Chapter 2 Sources of Innovation

Question 1

What is the function of the creativity of an organization?

Answer 1

The creativity of the organization is a function of creativity of the individuals within the
organization and a variety of social processes and contextual factors that shape the
way those individuals interact and behave.

Question 2

How can employee creativity be employed?

Answer 2

Idea collection systems (such as suggestion boxes) are relatively easy and inexpensive to implement, but are only a first step in unleashing employee creativity.

investing in creativity training programs

Question 3

What does innovation require?

Answer 3

Innovation requires combining a creative
idea with resources and expertise that make it possible to embody the creative idea in a
useful form

Question 4

What are traits that the most successful inventors possess?

Answer 4

1. They have mastered the basic tools and operations of the field in which they invent,
   but they have not specialized solely in that field; instead they have pursued two or
   three fields simultaneously, permitting them to bring different perspectives to each.
2. They are curious and more interested in problems than solutions.
3. They question the assumptions made in previous work in the field.
4. They often have the sense that all knowledge is unified. They seek global ­solutions
   rather than local solutions, and are generalists by nature.

Question 5

How can innovation come from the users?

Answer 5

Innovation often originates with those who create solutions for their own needs.
Users often have both a deep understanding of their unmet needs and the incentive to
find ways to fulfill them

Question 6

What is basic research?

Answer 6

Research targeted
at increasing
scientific knowledge for its own
sake. It may or
may not have
any long-term
commercial
application.

Question 7

What is applied research

Answer 7

Research targeted
at increasing
knowledge for a
specific application or need.

Question 8

What is development?

Answer 8

Activities that
apply knowledge
to produce useful
devices, materials, or processes.

Question 9

What does the term R&D mean?

Answer 9

research and development refers to a range of activities that extend from early exploration of a domain to specific commercial implementations.

Question 10

What is the R&D intensity correlated with?

Answer 10

A firm’s R&D intensity
(its R&D expenditures as a percentage of its revenues) has a strong positive correlation
with its sales growth rate, sales from new products, and profitability.

Question 11

What are the spendages of countries for these 3 types of research

Answer 11

most countries spend proportionately
more on applied research and experimental development than basic research.

Question 12

What is the science-push approach?
Is it applicable for a great range?

Answer 12

This approach assumed that innovation
proceeded linearly from scientific discovery, to invention, to engineering, then manufacturing activities, and finally marketing. According to this approach, the primary
sources of innovation were discoveries in basic science that were translated into
commercial applications by the parent firm

This linear process was soon shown
to have little applicability to real-world products.

Question 13

What is the demand-pull model of R&D?

Answer 13

This approach argued that innovation was driven by the perceived demand of potential users. Research staff would develop new products in efforts to respond to
customer problems or suggestions.

Question 14

What are the different types of sources and information that firms use to innovate succesfully?

Answer 14

Most current research suggests that firms that are successful innovators utilize multiple sources of information and ideas, including:

• In-house research and development, including basic research.
• Linkages to customers or other potential users of innovations.
• Linkages to an external network of firms that may include competitors, complementors, and suppliers.
• Linkages to other external sources of scientific and technical information, such as
  universities and government laboratories

Question 15

With whom do firms often form alliances?

Answer 15

Firms often form alliances with customers, suppliers, complementors, and even competitors to jointly work on an innovation project or to exchange information and other
resources in pursuit of innovation

Question 16

In what form are the collaborations between firms and others?

Answer 16

Collaboration might occur in the form of alliances,
participation in research consortia, licensing arrangements, contract research and
development, joint ventures, government-sponsored joint research programs,
value-added networks for technical and scientific interchange, and informal networks.

Question 17

With whom are the most frequent collaborations?

Answer 17

The most frequent collaborations are between firms and their customers, suppliers,
and local universities

Question 18

What are the most valuable source that firms consider to be the most valuable source of new product ideas?

Answer 18

everal studies indicate that firms consider
users their most valuable source of new product ideas

Question 19

What are complementors?

Answer 19

s. Complementors
are organizations (or individuals) that produce complementary goods, such as lightbulbs for lamps, chargers for electric vehicles, or applications for smartphones

Question 20

How does the line between competitior and complementor blur?

Answer 20

In some
industries, firms produce a range of goods and the line between competitor and complementor can blur.

In some circumstances, firms might be bitter rivals in a particular product category
and yet engage in collaborative development in that product category or complementary product categories

Question 21

What does external sources of innovation do for R&D?

Answer 21

But empirical evidence suggests that
external sources of information are more likely to be complements to rather than substitutes for in-house research and developme

Question 22

What does in-house R&D help to build?

Answer 22

Presumably doing in-house R&D
helps to build the firm’s absorptive capacity, enabling it to better assimilate and
utilize information obtained externally.

Question 23

What is absorptive capacity?

Answer 23

Absorptive capacity refers to the firm’s ability to understand and use new information

Question 24

Who are the number one performer of basic research in the US?

Answer 24

universities the number one performer of basic
research in the United States

Question 25

What are technology transfer offices?

Answer 25

Offices designed
to facilitate the
transfer of technology developed
in a research
environment to
an environment
where it can be
commercially
applied.

Question 26

Why were technology transfer offices established?

Answer 26

To increase the degree to which
university research leads to commercial innovation

Question 27

How do universities contribute to innovation?

Answer 27

Universities also contribute significantly to innovation
through the publication of research results that are incorporated into the development efforts of other organizations and individuals.

Question 28

What are science parks?

Answer 28

Regional districts, typically
set up by government, to foster
R&D collaboration between
government,
universities, and
private firms.

Question 29

What are incubators?

Answer 29

Institutions
designed to nurture the development of new
businesses that
might otherwise
lack access to
adequate funding
or advice

Question 30

How do countries invest in research?

Answer 30

Governments of many countries actively invest in research through their own laboratories, the formation of science parks and incubators, and grants for other public or
private research entities

Question 31

What private nonprofit organizations contribute to innovation?

Answer 31

Private nonprofit organizations, such as private research institutes, nonprofit hospitals, private foundations, professional or technical societies, academic and industrial
consortia, and trade associations, also contribute to innovation activity in a variety of complex ways.

Question 32

Where is collaborative research especially important?

Answer 32

Collaborative research is especially important in high-technology sectors, where it is
unlikely that a single individual or organization will possess all of the resources and
capabilities necessary to develop and implement a significant innovation

Question 33

Why are interfirm networks a important engine of innovation?

Answer 33

By providing member firms access to a wider range of information (and other resources) than individual firms possess, interfirm networks can enable firms to achieve much more than
they could achieve individually.46 Thus, interfirm networks are an important engine of
innovation. Furthermore, the structure of the network is likely to influence the flow of
information and other resources through the network.

Question 34

What are technology clusters?

Answer 34

Regional clusters
of firms that have
a connection to
a common technology, and may
engage in buyer,
supplier, and
complementor
relationships, as
well as research
collaboration.

Technology clusters may span a region as narrow as a city or as wide as a group
of neighboring countrie

Question 35

What is one primary reason for the emergence of regional clusters?

Answer 35

One primary reason for the emergence of regional clusters is the benefit
of proximity in knowledge exchange. Though advances in information technology
have made it easier, faster, and cheaper to transmit information great distances,
several studies indicate that knowledge does not always transfer readily via such
mechanisms.

Question 36

How do proximity ans interaction directly influence the firms ability and willingness to exchange knowledge?

Answer 36

1. First, knowledge that is complex or tacit may require
   frequent and close interaction to be meaningfully exchanged.
2. Second, closeness and frequency of
   interaction can influence a firm’s willingness to exchange knowledge. When firms
   interact frequently, they can develop trust and reciprocity norms.

Question 37

What are agglomeration economies?

Answer 37

The benefits
firms reap by
locating in close
geographical
proximity to each
other.

Question 38

What are the downsides of geographical clustering?

Answer 38

1. First, the proximity
   of many competitors serving a local market can lead to competition that reduces
   their pricing power in their relationships with both buyers and suppliers.
2. Second, close proximity of firms may increase the likelihood of a firm’s competitors gaining
   access to the firm’s proprietary knowledge (this is one of the mechanisms of technology spillovers, discussed in the next section).
3. Third, clustering can potentially lead
   to traffic congestion, inordinately high housing costs, and higher concentrations of
   pollution.5

Question 39

What is a big part of the reason that technoologies are regionally localized>

Answer 39

A big part of the reason that technologies are often regionally localized is that
technological knowledge is, to a large extent, held by people, and people are often only
reluctantly mobile

Thus, if for some
reason an innovative activity commences in a geographic locale, the knowledge and
expertise that accumulates might not spread readily into other geographic locales, leading to a localized cluster of technological expertise.

Question 40

The degree to which innovative activities are geographically
clustered depends on things such a ….

Answer 40

• The nature of the technology, such as its underlying knowledge base or the degree to
  which it can be protected by patents or copyright, and the degree to which its communication requires close and frequent interaction.
• Industry characteristics, such as the degree of market concentration or stage of the
  industry life cycle, transportation costs, and the availability of supplier and distributor markets.
• The cultural context of the technology, such as the population density of labor or
  customers, infrastructure development, or national differences in the way technology development is funded or protected.

Question 41

What are technological spillovers?

Answer 41

A positive externality from R&D
resulting from
the spread of
knowledge across
organizational
or regional
boundaries

Question 42

Whether R&D benefits will spill over is partially a function of the strength of protection mechanisms such as ….?

Answer 42

copyrights, and trade secrets

The likelihood of spillovers is also a function of the
nature of the underlying knowledge base and the mobility of the
labor pool