are all side projects.
2
,Innovation by Organisation
Research and Development by Firms
- Research refers to both basic and applied research.
- Basic research aims at increasing understanding of a topic or field
without an immediate commercial application in mind. No intention to
immediately commercialise our ideas into products.
- Applied research aims at increasing understanding of a topic or field
to meet a specific need. We refine the understanding and apply it with
a goal to meet a specific need. We think about how we can apply
knowledge into something that can bring value in the practice
community.
- Development refers to activities that apply knowledge to produce useful
devices, materials, or processes.
Science Push approaches suggest that innovation proceeds linearly:
- Scientific discovery → invention → manufacturing→ marketing
Demand Pull approaches argued that innovation originates with unmet customer
need:
- Customer suggestions → invention → manufacturing
- asking customers how they can benefit better from the product we offer and
based on those suggestions we can use this information as an input for the
R&D department
Most current research argues that innovation is not so simple, and may originate
from a variety of sources and follow a variety of paths.
Firm Linkages with Customers, Suppliers,Competitors, and Complementors
Most frequent collaborations are between firms and their customers, suppliers, and
local universities.
External versus Internal Sourcing of Innovation
- External and internal sources are complements
- Firms with in-house R&D also heaviest users of external collaboration
networks
- External innovations does not mean that you would have to invest less
in scientific push. There’s evidence that firms that engage heavily on
R&D also rely heavily on external -- users and consumers. And more
reliance on external entities requires a higher level of absorption
capacity for external knowledge.
- In-house R&D may help firms build absorptive capacity that enables
them to better use information obtained externally.
Research by Government Universities
3
, - Many universities encourage research that leads to useful innovations
- Bayh-Dole Act of 1980 allows universities to collect royalties on inventions
funded with taxpayer dollars
- Led to rapid increase in establishment of technology-transfer offices.
- Revenues from university inventions are still very small, but universities also
contribute to innovation through publication of research results.
- Think of Horizon 2020
- Governments invest in research through:
- Their own laboratories
- Science parks and incubators
- Grants for other public or private research organizations
- Example: The internet and GPS (US DARPA research), KNAW
(Neuroscience, Stem cell), KITLV (Southeast Asian studies)
Private Non-Profit Organisations
- Many nonprofit organizations do in-house R&D, fund R&D by others, or both.
- Example: Solar Road, Hybrid Truck and Bus Engines (Nederlandse
Organisatie voor Toegepast Natuurwetenschappelijk Onderzoek (TNO))
Innovation in Collaborative Networks
Collaborations include (but are not limited to):
- Joint ventures: Joint venture is an agreement between parties for a particular
purpose and usually a defined timeframe.
- Huawei Symantec, digital storage and network security. Established in
2008, Huawei 51% Symantec 49%. Defunct 2012
- Licensing and second-sourcing agreements: Organisation gives license to
other companies to use their innovation, data or technology.
- Coca Cola is famous for licensing, but if you look at Fanta, the taste of
Fanta here might not be the same as in Egypt.
- Joint Strike Fighter 35. F35 produced and developed by the US,
licensed to NATO countries.
- Research associations: Universities Research Associations (URA), 90
Universities in the US. In the Netherlands, VSNU
- Government-sponsored joint research programs: EU horizon 2020 oblige joint
research. Preferably between universities from West and East EU countries
- Value-added networks for technical and scientific exchange:
- conferences
- service offering that acts as an intermediary between business partners
sharing standards based or proprietary data via shared business
processes. The offered service is referred to as "value-added network
services“. For example, EU-ANSA.
- Informal networks: between individuals
Collaborative research is especially important in high-technology sectors
4
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