Chapter 1: Fundamentals of Innovation
Q1) During Lecture 1 we discussed Nikolai Kondratieff’s theory of long waves (1925). Using the material
of the lecture and the readings
Explain the concept behind Nikolai’s theory of long waves, providing an example.
Nikolai’s theory of long waves suggests that economic prosperity/growth/boom is driven by
developments in innovation. An example of this is the industrial revolution which included key
developments like the steam engine and industrialization
Explain why despite it being controversial it is still relevant:
Despite Kondratieff’s theory being controversial, it caused innovation to be at the center stage and
receive significant attention.
Q2) During lecture 1 we discussed Joseph Schumpeter's concept of creative destruction (1942). Using
the material of the lecture and the readingsExplain the concept of create destruction with at least one
example:
The concept of creative destruction refers to the radical innovative entry by entrepreneurs. Creative
destruction is the primary driver of long-term economic development. Creative destruction ensures
competition to monopolies as they are compelled to in innovation. Entrepreneurs are the key actors
disrupting the economy equilibrium Netflix is an example of creative destruction, having entirely
overthrown the entertainment industry
Q3) During lecture 1 we discussed the definition of innovation (not digital). Explain the definition of
innovation with an example:
Innovation is the practical implementation of an idea into a new device or processAn example of
innovation that is not digital are sticky notes in which an innovative idea was implemented into the
process of note-taking
Q4) Explain the difference between process and product innovation providing an example for each
Process innovation is orientated towards improving the effectiveness or efficiency of the process of
production. Product innovation is embodied in output itself. The difference is that process innovation
affects the firm itself and is not noticed by the customer, whereas product innovation directly affects the
customer as it is embedded in the output. One of the world's most significant process innovations was
Henry Ford’s invention of the moving assembly line, reducing the assembly time from 12 hours to 90
minutes. An example of product innovation is the invention of the bagless vacuum cleaner.
,Q5) Explain the difference between architectural and component innovation providing at least one
example
Architectural innovation changes the overall design of a system or the way its components interact
whereas component innovation only refers to the specific component itself. An example of architectural
innovation is the desktop printer. Initially these consisted of two separate components, a photocopier
and a printer, however they now consist of one joint system. Decreasing size of transistors on a circuit
board improving its overall performance.
Q6) How does incremental innovation differ from radical innovation? Provide at least one example for
each
Incremental innovation makes a relative or minor change to an already existing practice building on an
existing knowledge base whereas radical innovation is very new and different from prior solutions.
Radical innovation requires entirely new knowledge and resources depending on perspective. The
iphone is a product that can be both classified as radical and incremental. The first iphone ever released
was a radical innovation, being the first “buttonless” with endless capabilities, changing the mobile
industry forever. However, since the frist release the Iphone product line can be considered as
incremental innovation as with each new version released they are building upon existing knowledge
Q7) Explain the two type S curves as well as its adopters categories with one example provided.
There are two type of S curves, the adopters and performance. Performance S curve represents the
effect effort has on the performance of an innovation. As effort increase (which is not necessarily related
to time) the performance of an innovation increases in the shape of an S. Discontinuous technology is
when a second technology builds-on top of current technology to fulfill similar market needs. Adopters S
curve represents how time affects the level of adopters. The first wave of adopters are referred to as
innovators: risk taker, young, high financial fluidity and close contact to scientific sources. The last wave
of adopters are referred to as laggards: aversion to change, old, low financial fluidity and in contact with
only friends and family.
Q8) explain the definition between sustaining innovation and disruptive innovation, and how disruptive
innovation differs from radical innovation
Sustaining innovation is making better products, for higher product, to attractive customers in existing
markets. Whereas disruptive innovation is simpler or more convenient products, for lower prices to new
or unattractive customers. Radical innovation is an entirely new knowledge base that is not necessarily
aimed at customer needs, whereas disruptive innovation attains to customer needs and does not
necessarily destroy existing business models. An example for sustaining innovation is Apple’s macbook
that continues to pursue the top end of the market, which includes attractive customers. Disruptive
innovation could be google Chromebooks, that are a cheaper alternative, aimed at unactratvice
customers and is a simpler form of a laptop like Apples
, Lecture 2: Innovation in Digital Age
Q1) What is Digital Innovation and what makes it different from Innovation in itself? Provide an
Example?
Digital Innovation is a product, process or business model that is perceived as new, needs some
significant changes on the part of adopters and is embodied by IT. While Innovation is a design or
process that is seen as an idea and needs to be turned into reality. Digital Innovation includes
Reprogrammability, which is the possibility to program and reprogram digital artifacts. In addition it is
the possibility of homogenization of data, which is the digital representation of any analog signal into a
set of binary numbers; Calls, video, texts. An example of a basic digital innovation is mobile applications.
Q2) What is meant by convergence?
Convergence contains three boundaries; Object Boundaries, User practices and Industry Boundaries.
Object Boundaries is the transforming of digital capabilities into previously purely physical artifacts. For
example the phone which now includes a camera and games. User Practices is the connection of the
layer of digital and materiality, for example instagrams ability provide shopping. Industry Boundaries is
the convergence in industries, for example skype's movement from a software firm to a telecom firm.
Q3) What are the three implications for managerial practices?
Platforms are building blocks that serve as a foundation for a firm to develop new complementary
products, technologies or services. In order to harness the convergence and generativity made possible
by pervasive digital technology, firms now innovate and create platforms rather than single products.
Distributed nature of innovation through geographical dispersion is the use of open innovation and
online communities to share innovation in the company and Heterogeneity is the integration of
unrelated knowledge, i.e. previously specialized, self-contained professions an example of this is
crowdsourcing.
Combinatorial Innovation is the practice of using components of different digital technologies and trends
together to uncover new or better value. It is important to build in standardized interfaces to enable
possibilities for recombination in advance
Q4) What is generativity and its sub-sections? Provide 1 example
Generativity refers to a technology's overall capacity to produce unprompted change drivers by
large, varied and uncoordinated audiences.
