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Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
Managing Innovation_innovation concepts
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Managing Innovation_innovation concepts

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Session 2 Innovation concepts

Session 2 Innovation concepts

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  • 1. Session 2: Basic Innovation Concepts Prof. Dr. Bernhard Katzy 2012www.CeTIM.orgProf. Dr. Bernhard R. Katzy
  • 2. Innovation Management Innovation System Organization of Innovation innovation Governance Innovation Transformation and entrepreneurship Basic innovation concepts Introduction to innovation Innovation Theory … Dominant theory, Main issues and developments of innovation researchwww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 1
  • 3. Session 2 – An Overview Agenda ● Mini-Test ● A brief history of thinking about innovation ● Summary and assignmentswww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 2
  • 4. Session 2 – Reading Engagement Mini-Testwww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 3
  • 5. A brief history of thinking about innovation 1930ies: Entrepreneurs innovate the economy CREATIVE DESTRUCTION OF SCHUMPETERS ENTREPRENEUR • Schumpeter‟s definition on innovation: A process of creative destruction Driven by: - New markets or products - New equipment - New methods of organization or management - New methods of communication • Schumpeter‟s business (technology) cycle A circular flow which, excluding any innovations and innovative activities, leads to a stationary state. The entrepreneur disturbs this equilibrium and this is the cause of economic development, which proceeds in cyclic fashions along several time scales.www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 4
  • 6. A brief history of thinking about innovation 1930ies: Entrepreneurs innovate the economy THE S MODEL OF TECHNOLOGY CYCLE Maturity of Technology T 2 Substitution T 1 Time Initiation Take-off Maturity [Source: Foster,1986]www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 5
  • 7. A brief history of thinking about innovation 1930ies: Entrepreneurs innovate the economy THE ABERNATHY MODEL OF DOMINANT DESIGN Rate of Innovation Dominant Design Process Innovation Product Innovation Fluid Transitional Specific Time Pattern Pattern Patternwww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 6
  • 8. A brief history of thinking about innovation 1930ies: Entrepreneurs innovate the economy CASE Telecommunication or Media?www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 7
  • 9. A brief history of thinking about innovation 1930ies: Entrepreneurs innovate the economy CASE OF DIGITAL TELEVISION Incremental innovation? Or radical?www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 8
  • 10. A brief history of thinking about innovation 1930ies: Entrepreneurs innovate the economy ARCHITECTURAL INNOVATION [Source: Henderson, Clark]www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 9
  • 11. A brief history of thinking about innovation 1930ies: Entrepreneurs innovate the economy CREATIVE DESTRUCTION OF SCHUMPETER ‘S ENTREPRENEUR Definition on entrepreneurs (innovators): Individuals whose function is to carry new combination out • The entrepreneur is the head of a firm and its employees • The entrepreneur is never the risk bearer. Risk taking is in no case an element of the entrepreneurial function, but may risk his reputation • First of all, there is the dream and the will to found a private kingdom, usually, though not necessarily, also a dynasty; • Then there is the will to conquer: the impulse to fight, to prove oneself superior to others, to succeed for the sake, not of the fruits of success, but of success itself; • Finally , there is the joy of creating, of getting things done, or simply of exercising one’s energy and ingenuity. Source :Schumpeter < the theory of economic development>www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 10
  • 12. A Brief history of thinking about innovation: 1950ies – Innovation through R&D Departments SCHUMPETER 2 • Why this called Schumpeter 2 ? • The traditional paradigm for managing R&D Bureaucracy in innovation departments dominant • Elements for innovation through R&D laboratories paradigm • Main actors of R&D department • R&D laboratories : Philips since about 1914, the Bell Labs in 1925… • Capital resources: funding from organization, or public subsidies • Human resources: scientist, researchers……www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 11
  • 13. A Brief history of thinking about innovation: 1950ies – Innovation through R&D Departments EARLY CASES OF R&D LABS Bell Labs has been at the forefront of technology since 1925. Here are ten Bell Labs innovations that changed the world : The Transistor Cellular Telephone Laser Technology Solar Cells, Communications Satellites, Touch-Tone Telephone, Data Networking, Digital Transmission and Switching, Unix Operating System and C Language, Digital Signal Processor (DSP)…… Source :http://www.alcatel-lucent.com/wps/portal/BellLabswww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 12
  • 14. A Brief history of thinking about innovation: 1960ies: Innovation adoption of new ideas by society INNOVATION AS DIFFUSION OVER TIME • Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system. • The decisions are not authoritative or collective, each member of the social member of the social system faces his/her own innovation-decision that follows a 5-step process: -Knowledge -Persuasion -Decision -Implementation -Confirmation For most members of a social system, the innovation- decision depends heavily on the innovation-decisions of the other members of the systemwww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 13
  • 15. A Brief history of thinking about innovation: 1960ies: Innovation adoption of new ideas by society INNOVATION AS DIFFUSION OVER TIME The Bell-shape Curve and S-shape Curve The scholars divide this bell-shape curve to characterize five categories of system member innovativeness. These groups are: Innovator, Early adopters, Early majority, Late majority, and Laggards. Source: Rogers <Diffusion of innovations>www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 14
  • 16. A Brief history of thinking about innovation: 1960ies: Innovation adoption of new ideas by society S – SHAPE CURVE AND BCG MATRIXwww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 15
  • 17. A Brief history of thinking about innovation: 1960ies: Innovation adoption of new ideas by society S – CURVE DOES NOT ALWAYS GO SMOOTH Moores CHASM H3 H2 H1www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 16
  • 18. A Brief history of thinking about innovation: 1970ies: Innovation as a business strategy INNOVATION AS A STRATEGIC MEANS TO DIFFERENTIATE IN MATURE MARKETS National strategy - The relation ship between innovation and economic growth - Mainly concerns supporting small and medium sized enterprises in how to adopt innovations. - Policies and institutes such as TNO institute in Holland channelling more inventions through the process from basic to applied research and into production in firms. Innovation and organizational strategy - Viewing technology as a functional capability implies the need to develop a technology strategy, analogous to financial and human resource strategies - A set of interrelated decisions encompassing, among others, technology choice, level of technology competence, level of funding for technology development, timing of technology introduction in new products/ services, and organization for technology application and development (e.g., Maidique and Patch, 1978)www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 17
  • 19. A Brief history of thinking about innovation: 1980ies: Innovation as a profession and competence INNOVATION AS A DISCIPLINE - DRUCKER Innovation is an effect in economy Innovation and society Innovators is work Principles must build on their strength The practice (discipline) of innovation: „90% of Innovation is Transpiration‟1 Analysis for 5opportunities 2 Do‟s Gain Go out, 4 leadership 3 look and listen Start small conception & perception Be effective, simple and focused [Drucker, 1996]www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 18
  • 20. A Brief history of thinking about innovation 1990ies: Innovation through collaboration in networks INNOVATION THROUGH STRATEGIC COOPERATION IN INNOVATION SYSTEMS - Stresses that the flow of technology and information among people, enterprises and institutions is key to an innovative process. It contains the interaction between the actors who are needed in order to turn an idea into a process, product or service on the market. - Innovation systems have been categorized into national innovation system, local innovation system, regional innovation systems and sectoral innovation systemswww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 19
  • 21. A Brief history of thinking about innovation 1990ies: Innovation through collaboration in network INNOVATION SYSTEM Sectoral Innovation Regional System Cluster Industry and Company Research Research Centre Entities Publi c VPC VPC Instit ution University National Innovation System Living Lab LL client community Social New Comm product/ Territory unity service Social Co- Settings LL Collaborative creation Infrastructure Innovation system [Katzy and Crownston 2008; Schuh, Katzy, Eisen 1997]www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 20
  • 22. A Brief history of thinking about innovation: 2000: “open” Innovation in cooperation with the user INNOVATION THROUGH OPEN INNOVATION Research licensing Development Other firms’ Market New Market Spin-off Internal Technology Base Current Market External Technology Base Technology insourcing Labor mobility/ Venture Capital/ Numerous Start-ups/ research conducted at Universities/…… [Source: Henry Chesbrough 2003]www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 21
  • 23. A Brief history of thinking about innovation: 2000: “open” Innovation in cooperation with the user COMPARISON BETWEEN OPEN INNOVATION AND CLOSED INNOVATION Closed innovation Principles Open innovation Principles The smart people in our field work for us Not all the smart people work for us We need to work with smart people inside To profit from R&D and outside our company we must discover it, develop it and ship it External R&D can create significant value, ourselves internal R&D is needed to claim some portion of that value If we discover it ourselves, we will get it to We dont have to originate the research to market first profit from it The company that gets an innovation to Building a better business model is better market first will win than getting to market first If we create the most and the best ideas in If we make the best use of internal and the industry, we will win external ideas, we will win We should control our innovation process, We should profit from others use of our so that our competitors dont profit from our innovation project, and we should buy ideas others IP whenever it advances our own business model Henry Chesbrough <Open Innovation>www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 22
  • 24. A Brief history of thinking about innovation: 2000: Innovation through Organization routines INNOVATION THROUGH ORGANIZATION ROUTINES A congruence model of diagnosing organizational behaviour Transformation Process Informal Organization Context Output Formal Organization Environment Task Group Strategy Organization Resources History Arrangements Individual Individual Feedback Tushman and Nadler < a congruence model for organization problem solving>www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 23
  • 25. Summary and assignments Summary - Perspectives from the different sides to study innovation phenomenon - Different perspectives are complementary to each other - No clear boundary between different research orientationwww.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 24
  • 26. Readings for next sessions 3: Transformation and Entrepreneurship and session 4:Organization of Innovation S4: S3: Transformation and Entrepreneurship Organization of Innovation •Article 22: Dynamic capabilities and strategic management •Article 18: Understanding power in •Article 36: Creating new ventures from organizations Bell labs Technologies •Article 20: The ambidextrous organization: managing Selective reading (available on the evolutionary and revolutionary blackboard) change <Capturing value from technological innovation: integration, strategic partnering, and licensing decisions> by David Teece 1988www.CeTIM.org Prof. Dr. Bernhard Katzy 14/02/12 25

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