INNOVATIONAnna Sabidussi
Some facts and figures…29%of new business founded in 1992were still alive in 2002.•   Source: Shane (2008)
Some facts and figures…1/3of companies listed in theFORTUNE 500 in 1970 haddisappeared by 1983.
Mapping the innovation space                ATTRIBUTE  DEGREE
Mapping the innovation space                      Product-      Process        Strategic                      Service     ...
Mapping the innovation space• Disruptive innovation (source: Clayton Christensen)
• Target overshot customers or non-customers;    • Prioritize good-enough;    • Do what established competitors don’t want...
Mapping the innovation space • Business Model Innovation canvas (Osterwalder and Pigneur)
• NYTD’s organizational evolution        Ability to borrow                            Integrated            Distinct but  ...
INNOVATION NETWORK  R&D partnerships in software 1970-1979,  MERIT-CATI                              R&D partnerships in s...
Relative importance of external sourcing drivers  Market entryTime-to -Market*           Cost                             ...
Cooperation …   70   60   50   40                                                                                         ...
… and beyond …HIGH                                          Acquisition                         Joint Ventures CONTROL    ...
Innovation strategy             Upsides                 Downsides                  Requirements                 Examples  ...
Non-Stars            Stars              R&D            Alliances   Acquisitions Non-stars   Stars   R&D AlliancesAcquisiti...
2                                                                                                                        P...
Innovation and entrepreneurship
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Innovation and entrepreneurship

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Lecture given by Anna Sabidussi on the 16th of June for MBA candidates

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Innovation and entrepreneurship

  1. 1. INNOVATIONAnna Sabidussi
  2. 2. Some facts and figures…29%of new business founded in 1992were still alive in 2002.• Source: Shane (2008)
  3. 3. Some facts and figures…1/3of companies listed in theFORTUNE 500 in 1970 haddisappeared by 1983.
  4. 4. Mapping the innovation space ATTRIBUTE DEGREE
  5. 5. Mapping the innovation space Product- Process Strategic Service ProductRadical Process Re- Revolution engineering Strategic TransformationCurrent Incremental Product Process Strategic Evolution Change Development Market Process Strategic Penetration Efficiency FocusSource: Ahmed and Shepherd, 2010
  6. 6. Mapping the innovation space• Disruptive innovation (source: Clayton Christensen)
  7. 7. • Target overshot customers or non-customers; • Prioritize good-enough; • Do what established competitors don’t want to do, can’t do or are uninterested in doing.Source: Anthony, Johnson, Sinfield and Altman, 2008
  8. 8. Mapping the innovation space • Business Model Innovation canvas (Osterwalder and Pigneur)
  9. 9. • NYTD’s organizational evolution Ability to borrow Integrated Distinct but (1995) linked (2004) High Unsopported Isolated (1999) Low Low High Ability to forgetSource: Govindarajan and Trimble, 2005
  10. 10. INNOVATION NETWORK R&D partnerships in software 1970-1979, MERIT-CATI R&D partnerships in software 1995-1999, MERIT-CATISource: Cloodt et al. 2010
  11. 11. Relative importance of external sourcing drivers Market entryTime-to -Market* Cost SMEs LARGE Uncertainty Knowledge Monitoring 0.0 1.0 2.0 3.0 4.0 5.0 Market entry Time-to -market Cost Large average Large best in class Uncertainty Knowledge Monitoring** 0.0 1.0 2.0 3.0 4.0 5.0Source: Sabidussi, 2009
  12. 12. Cooperation … 70 60 50 40 positive negative 30 neutral 20 10 0 Patents Sales/New Products Economic Indicators R&D inputs Process Innovation Performance implications of cooperationSource: Belderbos, Duysters and Sabidussi, 2012
  13. 13. … and beyond …HIGH Acquisition Joint Ventures CONTROL CVC Alliance LicensingLOW SHORT LONG TIME HORIZON
  14. 14. Innovation strategy Upsides Downsides Requirements Examples -Organic growth is -Better control of IP Slower Recruiting and -Long term growth -Astute strategic human -Google -Challenge of Retaining superior focus Resource management -Merk Identifying and Human capital -Difficult for competitors - Organizational flexibility -Goldman Sachs valuing superior to imitate human capital. -Apple -Internalization of skills -Full risk exposure -Culture of risk tolerance Internal R&D -Intel and capabilities -Long time horizon -Organizational flexibility Spending -BMW - Full capture of returns -Uncertain returns -Long term commitment -HP -Shared risk -Potential loss of Multiple, small-scale -IBM IP control Dedicated function Strategic investments provide -Eli Lilly -Challenge of for the management Alliances strategic options -Oracle alignment of goals of partnerships -Faster than internal -Procter & Gamble -Shared returns internal development -Faster than growing -Risk of overpaying organically -Cultural integration Capability to identify -Cisco Acquisitions -Acquire innovative -Involves relying and assimilate -GE technologies before startups on others for acquisition targets -Microsoft become competitors innovation Source: Frank Rothaermel and A. Hess. MITSLoan management review spring 2010
  15. 15. Non-Stars Stars R&D Alliances Acquisitions Non-stars Stars R&D AlliancesAcquisitionsSource: Frank Rothaermel and A. Hess. MITSLoan management review spring 2010
  16. 16. 2 Portfolio Balance Individual GC Assessment 1 (risk-return profile) Governance choice selection 3 no yes B2B ? OTHER Update total portfolio t= t0 + ∆t EXTERNAL 4 Internal INTERNAL sourcing no Technology Vs. change external sourcing ? Mayor Evolutions ? Market yes development Corporate Strategy shift Start t= t0Source: Sabidussi et al., 2011
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