Technology, innovation and disruption Flashcards
What is ‘technology’?
-Something designed to achieve a specific goal (instrumental action)
-Designed to increase knowledge by reducing uncertainty
What is innovation?
-Perceived as something new (not necessarily new)
-“Newness” expressed in terms of: knowledge, persuasion or decision to adopt
Describe the process chain of innovation
Old things are replaced by new things (creative destruction)
-Invention
-Innovation
-Diffusion
What are disruptive innovations?
-Disruptive innovations create new markets
-Unexpected source of value for buyers
(eg. cars once manufacturing costs decreased)
What is the motivation of innovation (for companies)?
-To control costs through improved manufacturing
-To increase (update) product range
-To respond to technology changes
How do technologies and innovations generally spread over time?
Market use follows an ‘S-shaped’ pattern over time
-Low use upon invention
-Rapid adoption once value is noticed and implemented into the market
-Plateaux once the majority of the market uses the innovation/technology
What are the 9 stages of Technology Readiness Levels (TRL)?
-TRL 1: Basic (scientific) principles observed and reported
-TRL 2: Technology concept/application formulated
-TRL 3: Proof of concept established (critical function)
-TRL 4: Lab testing of prototype or process
-TRL 5: Lab testing of integrated system
-TRL 6: Prototype system verified
-TRL 7: Integrated pilot system demonstrated
-TRL 8: System incorporated in commercial design
-TRL 9: Full scale deployment of system
What are the 3 types of innovation?
Accidental:
Unplanned, principal discovered by accident or random events (eg. penicillin)
Technology and knowledge push:
Process an underlying idea to create a product (eg. AI)
Market pull:
New products created in response to market/customer feedback
Does innovation have to be immediately after invention?
No, innovation depends on the feasibility of the invention to integrate into the market against current alternatives (eg. cars)
Known as recombinant innovation
What are the 5 phases of innovation, and where do they take place, from an industrial perspective?
1: Pure research (universities)
2: Basic research (universities/industry)
3: Applied research (industry/university)
4: Product development (industry)
5: Product design (industry)
What are the common motivations and funding sources during the ‘pure research’ stage of innovation?
Motivation:
-Scientific interest
-Individual curiosity
Funding:
-Charity (research grants) or publicly funded
What are the common motivations and funding sources during the ‘Basic Research’ stage of innovation?
Motivation:
-Technical challenge/scientific anomaly
-Development of scientific theme/program
-Potential commercial benefit
Funding:
-Charity (research grants) or publicly funded
What are the common motivations and funding sources during the ‘Applied Research’ stage of innovation?
Motivation:
-New innovation to market (addressing perceived needs)
-Demonstrate function of innovation
-Identify research requirements
Funding:
-Charity (research grants) or publicly funded
-Private funding
What are the common motivations and funding sources during the ‘Product Development’ stage of innovation?
Motivation:
-Private profit
-General commercial objectives
-Hard performance and cost objectives
Funding:
-Private funding
What are the common motivations and funding sources during the ‘Product design’ stage of innovation?
Motivation:
-Private profit
-General commercial objectives
-Focused on a specific product
Funding:
-Private funding
Explain the cost of innovation
-Negative initial cash flow due to product investment
-Once developed and sales start, positive cash flow takes over
-Cumulative cash break even point is met
-Continued profits from the break even point, eventually plateauing
Explain the consequences of no innovation
-Positive initial cash flow due to sales and no innovation
-Other innovated products take over the market, negative cash flow takes over
-Cumulative cash break even point is met
-Continued losses from the break even point, eventually plateauing (business dies)
What is the New product sales ratio?
Amount of money generated from the sales of new products:
New product sales ratio = Sales revenue of new products / Sales revenue
What is Research-and-development-to-product conversion (RDP)?
How effectively a company has generated income from an innovative product
RDP = New product sales ratio / (Innovation cost / Sales revenue
What is New-products-to-margin conversion (NPM)?
Effectiveness at profiting from new products
NPM = Gross profit to sales ratio / New product sales ratio
What are the properties of ‘Lean Startup’ during innovation?
-Innovation is risky, Lean Startup applied to reduce risk
-Obtain as much real customer data early
-Avoid fully developing a product until market demand is determined (first product is not fully developed)
-Change the products when new customer demands are observed
-Implement the minimum viable product
Explain the steps of the process of Lean Startup
-Main/new product ideas (hold product assumptions)
-Build (minimum viable product)
-Measure the product use (collect actionable metrics data)
-Learn from collected data
Either:
-Persevere (build iterations upon the idea), back to build
Or:
-Pivot (New ideas to change product for the market), back to ideas
What are Intellectual Property (IP) rights?
-Legal monopoly of IP owner to exploit invention/innovation
-Granted to owner for limited time
-Can be sold
What are the conditions of the ‘Patent’ form of intellectual property (IP) to be accepted?
-New and original
-Involve an inventive step
-Capable of industrial application
Cannot be:
-a discovery (gravity)
-A scientific theory
-Aesthetic creation (books or art)
-A scheme (business or game)
-Presentation of information
What are the 3 forms of Intellectual property (IP)?
-Patent
-Registered Designs
-Copyright
What are Registered Design Intellectual Properties (IPs)?
-Aesthetic design (shape, colour, appearance, ect.)
-Must be new
-Materially different and distinctive shape
-Registered product type (eg. kettle)
Cannot be:
-Sculptures
-Wall pictures
-Printed matter (book covers, dress patterns)
What is the Copyright form of Intellectual Properties (IPs)?
Rights for authors of outputs (automatically assigned):
-Literary works
-Musical, artistic works
-Published editions
-Sound recordings
-Films
-Broadcasts
-Computer games
