Introduction

Question 1

Why does innovation matter?

Answer 1

• innovation and capitalism linked -> competition makes innovation mandatory
• economic growth since 18th century is attributable to innovation

Question 2

Why are innovation and capitalism linked so tighly?

Answer 2

• innovation can be hugely profitable
• good inventions might be low-tech
• good invention takes time

Question 3

Definition of innovation

Answer 3

-“Innovations are qualitatively new products/processes that differ significantly from what existed before” Hauschildt
- Innovation management is the creation of processes that aim at creating and exploiting new things

Question 4

Innovation is also a process, not only the output (Hauschildt)

Answer 4

Question 5

Combination of solutions and needs

Answer 5

Question 6

Different types of innovation

Answer 6

• product or service innovation
• process innovation
  (product and process innovation often go hand in hand)
• business model innovation

Question 7

R&D as source of innovation

Answer 7

Huge economic and societal importance (10-20% of business R&D funded with public money)
Basic research (5-20%) usually funded by government
- applied research (15-25%)
- experimental development (65%-85%)

R&D intensity = R&D expenditures / revenues

Question 8

Principal agent problem

Answer 8

The principal agent problem infers the situation where the principal and agent are in a conflict emanating from differences in interests. It is solved by putting in place the right incentives that ensure agents do not act in their own interests.

Question 9

The Vasa problem

Answer 9

The Vasa example is prototypical for innovation projects with “bad”
endings:
– When the problems start … nobody dares to voice concerns,
or those that do are not listened to or even punished
▪ Why is it that nobody is held accountable (in the Vasa case, but also
in general in innovation projects)?
➔ As in the 17th century, also today a lack of open communication
spells disaster for uncounted innovation projects.