Innovation management midterm

Question 1

What is innovation

Answer 1

Innovation is the creation of a novel decive, method, or process for the first time (up to a prototype)

Question 2

product innovation

Answer 2

are embodied in the output of a organization in its goods and services: technical specifications and quality improvements

Question 3

Process Innovation

Answer 3

innovations in the way an organizayion conducts its business, such as in the techniques of producing or marketing goods or services

Question 4

radical innovation

Answer 4

an innovation that is very new and different from prior solutions

Question 5

incremental innovations

Answer 5

an innovation that makes a relatively minor change from existing practices

Question 6

types of innovation

Answer 6

architectural vs modular, competence- enhancing vs competence destroying, disruptive vs sustaining innovations

Question 7

How to measure innovation

Answer 7

observational data, questionnaires sent to firms (asking about new products and processes), patents, R&D expenses

Question 8

Types of R&D

Answer 8

basic research, applied research, development

Question 9

basic research

Answer 9

the effort to understand fundamental scientific principles of a natural phenomena (for sake of knowledge, ie discovering black holes)

Question 10

Applied Research

Answer 10

the effort to understand fundamental scientific and technical principles with the aim to use the obtained knowledge for a specific application (ex research on cancer cells)

Question 11

development

Answer 11

the effort to use technical knowledge to produce something of commercial use (no new knowledge on fundamental principles needed)

Question 12

Actors in innovation

Answer 12

firms, universities, individuals, private nonprofits, government funded research

Question 13

In house R&D

Answer 13

create new knowledge and technologies that provide the basis for new products and services/ differentiate from competitors

Question 14

Absorptive Capacity

Answer 14

recognize the value of new information, to assimilate it and to apply it to commercial ends

Question 15

Internal and External R&D

Answer 15

Internal: preconditioned for accessing external knowledge
External: universities, suppliers, users, competitors
(interal and external R&D are complements and are more profitable if used together)

Question 16

Tradeoffs of R &DR vs D

Answer 16

uncertainty, financial costs, appropriability problems are exacerbated when doing research

Question 17

External Knowledge

Answer 17

other firms can be valuable sources of knowledge for innovation

Question 18

Learning happens through:

Answer 18

hiring away scientist and engineers, reverse engineering, and collaborations (licensing technologies, joint development

Question 19

Goverment

Answer 19

government play an important role by conducting research and paying for research done by others (firms and universities)

Question 20

Universities

Answer 20

mainly perform basic research, research generates knowledge that can be used by firms (11% of products would not have been developed without academic research)

Question 21

Technology Push

Answer 21

when there is a new technology that occurs before there is a need in the market (have to create market)

Question 22

Market Pull

Answer 22

customers are asking for a product that satisfies their needs (or firm detects customer needs)

Question 23

Technology Trajectories

Answer 23

the path of improvement a technology takes through its lifetime

Question 24

Moore’s Law

Answer 24

trend towards more powerful and smaller micro processors

Question 25

Technology S-Curve

Answer 25

• graphical representation of the development of a new technology over time
• compares some measure of performance with some measure of effort invested)
• slow initial progress, accelerated improvement, diminishing improvement

Question 26

Technological Improvements (s-curve)

Answer 26

improvements tend to be incremental, building on prior developments and take place within a existing paradigm (usually done by established firms)

Question 27

Shifting S-Curve

Answer 27

happens when existing technology reaches the point of diminishing returns
- new tech is developed to challeneg existing one

Question 28

Abernathy- Utterback Model

Answer 28

shift toward process inovation overtime
- rate of major innovation vs phases (fluid, transitional, specific)

Question 29

Industry Shakeout

Answer 29

term used to describe the consolidation of a industry, in which businesses are eliminated or acquired through competition

Question 30

shakeout (continued)

Answer 30

often occur after a industry experiences a period of rapid growth in demand followed by excess entry of new firms (large diversified companies can benefit)

Question 31

Distribution of adopters overtime

Answer 31

number of consumers who decide to buy the innovations at every point of time, most common adoption pattern

Question 32

Crossing the chasm

Answer 32

every customer segement has different needs (firm has to adapt), main challeneg is to meet early majority (chasm is between early adopters and early majority)

Question 33

Bass Model

Answer 33

s(t)= numbner of adopters at given time period t
m= the potential market
p= likelihood that a innovator adopts
q= likelihood that a imitator adopts
n (t-1)= number of adopters until moment (t-1)

Question 34

Why do standards develop?

Answer 34

increasing returns to adoption
- tech becomes more valuable the more it is adopted
- more tech is used, more it is understood/improved
-complmentary products are usually created alongside widelt adopted tech

Question 35

Two main sources of increasing returns

Answer 35

learning effects and network externalities

Question 36

winner-take-all (good for consumer?)

Answer 36

consumers benefit from the network externalities: complementary goods, higher compatibility, higher tech development
consumer suffers from monopoly consequences: higher prices, restricted product variety, less innovation

Question 37

Patent

Answer 37

legal right that prevents other from using a invention for a specific period of time on a given territory (in return for disclosure about tech details of the innovation)

Question 38

patent objective of government

Answer 38

incentive for innovation and contribute to technological advancements

Question 39

Patent Requirements

Answer 39

Novelty, inventive step (non-obvious), industrial applicability (useful)

Question 40

Novelty

Answer 40

invention has not been previously invented and it is not a trivial improvement

Question 41

inventive step

Answer 41

cannot be a small logical extension of existing one to a person who is a expert in the field

Question 42

industrial applicability

Answer 42

must be a functional purpose, does not have to have commercial value, inventor does not have to demonstrate that the invention works

Question 43

Defining Claims

Answer 43

part of patent application that defines the scope of protection granted by the patent, protection is sought in terms of tech features

Question 44

Advantages of patenting

Answer 44

• slow imitation and protect innovation
• prevents suits and use in negotiation
  -make “markets for knowledge” possible
• helps new firms raise money

Question 45

Patent Litigation

Answer 45

infringement: some makes, uses, sells or imports a innovation covered by the claims in you patent
patent owner can obtain: injunction prohibiting the infringing activity, loss profits or imputed royalties, defense strategy or infringer (patent interest should be invalid)

Question 46

Disadvantages of patenting

Answer 46

not always effective at preventing imitation, patent protection is relatively costly, resources needed to detect and prosecute potential infringers, patent protection implies mandatory disclosure of information, patent related processes are slow

Question 47

public policy problems

Answer 47

patent trolls, patent thickets, patent wars, submarine patents