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Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
Innovation as creative destruction pdf
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Innovation as creative destruction pdf

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Innovation in Practice

Innovation in Practice

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  • 1. Innovation in Practice Pilot 2010 Innovation in Practice
  • 2. in novation
  • 3. in novation ―Innovation‖ exists in our skillful adaptive relationships to those environments in which we exist….
  • 4. in novation … our relationships to each other in those environments….
  • 5. in novation … the materials that constitute those environments….
  • 6. … the objects or tools that we make with those materials that then further facilitate or ―afford‖ our relationship to those environments
  • 7. in novation … and even more specifically in those ―communities of practice‖ that provide us with the necessary knowledge and requisite skills to do all of these things!
  • 8. Innovation in Practice Pilot 2010 DISCOURSES IN INNOVATION 1: DISCLOSING THE (K)NEW: LEARNING, SKILL ACQUISITION AND THE PRODUCTIVIST LIMITS OF INNOVATION THEORY
  • 9. DISCOURSES IN INNOVATION 1: DISCLOSING THE (K)NEW: LEARNING, SKILL ACQUISITION AND THE PRODUCTIVIST LIMITS OF INNOVATION THEORY • General Introduction and course overview. • Innovation as Creative Destruction – Schumpeter and Beyond. • Innovation as ‗History Making‘ - Ontological Design and the disclosure of the (k)new. • Innovation and ‗Expertise‘‖ - Hubert Dreyfus and the ‗tacit‘ nature of ‗skillful‘ innovation. • Innovation in ‗Practice‘ – The ‗tacit‘ knowledge of innovatory practice. Flores, Schon, and Nonaka. • Innovative Change – Stephen Turner and the ―object‖ of transformative ‗practice. • Innovation and Systemic Change – Open Source Innovation, Distributed Mind, and the Economy of Contribution. • Summation, Critical Review and Essay Planning
  • 10. Haridimos Tsoukas Complex Knowledge. Studies in Organizational Epistemology
  • 11. Open Ontology/Enactivist Epistemology/Poetic Praxeology The world in which we exist – and thus ―innovate‖ within – can only be truly understood according to the ―complex‖ logic of an: “Open Ontology” as opposed to a ―Closed Ontology‖ – that is a perception of the world or the nature of our existence that sees it as being in a constant state of flux or change, and the future as ―open, unknowable in principle‖ and always holding, ―the possibility of surprise.‖ An “Enactivist Epistemology” as opposed to a ―Representationalist‖ one – that is a perception of the world, or a theory of how we understand it, that recognizes the central role of our own ―enactive‖ participation in its construction, rather than in its ability to transparently ―re-present‖ some absolutely determinable truth or reality. A “Poetic Praxeology” as opposed to an ―Instrumentalist‖ one – that is, similarly to the ―enactivist‖ position, an understanding of how our own individual creative development, utilization of, or taking up of those ―practices‖ that inform those contexts in which we exist, also contribute to the transformation of that background of historically available ―practices‖ that condition those contexts – much in the same way that a poet transforms the language which they use through their utilization of it.
  • 12. Pheonomenology/Pragmatism/Cybernetics/Systems Theory William James - January 11, 1842 – August 26, Heinz Von Foerster born November 13, 1911 – 1910 October 2, 2002 Henri Bergson born, 8 October 1859 – 4 January Stephen Toulmin - 25 March 1922 - 4 December 1941 2009 John Dewey – born October 20, 1859 – June 1, Stafford Beer – born September 25, 1926 - August 1952 23, 2002 Alfred North Whitehead born 15 February 1861 – Humberto Maturana September 14, 1928 – 30 December 1947 Alasdair Macintyre - 12 January 1929 Ludwig Wittgenstein - born 26 April 1889 – 29 April 1951 Richard Rorty – born October 4, 1931 – June 8, 2007 Michael Polanyi - March 11, 1891 – February 22, 1976 George Lakoff - May 24, 1941 Martin Heidegger - born September 26, 1889 – Francisco Varela - September 7, 1946 – May 28, May 26, 1976 2001 Hans-Georg Gadamer - born February 11, 1900 – Charles Taylor - born 28 January 1948 March 13, 2002 Gregory Bateson – born 9 May 1904 – 4 July 1980
  • 13. Process Philosophy, Phenomenology, Hermeneutics, Pragmatism, Cybernetics, Systems Theory, Cognitive Science, Enactive Mind
  • 14. Complex/Emergent/Enactive/Collaborative Clay Shirky - Charles Leadbeater - Chris Anderson - Nassim Nicholas Taleb - Don Tapscott and Anthony Williams
  • 15. Luc Boltanski and Eva Chiapello The New Spirit of Capitalism
  • 16. ―The Network‖ ―As an existing concept, constructed around contemporary ideas, technologies and research, associated with a specific vocabulary, models of causality and mathematical models, and formed to offer an alternative to hierarchical algorithms, ‗network' naturally enough finds itself mobilized by capitalism. Employed in academic works in economics and the sociology of work - disciplines that helped to provide management with its theoretical foundations - it was almost bound to invade the literature addressed to cadres that we have studied. This is how the forms of capitalist production accede to representation in each epoch, by mobilizing concepts and tools that were initially developed largely autonomously in the theoretical sphere or the domain of basic scientific research. This is the case with neurology and computer science today. In the past, it was true of such notions as system, structures technostructure, energy, entropy, evolution, dynamics and exponential growth.‖ Boltanski, L and Chiapello, E. (2005) Trans. Ellliott, G. The New Spirit of Capitalism. Verso. London. p. 104
  • 17. Manuel Castells The Network Society
  • 18. Michel Foucault The Archaeology of Knowledge
  • 19. ―Episteme‖ By episteme, we mean. . . the total set of relations that unite, at a given period, the discursive practices that give rise to epistemological figures, sciences, and possibly formalized systems. . . . The episteme is not a form of knowledge (connaissance) or type of rationality which, crossing the boundaries of the most varied sciences, manifests the sovereign unity of a subject, a spirit, or a period; it is the sovereign unity of a subject, a spirit, or a period: it is the totality of relations that can be discovered, for a given period, between the sciences when one analyses them at the level of discursive regularities Foucault, M. (1972) The Archaeology of Knowledge. Trans.Sheridan, A. M. Harper Collins. New York.
  • 20. Michel Foucault The Order of Things. An Archaeology of the Human Sciences The fundamental codes of a culture - those governing its language, its schemas of perception, its exchanges, its techniques, its values, the hierarchy of its practices - establish for every man, from the very first, the empirical orders with which he will be dealing and within which he will be at home. At the other extremity of thought, there are the scientific theories or the philosophical interpretations which explain why order exists in general, what universal law it obeys, what principle can account for it, and why this particular order has been established and not some other. But between these two regions, so distant from one another, lies a domain which, even though its role is mainly an intermediary one, is nonetheless fundamental: it is more confused, more obscure, and probably less easy to analyse. It is here that a culture, imperceptibly deviating from the empirical orders prescribed for it by its primary codes, instituting an initial separation from them, causes them to lose their original transparency, relinquishes its immediate and invisible powers, frees itself sufficiently to discover that these orders are perhaps not the only possible ones or the best ones; this culture then finds itself faced with the stark fact that there exists, below the level of its spontaneous orders, things that are in themselves capable of being ordered, that belong to a certain unspoken order; the fact, in short, that order exists. As though emancipating itself to some extent from its linguistic, perceptual, and practical grids, the culture superimposed on them another kind of grid which neutralized them, which by this superimposition both revealed and excluded them at the same time, so that the culture, by this very process, came face to face with order in its primary state. It is on the basis of this newly perceived order that the codes of language, perception, and practice are criticized and rendered partially invalid. Foucault, M. (1970) The Order of Things. An Archaeology of the Human Sciences. Vintage. New York. p xx- xxi
  • 21. Benoît Godin Innovation: The History or ―Genealogy‖ of a Category
  • 22. Joseph Schumpeter Innovation as Creative Destruction
  • 23. Henry Chesbrough Open Innovation
  • 24. ―The Social Construction of Reality‖ Peter L. Berger and Thomas Luckmann
  • 25. Personal thoughts, feelings, ideas, the personal ego (I) Externalisation Objectification Language is institutionalized Experiences are Reified Social Values are Legitimized Consciousness is intersubjective Internalisation Social thoughts, feelings, ideas, the social ego (me)
  • 26. Bruno Latour – Actor Network Theory The Social Construction of Scientific Facts
  • 27. ―Truth‖ is produced in Practice
  • 28. Francisco Varela and Humberto Maturana Autopoiesis and Cognition. The Realization of the Living.
  • 29. Purpose or aims… are not features of the organization of any machine (allo or autopoietic); these notions belong to the domain of our discourse about our actions, that is, they belong to the domain of descriptions, and when applied to a machine, or any system independent from us, they reflect our considering the machine or system in some encompassing context. Maturana, Humberto and Varela, Francisco. 1980. Autopoiesis and Cognition: The Realization of the Living, Dordrecht: D. Reidel
  • 30. Hannah Arendt The Human Condition
  • 31. ―The use of the experiment for the purpose of knowledge was already the consequence of the conviction that one can only know what he has made himself, for this conviction meant that one might learn about those things man did not make by figuring out and imitating the process through which they had come into being.‖ Arendt, Hannah. 1958. The Human Condition, University of Chicago Press, Chicago. p295
  • 32. Gareth Morgan Images of Organization
  • 33. ―The Social Construction of Management‖
  • 34. Personal thoughts, feelings, ideas, the personal ego (I) Externalisation Objectification Language is institutionalized Experiences are Reified Social Values are Legitimized Consciousness is intersubjective Internalisation Social thoughts, feelings, ideas, the social ego (me)
  • 35. As much as we might have intellectually realized the enormous ontological and epistemological significance of mans of these insights – insights that, whether in the physical sciences or philosophy we have, in many instances, been aware of for over a hundred years! – we have as yet to recognize the full implications of their significance within the machinations of our everyday lives. That is in the ways in which we actually come to know, learn, teach, and act within - or more importantly for our current purposes, design or ―innovate‖ within - this world of which we are all a part, and actively, or even more appropriately, ―enactively,‖ contribute to the construction of. There is an absolutely massive disconnect between what in a few weeks time we will see Donald Schön and Chris Argyris call our ―espoused theories‖ and our ―theories-in-use.‖ Or what we can even more simply describe as those fundamental beliefs and practices that actually inform what we do and those that we claim to inform what we do.
  • 36. Donald Schon and Chris Argyris Single and Double Loop Learning
  • 37. Single-loop Learning Single-loop learning is an active process of organisational enquiry that results in the modification of the theory-in-use to keep organisational performance within acceptable parameters based on values and accepted norms. The values and norms themselves – the governing variables – are not changed (Argyris and Schön, 1996, p.20). Double-loop Learning Double-loop learning (Figure 1) involves the exploring and sometimes painful reconsideration of values and strategies. This can be done individually or on behalf of an organisation when agents reassess the effectiveness of the organisational values. Double loop learning is a critical part of an organisations culture of it is to maintain unity of vision and purpose during times of conflicting requirements or environmental change.
  • 38. Ikujiro Nonaka SECI Model of Innovation Socialisation, Externalisation, Combination, Internalisation
  • 39. Socialisation: This is where ―tacit‖ knowledge is shared through face to face communication or shared experience . Externalisation: This is the process through which ―tacit‖ knowledge is embedded or externalised in language and made communicable. Combination: This is where various elements of these externally communicable insights are combined together to form systematic theories or models etc. Internalisation: This is where these models are then re- internalised and form part of our background ―tacit‖ knowledge.
  • 40. Catherine Malabou What Sould We Do with Our Brain?
  • 41. ―How could we not note a similarity of functioning between this economic organization and neuronal organization? How could we not interrogate the parallelism between the transformation of the spirit of capitalism (between the sixties and the nineties) and the modification, brought about in approximately the same period, of our view of cerebral structures...Revealing that the brain is neither a rigid structure nor a centralized machine is not enough to stave off the threat of alienation. In fact, neo-liberal ideology today itself rests on a redistribution of centers and a major relaxation of hierarchies. Domination and the crisis of centrality, in a merely seeming paradox, are perfectly matched with each other. The restructuring of capitalism (post-Fordist capitalism of the second industrial revolution) was accomplished at the price of substituting control by self-organization for planning decided and overseen by a formal centralized authority within the company.” Malabou, C. (2008) What Should We Do with Our Brain? Trans. Rand, S. Fordham University Press. New York.
  • 42. Slavoj Žižek First as Tragedy, Then as Farce – The “Logic” of “Fetishistic Disavowal”
  • 43. ―Not to replicate the caricature of the world: this is what we should do with our brain. To refuse to be flexible individuals who combine a permanent control of the self with a capacity to self modify at the whim of fluxes, transfers, and exchanges, for fear of explosion. ― ―To ask 'What should we do with our brain?" is above all to visualize the possibility of saying no to an afflicting economic, political, and mediatic culture that celebrates only the triumph of flexibility, blessing obedient individuals who have no greater merit than that of knowing how to bow their heads with a smile.‖ Malabou, C. (2008) What Should We Do with Our Brain? Trans. Rand, S. Fordham University Press. New York.
  • 44. Gert Biesta Critique of the ―representationalist‖ epistemology of modern education
  • 45. Etienne Wenger and Jean Lave Communities of Practice/Situated Learning/Legitimate Peripheral Participation
  • 46. Lave and Wenger reject the view of understanding as arising ―out of the mental operations of a subject on objective structures‖ and locate learning not in acquisition of structure, but in the increased access of learners to participating roles in expert performances. William F. Hanks,
  • 47. Learning as “Situated Activity” Learning viewed as situated activity has as its central defining characteristic a process we call legitimate peripheral participation. By this we mean to draw attention to the point that learners inevitably participate in communities of practitioners and that the mastery of knowledge and skill requires newcomers to move toward full participation in the sociocultural practices of a community. ―Legitimate Peripheral participation‖ provides a way to speak about the relations between newcomers and old-timers, and about activities, identities, artifacts, and communities of knowledge and practice. It concerns the process by which newcomers become part of a community of practice. A person’s intentions to learn are engaged and the meaning of learning is configured through the process of becoming a full participant in a sociocultural practice. This social process includes, indeed it subsumes, the learning of knowledgeable skills.
  • 48. According to Wenger there are three elements that are crucial in distinguishing a community of practice from other groups and communities: The domain. A community of practice is something more than a club of friends or a network of connections between people. 'It has an identity defined by a shared domain of interest. Membership therefore implies a commitment to the domain, and therefore a shared competence that distinguishes members from other people.‘ The community. 'In pursuing their interest in their domain, members engage in joint activities and discussions, help each other, and share information. They build relationships that enable them to learn from each other.' The practice. 'Members of a community of practice are practitioners. They develop a shared repertoire of resources: experiences, stories, tools, ways of addressing recurring problems—in short a shared practice. This takes time and sustained interaction. '
  • 49. Paul Hildreth and Chris Kimble Innovation through Communities of Practice
  • 50. Innovation in Practice Pilot 2010 DISCOURSES IN INNOVATION 1: DISCLOSING THE (K)NEW: LEARNING, SKILL ACQUISITION AND THE PRODUCTIVIST LIMITS OF INNOVATION THEORY
  • 51. DISCOURSES IN INNOVATION 1: DISCLOSING THE (K)NEW: LEARNING, SKILL ACQUISITION AND THE PRODUCTIVIST LIMITS OF INNOVATION THEORY • General Introduction and course overview. • Innovation as Creative Destruction – Schumpeter and Beyond. • Innovation as ‗History Making‘ - Ontological Design and the disclosure of the (k)new. • Innovation and ‗Expertise‘‖ - Hubert Dreyfus and the ‗tacit‘ nature of ‗skillful‘ innovation. • Innovation in ‗Practice‘ – The ‗tacit‘ knowledge of innovatory practice. Flores, Schon, and Nonaka. • Innovative Change – Stephen Turner and the ―object‖ of transformative ‗practice. • Innovation and Systemic Change – Open Source Innovation, Distributed Mind, and the Economy of Contribution. • Summation, Critical Review and Essay Planning
  • 52. ―Innovation as Creative Destruction – Schumpeter and Beyond‖. In this first lecture we will consider of some of the key ways in which innovation has come to be understood, both practically and conceptually since its inception. We will place particular emphasis on the ways in which it has been articulated within the discourses of economics, business, organisation, and management theory in particular, from Joseph Schumpeter‘s original analysis of it as ―creative destruction‖ through to Henry Chesbrough‘s most recent ideas on ―open innovation‖.
  • 53. Benoît Godin Innovation: The History or ―Genealogy‖ of a Category
  • 54. ―This paper advances three hypotheses in order to guide a genealogical history of innovation as category. The first hypothesis starts with the idea that innovation is about novelty (arising from human creativity), as etymology, dictionaries and history suggest. As such, innovation is of any kind, not only material or technological. In this sense, innovation as category has a very long history. However, over time the conjunction of two factors gave preeminence to technological and commercialized innovation in representations: 1) the culture of things and its capitalistic corollary: industrial development through technology, 2) academics, the study of technology, and the conceptual frameworks that followed for policies in science and economic growth. In fact, there is a dialectics here between reality and language. Events and changes in the world gave rise to new categories; the latter in turn brought to light changes in the world and, in doing so, contributed to these changes.‖
  • 55. ―The second hypothesis is that the history of innovation as “creativity” is that of three concepts (and their derivatives): Imitation → Invention → Innovation. Certainly, a lot has been written on imitation (literary theory and art theory), as well as invention (history, sociology, management and economics of technology). But no one has ever brought the two concepts together in a genealogical history, and neither has anyone looked at their contribution to the category innovation. Through Western history, imitation and invention have been contrasted, or are in tension. The dichotomy reaches its resolution with the idea of innovation in the twentieth century, particularly the idea of innovation as process: invention and imitation are two sequential steps in the process leading to innovation. ―
  • 56. ―The third hypothesis is about innovation as a break with the past. Innovation and the discourses on innovation serve to make sense of modern practices and values. On the one hand, innovation represents continuity with the past. It is continuity in the sense that innovation is about novelty, an idea that was present in many forms before innovation took on a central place in representations, as we will see. It is also continuity in the sense that innovation is, to many, concerned with technological invention, which is a dominant understanding of what invention came to mean over time. However, on the other hand innovation is a break with the past in the sense that it suggests that invention per se is not enough. There has to be use and adoption of the invention, namely innovation, in order for benefits to accrue. ―
  • 57. Joseph Schumpeter Innovation as Creative Destruction
  • 58. Innovation as a fundamental quality of all economic life Schumpeter sees the inherent creative ability or ―innovatory‖ potential of all human beings, no matter what their social standing, and the social leadership that follows such ―innovatory‖ ability, as being the most significant, and transhistorically or universally important force at work in all economic life. This is in marked difference to say Marx, and other ―classical economic theorists‖ of his time, who see this capability as being an enormously historically dependant development. For Schumpeter it is only through the entrepreneurial initiative of an ―innovative‖ individual who is capable of reducing the costs of their means of production to a level below that of their competitors in a ―stationary‖ and ―classical circular flow‖ model of the economy in which the costs of the goods produced and the price paid for them are meant to be equal – hence the ―stationary‖ model of analysis of economic system – that any capital is capable of being freed up for further ―innovation‖ and ―entrepreneurial‖ development, or investment, that and the economy is catapulted toward that ―dynamic‖ conceptualisation of it that is so indicative of modern capitalism. Or as Eduardo März, says: ―The qualitative leap from the stationary to the dynamic economy is brought about by the appearance of the entrepreneur and the innovations initiated by him in the areas of technology, product differentiation, marketing etc‖ Eduard März, (1991) Joseph Schumpeter. Scholar, Teacher and Politician. Yale University Press. New Haven and London.
  • 59. ―Schumpeter‘s most significant potential contribution[s] to our understanding of motion [i.e. change, progress, development, and transformation]in all economic systems was the emphasis he gave to the role of innovations. ― Allen Oakley, (1990) Schumpeter’s Theory of Capitalist Motion. A Critical Exposition and Reassessment. Edward Elgar. London
  • 60. ―The main emphasis in Schumpeter‘s theory of development is on the sporadic emergence in history of the innovator… [and the] ultimate cause of social development is to be found in the sporadic changes brought about by creative individuals [innovators] in the ‗productive combinations‘ or, in Marx‘s terms, in the ‗productive forces‘… [because] sooner or later these lead to institutional adjustments giving rise to a qualitatively new social structure. ― Eduard März, (1991) Joseph Schumpeter. Scholar, Teacher and Politician. Yale University Press. New Haven and London.
  • 61. ―Innovation is possible without anything we should identify as invention and invention does not necessarily induce innovation.‖ Schumpeter, J. (1939) Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process. McGraw Hill
  • 62. To Schumpeter innovations consists of any one of the following five phenomena: 1) Introduction of a new good; 2) Introduction of a new method of production; 3) Opening of a new market; 4) Conquest of a new supply of raw materials or half finished goods; 5) Implementation of a new form of organization.
  • 63. Henry Chesbrough Open Innovation
  • 64. “Open” vesus “Closed” Innovation
  • 65. Closed Innovation – Centralised R&D The institution of the central research lab and internal product development was thus a critical element of the rise of the modern industrial corporation. Centrally orgaizatized development were central to companies' strategies and were regarded as critical business investments. R&D Functions were a salient feature in the knowledge landscape of the economy, relatively insulated from the universities and small enterprises, relatively unconnected to the government, and largely self- contained.
  • 66. Underlying Logic The logic underlying this approach to innovation was one of closed centralized, internal R&D. At its root, the logic implies a need for deep vertical integration. In other words, in order to do anything, one must do everything internally, from tools and materials, to product design and manufacturing, to sales, service, and support. Outside the fortified central R&D castles, the knowledge landscape was assumed to be rather barren. Consequently, the firm should rely on itself - and not feeble outside suppliers-for its critical technologies.
  • 67. Xerox Similarly, Xerox needed to make its own toner, its own copier, its own light lens, and its own feeding and sorting subsystems in order to deliver high-volume, high-quality xerography to its customers. Because Xerox was pushing mechanical and electrical systems father than anyone else in its applications, there was no available supplier base with which to work. During the early years, Xerox found that it even needed to make its own paper; to get the optimal paper characteristics that would feed well through its copier systems.
  • 68. Erosion Factor 1: The Increasing Availability and Mobility of Skilled Workers Despite the company's dominance, the mobility of disk-drive engineers caused IBM's leadership to erode over time. An engineer named Al Shugart left IBM to go to Memorex, where he helped Memorex improve its hard-disk drives that plugged into IBM mainframe computers. Then he left Memorex to start a company called Shugart Associates' pursuing a new kind of hard-disk drive, the 8 inch disk drive, intended for minimal computers and workstations. Eventually when he fell out with the backers of Shugart, he left to start another new company, called Sea-gate, which made still smaller 5 inch drives for personal computers. With each job change he made, Shugart took a substantial number of people with him to the new company. Each of Shugart's new start-up companies was thus able to hit the ground running.
  • 69. Erosion Factor 2: The Venture Capital Market Prior to 1980, little VC was available in the United States. Although there were start-up companies that arose from people who migrated out of large firms, these new enterprises had to struggle to find capital. The ability of companies to attract older talented staff to due new venture was also impaired by a lack of adequate capital to justify file risk of leaving a well-capitalized company for an unknown start-up company.
  • 70. Erosion Factor 3 : External Options for Ideas Sitting on the Shelf The earlier tensions between the incentives of the research group and those of the development group gave rise to a buffer inventory of ideas sitting on the shelf. The tensions between these functions are not new, but now there is an important difference. As a result of the combination of erosion factors I and 2 there exists a second, outside path to market for many of these ideas.
  • 71. Erosion Factor 4: The Increasing Capability of External Suppliers When companies like IBM wanted to increase the performance of their early mass-storage systems, they found that they could not rely on external suppliers to supply components of sufficient technical capability in sufficient volume with high quality. More generally, companies seeking to create new products and services in the middle of the twentieth century found that the surrounding environment lacked the requisite knowledge, production experience, and financial capital to serve as reliable partners in building the materials, components, and systems needed to serve the market. Thanks to the confluence of Many of the factors already noted, such as tile expansion of universities and university enrollments, the availability of well-trained workers to companies of all sizes, and the increased presence of VC, the external supply base is much more developed that it was prior to WWII
  • 72. Open Innovation New Attitudes, Directions, and Practices The traditional paradigm that companies used to manage industrial R&D is indeed over in most industries. But that does not mean that internal R&D itself has become obsolete. What we need is a new logic of innovation to replace the logic of the earlier period. Companies must structure themselves to leverage this distributed landscape of knowledge, instead of ignoring it in the pursuit of their own internal research agendas. Companies increasingly cannot expect to warehouse their technologies, waiting until their own businesses make use of them. The new logic will exploit this diffusion of knowicdge, rather than ignore it. The new logic turns the old assumptions on their head. Instead of making money by hoarding technology for your own use, you make money by leveraging multiple paths to market for your technology. Instead of restricting the research function exclusively to inventing new knowledge, good research practice also includes accessing and integrating external knowledge. Instead of managing intellectual property as a way to exclude anyone else from using your technology, you manage IP to advance your own business model and to profit from your rivals'

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