Organisational innovation in the digital era

Question 1

What is innovation?

Answer 1

• Hundreds of diff definitions
• Intro of new ideas that add value to a firms activities – UK Department of Trade and Industry 2004 – very broad definition
• Companies achieve competitive adv through acts of innovation. They approach innovation in its broadest sense inc both new tech and ways of doing things – Porter 1990

Question 2

Waves of innovation?

Answer 2

• Schumpeter identified innovative tech as being at the heart of successive periods of econ growth
• Upwards tech as people start using tech, peak, decline as new tech emerges – destructive aspect

Question 3

Models of innovation?

Answer 3

• Intro of new products
• Intro of new methods of production
• Opening of new markets
• Development of new sources of supply for inputs
• Creation of new market structures in an industry

Question 4

New approaches to innovation?

Answer 4

Open innovation
* Firms need to think ab innovation in diff terms – possibilities to commercialise/license out/take other firms ideas
* (video on slide 7)

Question 5

Definitions of digital innovation?

Answer 5

• The creation of and change in market offerings, business processes or models resulting from use of digital tech – Nambisan et al 2017
• Novel actors, structures, practices, values and beliefs that change, threaten, replace or complement existing rules of the game within organisations, ecosystems, industries or fields – Hinnings et al 2019 – (also has negative elements)

Becoming more intangible e.g., Cloud, Deep learning (AI)

Question 6

Forms of digital innovation?

Answer 6

• New digital products and services – smart farming services, peer to peer accommodation (e.g., Airbnb), on demand mobility (e.g., Uber) and platforms to search, compare and book (e.g., Booking.com) – transformed previous analog products e.g., travel agents
• Servitisation – describes addition of services to manufacturers core products offerings to create additional customer value - Adopting digital tech and data to provide new services – reflects transformation of a firm from taking a product to taking a service-centric approach – e.g., hiring bike – selling you the service – full of digital sensors
• Business processes – automation processes w robots, trace products along value chains, better manage stocks w use of sensors and the Internet of Things - Predict maintenance needs of equipment w big data analytics

Question 7

Industry 4.0?

Answer 7

• A new phase of industry where digital tech is being used to automate to a much greater degree than previously

Question 8

New organisational forms?

Answer 8

• ecommerce/marketplace, ad supported, on demand, free – freemium model, peer to peer marketplace

Question 9

Digital platforms?

Answer 9

• online structures that enable wide range of human activities
• shape the terms on which participants interact w one another
• aided by emergence of algorithms and tech such as the cloud
• can reduce transaction costs
• firm profits by charging a fee to match customers w providers on these complementary platforms
• one of the main disruptors at the moment
• e.g., Uber, Netflix, Deliveroo
• harnessing digital tech scale up rapidly and dominate markets

Question 10

Digital innovation processes?

Answer 10

• the power of the crowd – McAfee and Brynjolfsson 2017 – firms in the digital era can use the power of the crow
• e.g., Wikipedia
• crowdsourcing – enables sourcing of innovative ideas from many skilled individuals
• crowdfunding – represents an alternate source of venture financing for innovation

Question 11

Digital innovation processes - P&G case study?

Answer 11

• networks for open innovation
• personal health/consumer health, personal care and hygiene products
• long history of innovating its products
• management of innovation traditionally an invention model focused internally
• invent it ourselves model perceived unable to sustain high levels of top growth
• growth of tech putting pressure on budgets and success rate declining
• created connect and develop innovation model – focus innovation in broader environ
• invites innovative firms to partner in development of new products
• now based on harnessing power of ext partners – the crowd
• est that 35% of its new products have element originated outside P&G, up from 15 in 2000
• why would people go to help? – P&G have the scale so willing to give away some of your equity
• may raise danger that comp steals ideas? – prob not as will keep best ideas secret

Question 12

Darker side of digital innovation?

Answer 12

• disruptive tendencies – business, jobs and places
• can prod pos undesirable outcomes
• exploitative power of big tech – exploiting extant regulatory loopholes and workforce precarity – digital surveillance
• implications for jobs – AI tech effects diff to predict, estimates suggest 20-50% of jobs are automatable as a result of digital tech – largest impacts on lower qualified service workers – new business creation is exp to replace existing jobs, supervising digital tech
• digital tech and net zero – carbon footprint of gadgets , internet and systems about 3.7% of global greenhouse emissions – similar to airline industry, predicted to double by 2025