Summary of all lectures of Innovation and Technology Management including all the course material covered in class and supported with graphs and examples when needed. The summaries were developed in the academic year of 2019/2020 during my 3rd year of IBA.
They helped me to get a 9 in the final ex...
Lecture 1
● Innovation is a novel creation that generates value
● It can be:
○ Tangible: a product (e.g. phone, computer, car)
○ Intangible: a form of service (e.g. app, webshop, service with app and
website and even hardware to back it up, e.g. an airline)
● Many innovations are intangible
Types of Innovation
Product Innovation (tangible)
● Developing a radically new product, which has not existed so far (e.g. smartphone,
electric car)
● Improving functional qualities and/or design in existing products (new line of iPhone)
Service Innovation (intangible)
● Improving the service delivered to customers (e.g. Booking.com, Airbnb)
● Improving the way “things are done” (e.g. Uber, Airbnb)
Process Innovation (intangible)
● Improving the manufacturing process to produce the existing products at a lower cost
or with a better quality
● Improving the way “things are done”
Marketing Innovation (intangible)
● Improvements in any of the other elements in the marketing mix
Radical Innovation
● Developing a radically new product or service, which had not existed so far
Incremental Innovation
● Improving functional qualities and/or design in existing products and/or services
● Most commonly pursued by companies
● We know that innovation is about: New, Creative, Different, Improvement.
● However, the goal is to create value with this innovation
○ Innovation: A novel creation that generates value.
● Innovation is all about change.
○ Where does change come from?
○ NEW IDEAS ➔ ‘The process of creating value from ideas’
● The logic is simple: If we don’t change what: - we offer to the world (e.g. products
and services), and - how we create and deliver them, we risk being overtaken by
others who do. Those enterprises which survive do so because they are capable of
regular and focused change.
,Why Innovation is Crucial
● The innovation challenge isn’t new - organisations have always had to think about
changing what they offer and the ways they create and deliver that offering if they are
going to grow
● The trouble is that innovation involves a moving target - not only is there competition
amongst players in the game but the overall context in which the game is played out
keeps shifting
● Companies are currently operating in a highly complex and highly dynamic
environment:
○ Highly competitive global environment
○ Highly complex technological dynamics
○ Highly complex and interconnected global environment
● Developing innovations is highly complex, highly dynamic and highly uncertain
● How do companies address this?
○ Companies make innovation and innovation management a top priority
○ Companies invest substantial resources (financial, human, technological, etc.)
to innovation
○ Companies try to improve their innovation and technology management
processes
○ Innovation is at the core of the business
Research Note: Innovation is a Big Issue
● OECD countries spend $1500 billion/year on R&D
● More than 16,000 firms in the USA currently operate their own industrial research
labs and there are at least 20 firms with annual R&D budgets > $1bn
● China has ambition to spend 2.5% of GDP on research by 2020
● South Korea is most R&D intensive country spending 4.26% of GDP
● In 2008 16.8% of all firms turnover in Germany was earned with newly introduced
products and in the research-intensive sector this was 38%.
Innovation Matters and Makes a Difference
● Jones, T. and McCormick, M. Dewin, C. (2012)
○ Analysed the link between those organisations which invest consistently in
innovation and their subsequent performance
○ Findings: over a sustained period of time there is a strong positive link
between the two
■ Innovative organisations are more profitable and more successful
■ Jones, et al. defined those organisations as “Growth Champions”
● Arthur D. Little (2012)
○ The consultancy Arthur D. Little conducts a regular survey of senior
executives around the world exploring innovation
, ○ In their 2012 survey of 650 organisations the following emerged:
■ Top quartile innovation performers obtain on average 13% more profit
from new products and services than average performers, and 30%
shorter time-to-break-even, although the gap is narrowing
■ There is a clear correlation between capability in innovation
measurement and success
■ That a number of key innovation management practices have a
particularly strong impact on innovation performance across industries
What is technology?
● Technology is the branch of knowledge dealing with engineering or applied
sciences.
● Innovation and technology are interconnected
● Implication: Managing Innovation (often) involves and requires managing technology
as well
A Framework and Key Questions Around Managing Innovation
The Innovation Space and Its 4 Dimensions
● Essentially we are talking about change, and this can take several forms; for the
purposes of this we will focus on our broad categories
○ Product Innovation
■ Changes in the products/services, which an organisation offers
○ Process Innovation
■ Changes in the ways in which they are created and delivered
○ Position Innovation
■ Changes in the context in which the products/services are introduced
○ Paradigm Innovation
, ■ Changes in the underlying mental models which frame what the
organisation does
Examples of the 4Ps Model
(first column = incremental innovation; second column = radical innovation)
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