Keywords Flashcards
Technology push (Tidd)
Applications and refinements which eventually found their way to the marketplace
Need pull (Tidd)
The market signaled needs for something new which then drew out new solutions to the problem (necessity becomes the mother of invention)
Shock trigger innovations (Tidd)
Change happens when people or organizations reach a threshold of opportunity or dissatisfaction
Ideas proliferate (Tidd)
After starting out in a single direction, the process proliferates into multiple, divergent progressions
Fluid phase (Tidd)
High uncertainty along two dimensions
Target: What will the new configuration be and who will want it?
Technical: How will we harness new technological knowledge to create and deliver this?
No one knows the right configuration, there is extensive experimentation and fast learning by a range of players
Dominant design (Tidd)
Something which begins to set up the new rules of the game
Technological trajectory (Tidd)
A ‘bandwagon’ begins to roll and innovation options become increasingly channelled around a core set of possibilities
Sailing ship effect (Tidd)
A mature technology accelerates its rate of improvement as a response to competition with new alternatives, as was the case with the development of sailing ships in competition with newly emerging steamship technology
Strong ties (Tidd)
Close and consistent relationships with regular partners in a network
Incentives and Pressures that influence the rate and direction of technological innovation (Tidd)
- Patterns of national demands: Strong local ‘demand pull’ for certain types of products, generates innovation opportunities for local firms (investment activities, production input prices, local natural resources)
- Competitive rivalry: Stimulates firms to invest in innovation and change, because their existence will be threatened if they don’t
Competencies in Production and Research that influence the rate and direction of technological innovation (Tidd)
The incentives and pressures will not result in innovation unless firms have the competencies that enable them to respond.
- Seek support in new knowledge/open innovation (universities and research centers)
- Leverage the network of the company (the whole is greater than the sum of its parts)
9 factors that influence the firm’s capacity to benefit commercially from its technology (Tidd)
- Secrecy: But, it is unlikely to provide absolute protection. Also, firms that share their knowledge outperform those that do not
- Accumulated tacit (understood/implied without being stated) knowledge: When closely integrated in firms, it can be long and difficult to imitate (Italian firms in clothing, Rolls-Royce in aircraft engines)
- Lead times and after-sales service: Protection against imitation by higher cost of entry for imitators. It can establish brand loyalty and credibility, accelerate feedback from customer use to product improvement and learning curve cost advantages
- The learning curve: Lower cost and powerful form of tacit knowledge that is well recognized by practitioners. The first-comer advantage
- Complementary assets: Production, marketing and after-sales to complement the technology
- Product complexity: Long lead times (imitation of planes takes very long), it is an effective barrier to imitation
- Standards: Widespread acceptance of a company’s product standard widens its own market and raises barriers against competitors
- Pioneering radical new products: Not always an advantage because of the risk. Success goes to the ‘early entrants’ with the vision, patience and flexibility to establish a mass consumer market
- Strength of patent protection: They are judged to be more effective than process innovations in protecting product innovations
5 factors that affect the rate and extent of adoption of an innovation (Tidd)
- Relative advantage: Degree to which an innovation is perceived to be better than the product it supersedes, or competing products (convenience, satisfaction, social prestige etc.) The greater the perceived advantage, the faster the rate of adoption
- Compatibility: Degree to which an innovation is perceived to be consistent with the existing values, experience and needs of potential adopters (availability of information, skilled users, technical assistance and maintenance)
- Complexity: Degree to which an innovation is perceived to be difficult to understand or use. Simple to understand = more rapid adoption
- Trialability: Degree to which an innovation can be experimented with on a limited basis. More learning by doing = more rapid adoption
- Observability: Degree to which the results of an innovation are visible to others. Easier to see the benefits of an innovation = more likely to be adopted
What are demand-side (statistical) and supply-side (sociological) models? (Tidd)
Demand-side
o Epidemic, based on direct contact with or imitation of prior adopters
o Bass, based on adopters consisting of innovators and imitators
o Probit, based on adopters with different benefit thresholds
o Bayesion, based on adopters with different perceptions of benefits and risk
Supply-side
o Appropriability, which emphasizes relative advantage of an innovation
o Dissemination, which emphasizes the availability of information
o Utilization, which emphasizes the reduction of barriers to use
o Communication, which emphasizes feedback between developers and users
What are the conclusions (Tidd)
- We need to identify more fruitful ways to begin a more constructive dialogue between pharmaceutical innovation research, policy and practice. There is scope for disruptive innovation from discontinuous technological (e.g. biotechnology), and market changes (funding and regulation of healthcare), but the current conceptualization of innovation in the sector and relationships between actors are likely to simply reinforce historical shortcomings.
- A shift away from an emphasis on inputs, such as the science base and radical technological advances, towards a more balanced support for the whole innovation process, which includes development and diffusion of all types of innovation – technological, commercial, and organizational.
- The assumption that innovation is the consequence of coupling technological opportunity and market demand is too limited. It needs to include the less obvious social concerns, expectations and pressures. These may appear to contradict stronger, but misleading market signals.
- Cumulative incremental improvements to platform technologies often create significant commercial and social benefits.
- Long-term investments in and development of organizational processes and capabilities are necessary to translate scientific and technological opportunities into successful new products and services that are widely adopted and supported.
- An equal and sometimes greater emphasis is needed on the outputs of the innovation process, specifically the processes of diffusion and adoption of innovations. This includes non-zero-sum issues of commercial appropriability and social externalities.
Performance trajectories (Bower & Christensen, 1995)
The rate at which the performance of a product has improved and is expected to improve over time
Sustaining technologies (Bower & Christensen, 1995)
Maintain a rate of improvement, they give customers something more or better in the attributes they already value
Disruptive technologies (Bower & Christensen, 1995)
Introduce a very different package of attributes from the one mainstream customers historically value and they often perform far worse along one or two dimensions that are particularly important to those customers.
Financial managers will rarely support it, technical personnel will likely do support it
Upmarket (Bower & Christensen, 1995)
Most established companies have higher cost structures to serve sustaining technologies with high(er) profit margins
Downmarket (Bower & Christensen, 1995)
Disruptive technologies with lower profit margins of the emerging markets
Method for spotting and cultivating disruptive technologies (Bower & Christensen, 1995)
- Determine whether the technology is disruptive or sustaining
- Define the strategic significance of the disruptive technology
- Locate the initial market for the disruptive technology
- Place responsibility for building a disruptive technology business in an independent organization
- Keep the disruptive organization independent
Technology S-curve (Ettlie)
Captures the “potential for technological improvement … resulting from a given amount of engineering effort,” which varies over time. First gradual and then rapid improvement of a product’s performance.
Can be used to forecast technology
Radical technology (Ettlie)
Length of time it takes to be truly different and produce something new to the world
Innovativeness (Ettlie)
A relative construct, relative to time, content (e.g. the firm may be innovative to production process but not product etc.) and reference domain (internal vs external), that is, compared to the firms various units, the industry, industry in general or other countries or economic regions.
Technological forecasting (Ettlie)
- The technology that is being forecast
- The time of the forecast
- A statement of the characteristics of the technology
- A statement of the probability associated with the forecast
If we know the shape of the curve, in this case the S-curve, then it is a matter of determining the a and b coefficients to fit the data to the curve.
The advantage of the Pearl curve (Raymond Pearl) is that shape (how steep) and location can be controlled independently to predict how quickly a technology will emerge and then gradually plateau.
Dominant design (Ettlie)
Not necessarily the most innovative design, it is a combination of features, often pioneered elsewhere
Evolution of the Productive Segment (Ettlie)
Successful firms tend to invest heavily in product R&D early in the life-cycle of an industry or product group. As the dominant design of a new product emerges, investments shift to process technology and strategies switch to cost minimization as opposed to product feature variety.
To compare the results of investments in manufacturing innovation.
At times the best choice may be to “slow or reverse evolutionary progress or to remain in that particular stage which offers the best trade-off between conflicting objectives (of adaptability and innovativeness vs higher productivity rates)
Diffusion (Ettlie)
Most recent research on diffusion of innovations indicate that network effects and network models are in vogue (very popular/fashionable). Networks magnify or diminish a company’s response to product announcements and new product awards. The issue of how companies acquire or change network position from fringe to centrality is still a strategic challenge.
Evolutionary theory (Ettlie)
The dynamic process by which firm behavior patterns and market outcomes are jointly determined over time. Firms search for new ideas (technological innovations) to make changes and some grow, whereas others decline.
Punctuated Equilibrium (Ettlie)
Technologies evolve through periods of incremental change punctuated by breakthroughs that either enhance (existing firms) or destroy (newcomers) competencies of existing firms in an industry
Jolt Theory of Change (Ettlie)
Organizations change only when they are jolted (pushed/shaken) from their environment. Abrupt alterations in environments are generally believed to jeopardize organizations, they offer propitious opportunities for organizational learning, administrative drama and introduction unrelated changes.
Disruptive technology (Ettlie)
- Companies depend on customers and investors for resources
- Small markets don’t solve the growth needs of large companies
- Markets that don’t exist can’t be analyzed
- Technology supply may not equal market demand
- Disruptive technologies are lower performing and lower profit than current technology
- Companies overshoot their markets with technology
Innovation Regimes (Ettlie)
Principles, norms and ideology, rules decision-making procedures forming actors’ expectations and actions in terms of the future development of a technology
Embedded digital capability (Yoo et al, 2010)
Cars, phones, televisions, cameras etc. offer novel functions and remarkably improved price/performance ratios that transform their design, production, distribution and use.
Digital innovation (Yoo et al, 2010)
The carrying out of new combinations of digital and physical components to produce novel products. (focus on product innovation). The new combination relies on digitization
Digitization (Yoo et al, 2010)
The encoding of analog information into digital format. IT makes physical products, programmable, addressable, sensible, communicable, traceable and associable.
Digital technology (Yoo et al, 2010)
- Reprogrammability: To perform functions
- Homogenization of data: Binary numbers
- Self-referential nature: Further accelerate creation and availability of digital devices, networks
Layered architecture (Yoo et al, 2010)
Bottom-up:
- Device layer: Hardware (physical), operating system (logical)
- Network layer: Cables, transmitters etc. (physical), standards such as TCP/IP or peer-to-peer (logical)
- Service layer: Application functionality
- Contents layer: Data such as text, sound, images, metadata etc.
Modular architecture (Yoo et al, 2010)
Offers an effective way to reduce complexity and to increase flexibility in design by decomposing a product into loosely coupled components interconnected through prespecified interfaces.
The key source of value creation is the agility that flows from the ability to rapidly recombine components of a modular product architecture positioned within a single design hierarchy without sacrificing cost or quality
Layered Modular architecture (Yoo et al, 2010)
A hybrid between a modular architecture and a layered architecture, where the degree by which the layered architecture adds the generativity to the modular architecture forms a continuum. Aggregating all components will make up the whole product. In a modular architecture, the design of a component is driven by the functional requirements created within the context of a given product.
The product remains fluid and is open to new meanings, unlike the purely layered architecture
Agnostic (Yoo et al, 2010)
Something that is not associated with something, open for meanings
Doubly-distributed (layered modular architecture) (Yoo et al, 2010)
(a) the control over product components is distributed across multiple firms, and (b) the product knowledge is distributed across heterogeneous disciplines and communities.