L1

Question 1

Digital Technologies

Characteristics

Answer 1

1. Homogenization & Decoupling
2. Connectivity
3. Reprogrammable & Smart
4. Digital Traces
5. Modularity

Question 2

Homogenization & Decoupling =

+ Consequences

Answer 2

Homogenization & Decoupling = All digital information assumes the same form, therefore it can at least in principle, be processed by the same technologies.
* consequently, digitizing has the potential to remove the tight couplings between information types and their storage, transmission, and processing technologies.

Consequences
1. Low Marginal Costs
o digitized information can be transmitted, stored and computed in fast and low cost ways
o Moore’s Law: computing power (costs, speed) improves exponentially
* Implications for innovation: disruption, winner-takes-all

2. Convergent User Experience
   * Implications for innovation: convergence of industries; combinatorial innovation (- map + compass on iPhone)

Question 3

Connectivity =

+ Consequences

Answer 3

Connectivity = Connections with other users / other applications / between firm and customer

Consequences
1. (direct) network externalities: when the value of a good to a user increase with the number of other users (installed base) of the same or similar good digitized information

• Implications for innovation: disruption, winner-takes-all, ecosystems

2. Interoperability: the ability of a product or system to work with other products or systems.
   o Standardized and open interfaces
   o interoperability drives network externalities.

• Implications for innovation: platform ecosystems, combinatorial innovation

Question 4

Reprogrammable & Smart =

+ Consequences

Answer 4

Reprogrammable & Smart =
Digital products can be edited and reprogrammed (software updates)
By supplier (connectivity) or autonomously (machine learning)
Using sensors, processors, actuators

Consequences
1. Emerging functionalities:
o product versioning
o differentiation
o incompleteness
o backward & forward compatibility
o “evergreen design”?
* Implications for innovation continuous development, agility, cross-functional integration

2. Servitization:
   o Shift towards “service” (value, experience) that products offer (“job to be done”)
   o Shift towards pay for use instead of pay for ownership (“pay per lux”, “power by hour”, “X as a Service”)
   o Hybrids: interdependence: products require service and services require some form of product or artifact
   o Hybrids: integrating products and services into complex systems

Question 5

Challenging Key Assumptions of Innovation Management Theories

Answer 5

• How do innovations form/evolve?
  Assumption: innovation is a well-bounded phenomenon focused on fixed products.
• How should actors/entities organize for innovation?
  Assumption: the nature of innovation agency is centralised, and therefore people can organise for innovation
• How does the nature of innovation and the organization of innovation interact?
  Assumption: innovation processes and outcomes are distinctly different phenomenon and therefore there is interaction between the nature and organization

Question 6

How do (digital) innovations evolve?

Answer 6

How do (digital) innovations evolve?

• From fixed boundaries to fluidity

Digital innovation: the scope, features and value of digital offerings can continue to evolve even after the innovation has been launched or implemented. boundaries on what is or is not an innovation outcome have become more porous and fluid.

Question 7

How should entities organize for (digital) innovation?

Answer 7

How should entities organize for (digital) innovation?

• From centralised to distributed

Digital innovation: there is a shift toward less predefined and more open innovation, and network-centric innovation.

Innovation context wherein a dynamic and often unexpected collection of actors with diverse goals and motives—often outside the control of the primary innovator—engage in the innovation process

Question 8

How does the nature of innovation and the organization of innovation interact?

Answer 8

How does the nature of innovation and the organization of innovation interact?

• from distinction –> to interdependence of process and outcome

Question 9

4 New Logics of Theorizing about Digitization of Innovation

Answer 9

1. Dynamic problem–solution design pairing
2. Socio-cognitive sensemaking:
3. Affordances and constraints
4. Orchestration

Question 10

New Logics of Theorizing about Digitization of Innovation

socio-cognitive sensemaking =

Answer 10

Successful digital innovation depends on how actors come to understand, share with others, and then modify their understandings of innovation outcomes, processes, and related markets.

Critical element of digital innovation management: how do digital technologies interact with innovation agents (organizations or individuals) to foster innovative socio-cognitivesensemaking.

socio-cognitive sensemaking = that the technology is being made sense of in:
* an individual innovator’s cognition
* and the innovator’s social system of collectives of organizations and individuals.

Question 11

New Logics of Theorizing about Digitization of Innovation

Technology affordances and constraints:

Answer 11

Affordance = is an action potential offered by digital technology

Thus, the focus is not on what features digital tools or artifacts possess, but how actors’ goals and capabilities can be related to the inherent potential offered by the features.

Innovators use set as affordances and constraints for:
1. explaining how and why the same technology can be repurposed by different actors as different innovation outcomes

2. enable seperating digital innovations that emerge during the process of connecting use context and features through constant problem-solution matching.

Question 12

New Logics of Theorizing about Digitization of Innovation

Orchestration =

Answer 12

Orchestration = can be viewed in terms of the matching of problems and needs with potential solutions.

Digital technologies also play a more indirect and supportive role in innovation orchestration

–> Uber

Question 13

Methodologies that could potentially offer novel insights to the study of digital innovation:

Answer 13

• Computational Social Sciences.
  = a set of methodologies for exploring human behavior computationally.
• Configurational analysis
  = Identifying problem-solution pairs and technology affordance research creates a need for methodologies that focus on matching specific conditions for specific outcomes, rather than variance explanation
• Complexity Theory Methods
  = Complexity theory has long suggested the central role of bottom-up emergence of self-organization, absent outside direction

Question 14

Pervasive digital technology =

Answer 14

Pervasive digital technology =
the incorporation of digital capabilities into objects that previously only had a physical materiality.

Question 15

Digital technology

Unique properties

Answer 15

1. Reprogrammable functionality
2. Data homogenization.

–> Together, they provide an environment of open and flexible affordances that are used in creating innovations characterized by convergence and generativity.

Question 16

Technology affordance =

Answer 16

Technology affordance =
‘an action potential, that is, to what an individual or organization with a particular purpose can do with a technology or information system.

The affordances of pervasive digital technologies create innovations characterised by
1) convergence and 2) generativity.

Question 17

The affordances of pervasive digital technologies create innovations characterised by:

1) Innovation of Convergence =

Answer 17

Innovation of Convergence =
the act of converging and especially moving toward union or uniformity

1. Brings previously separate user experience together: (Spotify - phone + music)
2. Integration of digital and material (smartphone, compass/maps ect.)
3. Convergence in industries: the initial convergence of media and products brings together previously separate industries –> Skype competes with telecommuniction

Question 18

The affordances of pervasive digital technologies create innovations characterised by:

2) Innovation of Generativity =

Answer 18

Innovation of Generativity =
a technology’s overall capacity to produce unprompted change driven by large, varied, and uncoordinated audiences.

–> Digital technologies become inherently dynamic and malleable

Resulting in: change of organisational function

1. reprogrammable nature, ( new capabilities can be added after a product or tool has been designed and produced - smartphone apps)
2. Wakes of Innovation (3D Technology changed the role and scope of product managers.)
3. Digital traces as by-products is a consequence of the use of pervasive digital technology being generative

Question 19

The role of Platform can be seen from 2 perspectives:

Answer 19

1. To harness the convergence and generativity made possible, firms now innovate by creating platforms rather than single products.
   The platform creates an ecosystem that includes heterogeneous actors. One of the imperative is how to design, build, and sustain a vibrant technology. –>
   Loosely coupled vs tight coupled?

2.
to build a platform not just of products but of digital capabilities used throughout the organization to support its different functions.
For example, large complex information systems such as ERP are increasingly serving as a platform to which other tools can be added in order to take advantage of shared data resources

Allow firms to build platforms of digital capabilities used through the organisation to support function (rather than of products).

Question 20

Three traits of innovations with pervasive digital technology that are shaped by convergence and generativity

Answer 20

Organizational Innovation with
Pervasive Digital Technology

1. The importance of digital technology platforms
2. the emergence of distributed innovation
3. The prevalence of combinatorial innovation

1. The importance of digital technology platforms
   - The role of platforms can be seen from two perspectives:
   * to harness the convergence and generativity made possible firms now innovate by creating platforms rather than single products.
   * the proliferation of digital tools or digital components allows firms to build a platform not just of products but of digital capabilities used throughout the organization to support its different functions.
   For example, large complex information systems such as ERP are increasingly serving as a platform to which other tools can be added in order to take advantage of shared data resources
   IMPLICATIONS:
2. organisations must be designed to manage the delicate balance of generativity and control in the platform. → Too much control, it might run out third-parties, thus reducing the generativity of its platform. → Not enough control, platform becomes to varied and fragmentated, and firm cant catch value from its own innovation
3. Sharing strucutre on platforms challenges norms of ownership, roles, and rules, often triggering new configuration of relationships.
4. innovation activities increasingly become horizontal as efficiencies are gained by applying the same innovation activities and knowledge across multiple products or platforms
5. the emergence of distributed innovation
   - Generativity of distributed innovation suggests that knowledge resources will be increasingly heterogeneous and often only temporarily integrated, with levels of heterogenity and integration changing dynamically in response to unpredictable changes from inside and outside the firm’s ecosystem
   IMPLICATIONS:
   - innovation requires that others be enabled to innovate as well
   - emergence of new industrial structures
   - new forms of risk (unintended consequences)
6. The prevalence of combinatorial innovation
   - . Increasingly, firms are creating new products or services by combining existing modules with embedded digital capabilities.
   IMPLICATIONS:
   - modularity is a crucial condition for combinatorial innovaiton
   * with traditional design, modules are created through decomposition of complex products. With combinatorial innovation, modules are designed without knowing the whole design of how each module will be integrated
   * with digital innovations, the boundary of a product is unknowledge, and product remains incomplete. For instance, a smartphone is essentialy incomplete and functional capabilities are changed by adding applications. Therefore, more dynamic product bounderies are needed
7. organizations need to invest in creativity
8. how innovation diffuse in an industry
   * instead of S curve diffusion model, the contagious spread of ideas in a social network context
9. heightened complexitity of innovation process

Question 21

Three traits of innovations with pervasive digital technology that are shaped by convergence and generativity

1. The importance of digital technology platforms

Answer 21

1. The importance of digital technology platforms
   - The role of platforms can be seen from two perspectives:
   * to harness the convergence and generativity made possible firms now innovate by creating platforms rather than single products.
   * the proliferation of digital tools or digital components allows firms to build a platform not just of products but of digital capabilities used throughout the organization to support its different functions.
   For example, large complex information systems such as ERP are increasingly serving as a platform to which other tools can be added in order to take advantage of shared data resources
   IMPLICATIONS:
2. organisations must be designed to manage the delicate balance of generativity and control in the platform. → Too much control, it might run out third-parties, thus reducing the generativity of its platform. → Not enough control, platform becomes to varied and fragmentated, and firm cant catch value from its own innovation
3. Sharing strucutre on platforms challenges norms of ownership, roles, and rules, often triggering new configuration of relationships.
4. innovation activities increasingly become horizontal as efficiencies are gained by applying the same innovation activities and knowledge across multiple products or platforms

Question 22

Three traits of innovations with pervasive digital technology that are shaped by convergence and generativity

2. the emergence of distributed innovation

Answer 22

2. the emergence of distributed innovation
   - Generativity of distributed innovation suggests that knowledge resources will be increasingly heterogeneous and often only temporarily integrated, with levels of heterogenity and integration changing dynamically in response to unpredictable changes from inside and outside the firm’s ecosystem

IMPLICATIONS:
- innovation requires that others be enabled to innovate as well
- emergence of new industrial structures
- new forms of risk (unintended consequences)

Question 23

Three traits of innovations with pervasive digital technology that are shaped by convergence and generativity

3. The prevalence of combinatorial innovation

Answer 23

3. The prevalence of combinatorial innovation
   - . Increasingly, firms are creating new products or services by combining existing modules with embedded digital capabilities.

IMPLICATIONS:
1 modularity is a crucial condition for combinatorial innovaiton
* with traditional design, modules are created through decomposition of complex products. With combinatorial innovation, modules are designed without knowing the whole design of how each module will be integrated
* with digital innovations, the boundary of a product is unknowledge, and product remains incomplete. For instance, a smartphone is essentialy incomplete and functional capabilities are changed by adding applications. Therefore, more dynamic product bounderies are needed
2. organizations need to invest in creativity
3. how innovation diffuse in an industry
* instead of S curve diffusion model, the contagious spread of ideas in a social network context

4. heightened complexitity of innovation process