Lecture 6

Question 1

Innovation?

Answer 1

“Innovation is the process of turning new ideas into reality and capturing value from them” (Tidd & Bessant 2009)

“New ideas are resulting from creative combinations of existing knowledge “ (Schumpeter)

Toinnovateyou need to solveproblemsthrough creative combinationsofknowledge (Schumpeter)

Question 2

Creativity?

Answer 2

•  tendency to generate or recognize ideas, alternatives or possibilities that may be useful to solving problems •  “the use of imagination or original ideas to create something” •  Act of turning new and imaginative ideas into reality •  The process of having original ideas that have value

Creativity is needed in every stage of the innovation process

Question 3

Open innovation beyond R&D:

Answer 3

• lead user innovation
• crowdsourcing
• digital innovation : connection technlogies to technologies

Question 4

Layered modualr achritecture

Characteritsitc/propertie of digital innvation

Answer 4

1. Convergence
   - bringing people together previously separate knowledge
   - integration of digital and material
   - also converge in indusries
2. Generativity
   - wakes of innovation : use of digital technology cerates multiple products and services
   - digital traces as by-products
   - reprogrammability: new products can be added

Question 5

3 traits of innovation related to digital technology

Answer 5

1) Importance of digital technolgy platforms
Firms innovate by creating platforms more than products
2. Emergence of distributed innovation
User innvations is enhanced
3. Prevalence of combinatorial innovation
Mashing up modules, combining data from different sources

Question 6

What makes dittal innovation different from non-digiral innovation? Consequences

Answer 6

1. Network effect
   Network effect: the value of digital products often increases with the amount of other users and applications

Because of network effect: low marginal costs, therefore easy to scale up, leading to multibillion dollar companies with a limited number of employees

2. Importance of platform and ecosystems
   An innovation ecosystem: a group of interconnected and interdependent organizations that create and appropriate new value through innovation.

Ecosystems require platforms: a building block, which can be a product/technology/service that acts as a foundation upon which other firms can develop complementary products, technologies or services.

Firms now innovate by creating platforms rather than single products