Lecture Two Flashcards
(30 cards)
How does Feldmam (2000) define innovation
“the novel application of economically valuable knowledge”
How does Joseph Smumpeter define innovation
“Innovation is the market introduction of a technical or organisationak novelty, not just its invention”
What is creative destruction?
Creative Destruction is a key part of capitalism. It refers to how the opening up of new markets, foreign or domestic, replace old ones, constantly reshaping the economy. This ongoing cycle of innovation destroys outdated industries while creating new opportunities.
What is creative accumulation?
Creative accumulation is the process of building upon existing knowledge, ideas, or innovations over time to generate new and improved concepts, products, or solutions. It contrasts with radical innovation, which involves entirely new breakthroughs, by emphasizing incremental improvements and the combination of existing elements in novel ways. When we look closely at where progress happens, it often comes from large businesses rather than small competitors. This suggests that big businesses may have played a bigger role in improving living standards rather than suppressing them.
What are economic cycles
Economic cycles are the consequence of innovation.
Economic turbulence makes it possible for new and small firms to emerge in a competitive market through innovation
What are up swings in economic cycles?
Innovation along established technological trajectories (incremental)
Firms develop into incumbents that accomplish innovation as a routine
Incumbents prevent the entrance of new firms
What are downswings in economic cycles?
Shakeout of established industries & technology fields
New firms in new sectors play a bigger role than incumbents in generating innovations
New and small firms exploit new technological opportunities as a way to challenge incumbents
What is the linear model of innovation?
Basic research > Applied research > Development > Commercialisation
Science as a source of innovation
The Linear Model of Innovation is a traditional framework that describes innovation as a straightforward, step-by-step process that moves in a single direction. It assumes that scientific research leads to technological development, which then results in commercial applications and economic growth.
what are the negatives of the linear model of innovation
Exogenous View of Science – The model assumes that scientific research operates independently and drives innovation in isolation, rather than being influenced by societal, economic, and industry needs.
Neglect of Other Innovation Sources – It downplays the role of alternative drivers of innovation, such as user feedback, incremental improvements, collaboration between industries, and organisational learning.
Overly Simplistic and Rigid – Innovation is rarely a linear, one-way process; instead, it involves feedback loops, trial-and-error, and dynamic interactions between research, development, and market demand.
what is the chain link model of innovation?
The Chain-Link Model of Innovation (developed by Kline & Rosenberg in 1986) is a more realistic and dynamic alternative to the Linear Model of Innovation. It recognises that innovation is an interactive and iterative process involving multiple feedback loops between different stages.
What are the feautres of the chain link model of innovation?
Non-Linear Process – Unlike the linear model, innovation does not follow a strict step-by-step path. Instead, various stages interact with and influence each other.
Feedback Loops – Innovation involves constant back-and-forth adjustments, where insights from development, production, or the market can lead to revisions in research or design.
Problem-Solving Approach – Innovation often starts with recognising a need or problem rather than purely scientific discovery. This makes it more demand-driven than the traditional technology-push model.
Multiple Sources of Knowledge – The model acknowledges that innovation is influenced by various factors, including market demands, user input, supplier collaboration, and organisational learning.
What is firm level innovation?
the firm is central to the idea of innovation. The Innovation Value Chain (Roper, et al (2008)) provides a structured way to understand how firms transform knowledge into business value. Unlike traditional linear models, this framework recognises that innovation is both an outcome and a starting point for future innovation.
what are the features of firm level innovation?
Knowledge Sourcing (Interacting with Other Actors)
- Firms acquire knowledge from internal R&D, external partnerships, market research, universities, and customers.
- Collaboration with suppliers, competitors, and industry networks plays a critical role.
Knowledge Transformation (Innovation Production Function)
- Internal processes combine, modify, and refine knowledge into new ideas, products, or services.
- Effective knowledge transformation depends on a firm’s capabilities, resources, and organisational culture.
Knowledge Exploitation (Commercialisation and Value Creation)
- Innovations are brought to market through new product launches, process improvements, and business model innovations.
- Sales from new products, increased market share, and operational efficiencies generate business value.
what are the dimensions of innovation? Tidd and Bessant (2020)
product – changes in the things (products/services) which an organization
offers
process – changes in the ways in which they are created and delivered
position – changes in the context in which the products/services are
introduced
paradigm – changes in the underlying mental & business models which
frame what the organization does
What are the types of innovation?
- product
- service
- process
- business model
- delivery
- marketing
what is the balancing act
the effieicnt day to day operations within an organisation require stable routines. this is usually acheived in stable and controlled environments. however, the development of new products and services requires creativity and room to try out new ideas, which is achieved in a loose and flexible enviornment ( Trott, 1998). need to create an enviornment that can balance stability and uncertainity/creativity.
what are the benefits and features of stability and static routines (present)
- drive down costs
- improve efficiency
- tasks done quickly
- stable and controlled enviornment
- doing things right
what are the benefits and features of creativty (future)
- encourage
- develop new ideas and new products
- loose and felxible environment
- doing right things
how do we manage innovation? what are key points to bare in mind?
Innovation is risky but it is not simply a matter of luck or gambling.
Key points to bear in mind:
1. Innovation is a process, not a single event, and it needs to be managed as such
(remember the innovation value chain);
2. Inputs into process can be manipulated to affect its outcomes;
3. The process needs to be managed in an integrated way – each step is critical!
4. Ultimate aim should be to develop innovation management capability –
learning over time is critical.
5. Learn from mistakes by looking back on past experience!
= Create conditions where the successful resolution of multiple innovative challenges under high levels of uncertainty is made more likely.
what are generic phases of the innovation process?
How each step of the process is managed varies substantially from firm to firm;
Through experience, firms will develop their own, unique routines that will help them manage the innovation process and will make them distinctive.
- Searching - scanning the internal & external environments - how can we find opportunities for innovation?
- Select - Filtering & selecting potential opportunities, acquiring the technical, financial & market resources - what are we going to do and why? can we build on our knowledge base, do we want to do it?
- Implement - development & commercialisation - aquire the knowledge, execute the project, launch and sustain the innovation.
- Capture - Reviewing & learning from experience - how are we going to get the benefits from it?
success in innovation tends to depend on what?
- technical resources
- organisational capabailities to manage them
how do firms manage uncertainity?
managing uncertainty is a central feature of managing the innovation process.
Pearsons uncertainty map is a good framework for analysing and understanding uncertainty and the innovation process.
describe the pearsons uncertainty map (quadrant 1)
quadrant 1:
High uncertainty about goals and methods.
Targets and how to achieve them are not clearly defined.
Often involves unfamiliar technology and undefined products/markets.
Common in university research labs and large science-based organisations.
Example: The t-test by William Sealy Gosset and Guinness.
describe the pearsons uncertainty map (quadrant 2)
Quadrant 2 – Development Engineering
Target is clear, but uncertainty about the process.
Commercial opportunity identified, but the method to achieve it is unclear.
Companies work on multiple projects with different technologies or approaches.
Example: Manufacturing companies improving production processes for efficiency and cost reduction.
Example: Guinness in-can system, aiming to replicate draught taste but uncertain how.
Complex, time-consuming, and requires extensive problem-solving.
