Article - Innovation Theories (Joe Tidd) (Part 1)

Question 1

What is meant by innovation as a process?

Answer 1

Innovation shapes the way in which we try to manage it

Question 2

How do early models of the innovation process see innovation?

Answer 2

As a linear sequence of functional activities.

Question 3

What are two ways of innovation according to the early models and what do they mean?

Answer 3

1. Technology Push
   New opportunities come from research and encompass new applications or refinements. These are pushed to the market.
2. Need pull
   Market signals for something new –> new solutions are invented.

Question 4

What are the limitations of technology push and need pull concepts?

Answer 4

Innovation requires interaction between both the demand side and the supply side.

Question 5

What are the modifiers that Ven et al. (2000) added to the basic model of innovation?

Answer 5

1. Shock triggers innovation (for example: customer dissatisfaction)
2. Ideas proliferate (they grow rapidly in all kinds of directions);
3. Setbacks arise often, plans are optimistic, commitments escalate, mistakes happen;
4. Restructuring of the innovating unit often occurs through external intervention and unexpected events;
5. Top management plays a key role in sponsoring (and criticizing as well);
6. Criteria for success change over time and differ between groups;
7. Innovation involves learning, but much of the outcome is due to other events that occur during innovation development;

Question 6

What are the five historical stages of innovation management according to Roy Rothwell?

Answer 6

1. First and second generation models
   (Linear -> pull and push)
2. Third Generation Models
   (Interaction between elements and feedback loops between them)
3. Fourth generation models
   (Parallel lines model –> Integration with firm, suppliers, customers. Emphasis on linkages and alliances)
4. Fifth generation models
   System integration and extensive networking, flexible and customized response, continuous innovation –> business networks)

Question 7

What are examples of only partially understanding the innovation process?

Answer 7

1. Seeing innovation as either push or pull;
2. Seeing innovation only as major breakthroughs, ignoring incremental innovation;
3. Seeing innovation only as a single isolated change;
4. Seeing innovation only as a product or process;

Question 8

What can be seen as the challenge of discontinuous innovation?

Answer 8

Sometimes, non-every day events change the rules of the game of innovations. This can lead to challenges, but can also be an enabler of new innovations.

Question 9

What is the original theory on innovation by Schumpeter?

Answer 9

Innovation involves a process of creative destruction. Occasional discontinuities can cause one of the basic conditions (technology, markets, social regulatory) to shift dramatically. This can change the rules of the game and create new opportunities.

Question 10

What are 11 triggers of discontinuity (and think in your head what they mean and what problems they pose)?

Answer 10

1. New markets;
2. New technologies;
3. New political rules;
4. Market exhaustion;
5. Sea change in market sentiment or behavior;
6. Deregulation / shifts in regulatory regime;
7. Fractures along ‘fault lines’;
   8: Unthinkable events;
   9: Business model innovation;
   10: Shifts in ‘techno-economic paradigm’ - systematic changes that impact whole sectors or even whole societies;
   11: Architectural innovation;

Question 11

Which two forms of innovation are there?

Answer 11

1. Repeated, continuous innovation
   Can be incremental or big steps –> rules of the game remain the same
2. Innovation as being discontinuous
   Things happen that change the rules of the game. You, as a company, need to adapt

Question 12

What does the theory/model about the innovation life cycle from Abernathy and Clark (1985) describe

Answer 12

–> They focus on three distinct stages of innovation that happen under discontinuous conditions and that concern a whole market.

Main focus: fluid phase –> The initial phase after the discontinuous conditions

In that stage: There is uncertainty about the target (what is the new configuration and who wants it). There are many experiments and failure, but that causes fast learning. Eventually, there comes a dominant design that starts to define the rules of the game. The most popular solution becomes the baseline for other plays in the market as well, and innovation regards getting bugs out.

–> There is co-existence of the old and the new technology, both if which are rapidly improved.

Question 13

What are three characteristics of firms in the innovation life cycle regarding success?

Answer 13

• Existing incumbents in the market can do bad or well (no clear one way);
• New entrants play strong role in early phase (but we only see the successful ones);
• The management of innovation is most important to see if they succeed;

Question 14

What does the theory of Clayton Christensen describe?

Answer 14

• When there are market disruptions, established companies fail to innovate and stay competitive;
• They are too focused on the demands of current customers;
• Fail to see long-term potential of the newly emerging market;
• Disruption changes rules of the game –> these are re-written by the new players;

Question 15

What does more recent research by Christensen and Raynor (2003) state regarding market discontinuity?

Answer 15

• There are two dimensions of market discontinuity in which the established firms might fail:

1. Disruption due to new bundle of performance measures competing against existing markets;
2. Disruption because of non-consumption (leads to the creation of completely new markets);

Question 16

What are two characteristics of disruptive products/markets according to Christensen and Raynor (2003)

Answer 16

1. Disruptive products can begin in high technology markets (pioneering) or low technology markets (new configurations)
   - -> therefore there should be a focus on technology inputs and impact (not only distinction between incremental and radical innovation)
2. Market disruption often requires a firm to change their network, leading to weaker ties –> can influence their innovation potential.

Question 17

What considerations are there for network and systems of innovation in relation to geographical location of firms?

Answer 17

• Many firms have their innovative activities in their home country;
• They draw on only 1 or 2 countries for strategic skills and expertise in innovation;
• Business firms are strongly influenced by conditions in their home country;
• The national system of innovation in which a firm is positioned matters greatly –> influences direction and vigour(power) of their own innovative activities;

Question 18

Which 4 factors (national/firm) influence the rate and direction of innovation?

Answer 18

1. Market incentives;
2. Market pressures;
3. Firm competencies in production;
4. Firm competencies in research;

Question 19

What are 5 patterns of national demand that help explain innovative activities?

Answer 19

1. The more local demand -> the more innovation opportunities;
2. The local price conditions;
3. Local investment activities (private and public) -> can create opportunities for input production innovation or machinery innovation)
4. Local production input prices (–> drives the pressure to innovate)
5. Local natural resources;

Question 20

What is an additional (national) influence on innovation that is subtle but substantial?

Answer 20

• Social concerns and pressure on the environment, public safety and corporate governance
• -> focus on sustainability;
• -> Not taking this into account –> high risk of failure;

Question 21

What are limitations on how innovation is currently conceptualized, according to Berkhout & Green, 2003?

Answer 21

1. Only focussing on managers, the firm or the supply chain is too narrow –> many other actors/firms are included;
2. Focus on specific technology or product is not right, should be on technological systems and their evolution;
3. The idea that innovation is the consequence of coupling technological opportunity and market demand is too limited and needs to include less obvious social concerns, expectations and pressures as well;

Question 22

What are the main national factors that influence the rate and direction of technological innovation?

Answer 22

• Patterns of national demand;
• Competitive rivalry;
• Competencies in production and research;

Question 23

Why is making gigantic firms not good for global competitiveness?

Answer 23

You reduce the competitive rivalry within a country. This means that companies have less incentives to innovate, because there is no immediate threat to their existence. Less innovation makes them less able to compete in global markets.

Question 24

What is the relation of national competencies in product and research on the innovation of firms?

Answer 24

• Firms often use support, knowledge and skills from national universities, because the knowledge they seek is tacit and person-embodied;
• The technological fields in which innovation happens in a country are often tied to the nations specific national research competence (field);
• Available national natural resources influence innovation field (materials in sweden etc.);

Question 25

Why should the focus be on innovation on a network level?

Answer 25

• Using a wide set of knowledge sources to compete on a global level;
• Collaboration instead of doing things in-house or outsourced;
• Network can be a mode of innovation through collaboration;

Question 26

What is an engineered network?

Answer 26

• Building innovation networks in a purpose-built fashion.
• Focus on creating an innovative product by combining different combinations of knowledge;
• Firms do this when they have innovation problems and realize they can gain traction through networking;

Question 27

What are the seven types of innovation networks?

Answer 27

1. New product or process development consortium;
2. Sectoral Forum;
3. New technology development consortium;
4. Emerging standards;
5. Supply chain learning;
6. Cluster;
7. Topic network;

Question 28

What is a sectoral forum?

Answer 28

Shared concern to adopt and develop innovative good practice across a sector or product market grouping;

Question 29

What is an emerging standards innovation network?

Answer 29

Exploring and establishing standards around innovative technologies;

Question 30

What is a cluster innovation network?

Answer 30

Regional grouping of companies to gain economic growth through exploiting innovation synergies;

Question 31

What is a topic network?

Answer 31

Mix of firms to gain traction on key new technologies;