Practical information
Exam: digital, closed book, mc & open questions.
Lecture 1
Articles this week:
● Bloom, Sadun, van Reenen (2012): Does management really work?
● Bessant (2003): Challenges in Innovation Management
Strategic positioning : Dimensions that are important for a company/industry used to compare
companies.
Joseph A. schumpeter
Invention = An idea, a sketch or model for a new or improved device, product, process or system.
Innovation = The process and outcome of creation and commercialization of something new.
Innovation includes opportunity identification, ideation or invention to development, prototyping,
production, marketing and sales.
Entrepreneurship only needs to involve commercialization (depending which definition of
entrepreneurship is applied)
Commercialization is the process by which a new product or service is introduced into the general market
Innovation = Invention + Exploitation
Innovation
Innovation is hard work, the TTP (Total Factor Productivity) can be shown in the picture below.
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,This gap can be explained because of:
● Average wait time on patent applications increases.
● The decrease of federal R&D spending
● decrease in post-secondary degrees in science, technology, engineering & math.
Standard economic of strategy:
● Analysing…
- Existing structures,
- Equilibriums
● But innovation is about
- Creation (and destruction)
- Change
- Novelty
Why innovation is difficult:
● Innovation funnel = Most innovative ideas do not become successful new products.
● Carefully crafted strategies required
● Barriers, Competitors, Innovation patterns, Environment, etc.
Innovation funnel = filters
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,Most new ideas fail in the market (an estimated 70 - 90%)
Sources of innovation (FUGPI, is een taartje):
● Firms
● Universities
● Government Funded Research (GFR)
● Private Non-profit
● Individuals
R&D by firms
Research refers to both basic and applied research:
● Basic research: aims at increasing understanding of a field without an immediate commercial
application in mind.
● Applied research: aims at increasing understanding of a topic or field to meet a specific need.
Development refers to activities that apply knowledge to produce useful divides, materials, or processes.
R&D thus refers to a range of activities that extend from early exploration of a domain to specific
commercial implementations.
Demand Pull/ Technology Push
Originate from linear models
Technology/Science push:
● Starting point Scientific discovery → invention → manufacturing → marketing
● Linear model emphasizes ‘supply side’.
● So here scientific discovery is supplying new possibilities to innovation.
Technology push (TP) = there is an innovation or idea and it is pushed onto the market.
Risk for TP: Develop a solution for which there is no problem.
Need/ Demand pull:
● Starting point customers suggestions → invention → manufacturing
● Linear model emphasizes ‘demand side’.
● The demand for solving a certain need by customers
Demand pull (DP) = market has a problem which leads to innovation
Risk for DP: Missing ability to invent technology to solve problems.
Demand side factors, education of cost and benefits (relative benefits)
Innovation process likely to be non-linear. Even though innovation might start at one of the points, steps
can go back and forth.
Most current research emphasises that innovation originates from a variety of sources and follows a
variety of paths.
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, Supply determinant of innovation:
● Technologic opportunity = State of the relevant scientific and technological knowledge.
● Cost and availability of inputs = Knowledge workers, scientific personnel, equipment.
● Appropriability = ability to capture profit from innovation
Appropriability = ability to appropriate a return on the product on the market.
Demand determinants of innovation:
● Cost reduction potential from innovation (process innovation; new sources of supply;
organisational change)
● Consumer or producer benefit from novel product (product innovation)
● Consumer or producer benefit from improvements (incremental product innovation)
Development of innovation models
● Rothwell’s five generations of
innovation models.
Extensive networks = collaboration
networks
How to get an idea you don’t own with external sources:
● Purchasing, buying, licensing lenting the idea
● Externalities (technological, pecuniary)
Combinations of External and Internal Sources
● Strategic partnership
● Cross licensing: giving one party a licence to use in return for a similar licence
● (Networks for exchange, Joint venture, collective research associations, government-sponsored
joint research programs, informal networks)
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