INNOVATION Some basic definitions
Joseph A. Schumpeter  (1883-1950)
What is “Innovation”?  <ul><li>Schumpeter called it in 1939 “a process of creative destruction” </li></ul><ul><ul><li>Why ...
Who was Schumpeter? <ul><li>Joseph Alois Schumpeter (1883-1950) </li></ul><ul><ul><li>among the first to lay out a clear c...
 
Process of Creative Destruction <ul><li>In capitalism:  </li></ul><ul><ul><li>Innovation by entrepreneurs… </li></ul></ul>...
Creative Destruction <ul><li>Competition naturally increases </li></ul><ul><ul><li>Through price, strategy, campaigns, etc...
Innovation And Growth: Schumpeterian Perspectives  by Scherer, F. M. MIT Press, 1986  competition time profit time
Convergence <ul><li>A natural evolutionary tendency towards a “static equilibrium” </li></ul><ul><li>That requires cycles ...
Implications <ul><li>Profit is gradually lost ($) </li></ul><ul><li>Recognition or novelty also gradually lost </li></ul><...
Implications <ul><li>Introducing changes is expensive, difficult, time-consuming and uncertain... </li></ul><ul><li>So com...
Implications <ul><li>People naturally resist change  </li></ul><ul><ul><li>Arousal threshold </li></ul></ul><ul><ul><li>Le...
<ul><li>Creative destruction in design </li></ul>Understanding
A system of telegraphy
 
Patent number : 174465 Issue date : Mar 7, 1876 Inventor : ALEXANDER GRAHAM BELL
Samuel Morse
Samuel Morse
Phonograph
 
Ivan Sutherland / Douglas Engelbart 1968
2005
 
Apple Newton, eMate & Pippin
Palm Tungsten, Xbox 360
Sinclair C5
Segway
 
 
 
 
creative? destruction?
Sholes and Glidden (1875)    Palm Tungsten (2005)
 
Role of Design <ul><li>Radical innovations  </li></ul><ul><ul><li>Technological improvements </li></ul></ul><ul><li>Increm...
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What is innovation?

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Some basic notions of innovation including creative destruction by Schumpeter, etc. Presentación en el curso de Innovación y Diseño del ITESM campus Querétaro

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  • (c) Ricardo Sosa 2006-08 rdsosam@itesm.mx Tech Innovation ITESM Querétaro
  • Transcript of "What is innovation?"

    1. 1. INNOVATION Some basic definitions
    2. 2. Joseph A. Schumpeter (1883-1950)
    3. 3. What is “Innovation”? <ul><li>Schumpeter called it in 1939 “a process of creative destruction” </li></ul><ul><ul><li>Why is this important? </li></ul></ul><ul><ul><li>Why “a process”? </li></ul></ul><ul><ul><li>Why “creative”? </li></ul></ul><ul><ul><li>Why “destruction”? </li></ul></ul><ul><ul><li>Why is this a definition of innovation? </li></ul></ul>
    4. 4. Who was Schumpeter? <ul><li>Joseph Alois Schumpeter (1883-1950) </li></ul><ul><ul><li>among the first to lay out a clear concept of entrepreneurship </li></ul></ul><ul><ul><li>entrepreneurs introduce new means of production, new products, and new forms of organization </li></ul></ul><ul><ul><li>innovations cause old inventories, ideas, technologies, skills (experience), and equipment to become obsolete </li></ul></ul>http://www.econlib.org/library/Enc/bios/Schumpeter.html
    5. 6. Process of Creative Destruction <ul><li>In capitalism: </li></ul><ul><ul><li>Innovation by entrepreneurs… </li></ul></ul><ul><ul><li>is the force that enables economic growth… </li></ul></ul><ul><ul><li>by destroying the worth of existing products… </li></ul></ul><ul><ul><li>continuously introducing differences… </li></ul></ul><ul><ul><li>that bring larger profits through uniqueness </li></ul></ul>
    6. 7. Creative Destruction <ul><li>Competition naturally increases </li></ul><ul><ul><li>Through price, strategy, campaigns, etc </li></ul></ul><ul><ul><li>Through product differences (real or perceived) </li></ul></ul>
    7. 8. Innovation And Growth: Schumpeterian Perspectives by Scherer, F. M. MIT Press, 1986 competition time profit time
    8. 9. Convergence <ul><li>A natural evolutionary tendency towards a “static equilibrium” </li></ul><ul><li>That requires cycles of incremental development </li></ul><ul><ul><li>Triggered by occasional changes (entrepreneurs) </li></ul></ul><ul><ul><li>Most of them fail (high failure rate) </li></ul></ul>Innovation And Growth: Schumpeterian Perspectives by Scherer, F. M. MIT Press, 1986
    9. 10. Implications <ul><li>Profit is gradually lost ($) </li></ul><ul><li>Recognition or novelty also gradually lost </li></ul><ul><li>As competitors introduce improved solutions or decrease costs </li></ul>
    10. 11. Implications <ul><li>Introducing changes is expensive, difficult, time-consuming and uncertain... </li></ul><ul><li>So companies innovate because (and until) they have to . </li></ul>
    11. 12. Implications <ul><li>People naturally resist change </li></ul><ul><ul><li>Arousal threshold </li></ul></ul><ul><ul><li>Learning curves </li></ul></ul><ul><ul><li>Expenses </li></ul></ul><ul><ul><li>Dangers </li></ul></ul><ul><ul><li>Habits </li></ul></ul><ul><ul><li>Identity </li></ul></ul><ul><ul><li>etc... </li></ul></ul>
    12. 13. <ul><li>Creative destruction in design </li></ul>Understanding
    13. 14. A system of telegraphy
    14. 16. Patent number : 174465 Issue date : Mar 7, 1876 Inventor : ALEXANDER GRAHAM BELL
    15. 17. Samuel Morse
    16. 18. Samuel Morse
    17. 19. Phonograph
    18. 21. Ivan Sutherland / Douglas Engelbart 1968
    19. 22. 2005
    20. 24. Apple Newton, eMate & Pippin
    21. 25. Palm Tungsten, Xbox 360
    22. 26. Sinclair C5
    23. 27. Segway
    24. 32. creative? destruction?
    25. 33. Sholes and Glidden (1875)  Palm Tungsten (2005)
    26. 35. Role of Design <ul><li>Radical innovations </li></ul><ul><ul><li>Technological improvements </li></ul></ul><ul><li>Incremental innovations </li></ul><ul><ul><li>Design improvements </li></ul></ul><ul><li>Equally important </li></ul><ul><ul><li>in economic terms </li></ul></ul><ul><ul><li>as design challenges </li></ul></ul>

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