Digital Transformation and Innovation
Unit 4 – Year 2022/2023
Contents
A Review of Innovation Models (Tidd, 2006)
Disruptive Technologies: Catching the Wave (Bower & Christensen, 1995)
Theories of Organizational Innovation
The New Organizing Logic of Digital Innovation: An Agenda for Information Systems Research
(Yoo et al., 2010)
Digital Innovation: a Review and Synthesis (Kohli & Melville, 2018)
Digital Innovation and Transformation: An Institutional Perspective (Hinings et al., 2018)
Digital Innovation Management: Reinventing Innovation Management Research in a Digital
World (Nambisan et al., 2017)
Sociomaterial Practices: Exploring Technology at Work (Orlikowski, 2007)
Organizing for Innovation in the Digitized World (Yoo et al., 2012)
Lecture 1: Knowledge, Innovation, and Creativity: Highway to Business
Lecture 2: Knowledge, Innovation, and Creativity: Highway to Transformation
Lecture 3: Digital Transformation of Ecosystems: Past, Present, and Future
Lecture 4: Waves, Disruption, and Responsible Innovation: Toward Transformation?
,A Review of Innovation Models (Tidd, 2006)
Evolving models of the innovation process
Early models saw innovation as a linear sequence of functional activities:
• Technology push: new opportunities arising out of research give rise to applications and
refinements which eventually find their way to the marketplace
• Need pull: the market signals the need for something new which then draws out new
solutions to the problem
In practice, innovation is a coupling and matching process, where interaction is the critical
element
• Innovation requires interaction between push and pull
Rothwell’s five generations of innovation models:
Generation Key features
First/second The linear models
Third Interaction between different elements and feedback loops between them, the
coupling model
Fourth The parallel lines model, integration within the firm, upstream with key
suppliers and downstream with demanding and active customers, emphasis on
linkages and alliances
Fifth Systems integration and extensive networking, flexible, and customized
response, continuous innovation
Consequences of partial understanding of the innovation process
Mental models are important because they help us frame the issues which need managing, but
therein also lies the risk. If our mental models are limited, then our approach to managing
innovation is also likely to be limited.
Problems of partial views of innovation
If innovation is only … the result can be
seen as…
Strong R&D capability Technology that fails to meet user needs and may not be accepted
The province of Lack of involvement by others, and a lack of key knowledge and
specialists experience input from other perspectives in the R&D
Understanding and Lack of technical progression, leading to the inability to gain a
meeting customer competitive edge
needs
Advances along the Producing products or services which the market does not want or
technology frontier designing processes that do not meet the needs of the user and
whose implementation is resisted
The province only of Weak small firms with too high a dependence on large customers.
large firms Disruptive innovation as insignificant small players seize new
technical or market opportunities
Only about Neglect the potential of incremental innovation: with an inability
‘breakthrough’ changes to secure and reinforce the gains from radical change because the
incremental performance ratchet is not working well
Only about strategically May miss out on lucky ‘accidents’ which open up new possibilities
targeted projects
Only associated with Failure to utilize the creativity of the remainder of the employees,
key individuals and to secure their inputs and perspectives to improve innovation
, Only internally The ‘not invented here’ effect, where good ideas from outside are
generated resisted or rejected
Only externally Innovation becomes simply a matter of filling a shopping list of
generated needs from outside and there is little internal learning or
development of technological competence
Only concerning single Excludes the possibility of various forms of inter-organizational
firms networking to create new products, streamline shared processes,
etc.
The challenge of discontinuous innovation
Creative destruction: certain ‘steady state’ innovation conditions are punctuated by occasional
discontinuities which can cause one or more of the basic conditions (technology, markets, social,
regulatory, etc.) to shift dramatically.
Sources of discontinuity:
• New markets: new markets emerge which cannot be analyzed or predicted in advance or
explored through conventional market research/ analytical techniques
• New technologies: may result from convergence and maturing of several streams or as a
result of a single breakthrough
• New political rules: political conditions which shape the economic and social rules may shift
dramatically
• Market exhaustion: escape the increasing competition of industry structures by either exit
or by radical reorientation of their business
• Sea change in market sentiment or behavior: public opinion or behavior shifts slowly and
then tips over into a new model
• Deregulation: political and market pressures lead to shifts in the regulatory framework and
enable the emergence of a new set of rules
• Fractures along ‘fault lines’: long-standing issues of concern to a minority accumulate
momentum and suddenly the system tips over
• Unthinkable events: events which, sometimes literally, change the world and set up new
rules of the game
• Business model innovation: established business models are challenged by a reframing,
usually by a new entrant who redefines/reframes the problem and the consequent ‘rules of
the game’
• Shifts in techno-economic paradigm: the convergence of a number of trends which results
in a ‘paradigm shift’ where the old order is replaced
• Architectural innovation: changes at the level of the system architecture rewrite the rules
of the game for those involved at the component level
Networks and Systems of Innovation
Analysts like Porter (1990) have shown that business firms, and even the largest ones competing
in global markets, are strongly influenced in their choice of technological strategies by the
conditions existing in their home countries
• Patterns of national demands:
− Local ‘demand pull’ for certain types of products generates innovation opportunities for
local firms, especially when demand depends on face-to-face interactions with customers
− Local investment activities, which create innovative opportunities for local suppliers of
machinery and production inputs, where competence is accumulated mainly through
experience in designing, building, and operating machinery
− Local production input prices, where international differences can help generate very
different pressures for innovation
