A presentation for chapter 1 of innovation management.

1. Innovation Management:
By: Ronalyn I. Garcia

2. OBJECTIVES
1. recognize the importance of innovation.
2. Provide an introduction to a management approach
of innovation
3. Appreciate the. complex nature of the innovation
management.
4. Describe the changing views of innovation
overtime.
5. explain the meaning and nature of innovation
management.
6. Recognize the need to view innovation as a
management process.

3. INNOVATION

4. ‘. . . NOT to innovate is to die’
by Christopher Freeman (1982) in his famous study of the
economics of innovation.

5. “Success today does not ensure
success tomorrow”
The ability of firms to develop new products and services that people want will
surely help them survive into the future.

6. The ability to change and adapt is
essential to survival.

9. WHAT IS
INNOVATION?

10. • a way to create new business.
• Employees, customers and suppliers are principal actors in the
process of innovation.
• a process that requires change. Change in the way of thinking
and acting. In this book innovation is viewed as a management
process.
Innovation

11. •Industrial technological innovation led to substantial economic benefits.
•Technological innovations have also been an important component in
the progress of human societies.

12. Innovation has long been argued to be the
ENGINE OF GROWTH.
Acceleration in economic growth was the result of
technological progress
19th CENTURY
The importance of new products as stimuli to
economic growth.
“Competition posed by new products was
far more important than marginal changes
in the prices of existing products.” Joseph Schumpeter

13. Karl Marx - first suggested that innovations could be associated with waves of economic
growth.
Schumpeter, Kondratieff and Abernathy and Utterback (1978) have argued the
LONG WAVE THEORY OF INNOVATION.
Economic development occur in bursts or waves of activity.

16. Abernathy and Utterback
The birth of any industrial sector there is radical product innovation, which is
then followed by radical innovation in production processes, followed, in
turn, by widespread incremental innovation.
Radical innovation blows up the existing system or
processes and replaces it with something entirely new.

18. VIEW INNOVATION IN AN ORGANISATIONAL CONTEXT

19. Innovation is a team game.

20. Listening to your customer may actually stifle technological
innovation and be detrimental to long-term business success
To be successful in industries characterized by technological change,
firms may be required to pursue innovations that are not demanded by
their current customers
Studies by Christensen (2003) and Hamel and Prahalad (1994)

21. by Christensen)
DISRUPTIVE INNOVATIONS AND SUSTAINING INNOVATIONS
Sustaining innovations - provide improvements to established products.
Disruptive innovations - provide improvements greater than those demanded.
Disruptive innovations tend to create new markets, which eventually captured
the existing market.
(radical or incremental innovations)

22. INDIVIDUALS IN THE INNOVATION PROCESS
Individuals are the key component of the innovation process
✓Define the problems,
✓Generate ideas
✓Perform creative linkages and associations that lead to
inventions.
✓Decide what activities should be undertaken,
✓Decide the mount of resources to be deployed and how
they should be carried out.

23. Innovation as a process and not a
single event.

24. 1. What is new to one company may be old to another.
2. How does one judge success?
3. What is viewed as a success today may be viewed as
a failure in the future.
GAME OF SEMANTICS
NEW . CREATIVITY . DISCOVERY.

25. ENTREPRENEURSHIP
Innovation management is covered with the term entrepreneurship.
Entrepreneurship focus on the role of the individual entrepreneur and on small
business growing into a large one.
This focus distinguishes the study of entrepreneurship from the study of innovation
management
The pursuit of opportunity beyond the resources you currently control.
By Howard Stevenson

26. DESIGN
Applied activity within research and development.
In some industries design is the main component of product development.
While in other industries, design forms only a small part of the product
development activity.

28. INNOVATION & INVENTION
Innovation is not a single action but a total process of interrelated sub
processes. It is not just the conception of a new idea, nor the invention of a
new device, nor the development of a new market. The process is all these
things acting in an integrated fashion.
By Myers and Marquis (1969)

29. Innovation is concerned with the commercial and practical application of
ideas or inventions.
Invention is the conception of the idea, whereas innovation is the subsequent
translation of the invention into the economy.
Innovation equation:
Innovation = theoretical conception + technical invention + commercial
exploitation

30. Conception is a new ideas or a thought or collection of thoughts.
Invention is the process of converting intellectual thoughts into a tangible
new artifact (product/process) where science and technology usually play a
significant role.
Exploitation refers to inventions combined with hard work by many different
people and convert into products that will improve company performance.
Innovation = theoretical conception + technical invention + commercial exploitation

31. Innovation is the management of all the activities involved in the process of
idea generation, technology development, manufacturing and marketing of a
new (or improved) product or manufacturing process or equipment.
Creativity: the thinking of novel and appropriate ideas.
Innovation: the successful implementation of those ideas within an
organization.
By 3M Senior Vice-President

32. DIFFERENT TYPES OF INNOVATION

33. TECHNOLOGY AND SCIENCE
Science refers to systematic and formulated knowledge.
Technology is an application of science. Technology is not an accident of
nature. It is the product of deliberate action by human beings.
Technology refers to knowledge applied to products or production
processes.

34. ENGINEERS VS. SCIENTISTS

35. MODELS OF INNOVATION
Traditional arguments about innovation have centered on two schools of
thought.
1. Social deterministic school argued that innovations were the result of
a combination of external social factors and influences, such as
demographic changes, economic influences and cultural changes. The
argument was that when the conditions were right, innovations would
occur.
2. Individualistic school argued that innovations were the result of
unique individual talents and such innovators are born. Closely
linked to the individualistic theory is the important role played by
serendipity (luck).

36. The literature on what drives innovation has tended to divide into two schools of
thought:
1. Market-based view - argues that market conditions provide the context that
facilitates or constrains the extent of firm innovation activity.
2. Resource-based view - argues that when firms have resources that are
valuable, rare and not easily copied they can achieve a sustainable
competitive advantage.

37. SERENDIPITY
The role of serendipity or luck is offered as an explanation for unexpected
discovery.
Serendipity is rare indeed.
Discoveries may not be expected, but in the words of Louis Pasteur,
‘chance favours the prepared mind’.

38. LINEAR MODEL
Innovation occurs through the interaction of the:

39. TECHNOLOGY DRIVEN MODEL (TECHNOLOGY PUSH)

40. CUSTOMER NEED-DRIVEN MODEL (MARKET-PULL MODEL)

41. SIMULTANEOUS COUPLING MODEL
The model suggests that innovation is the result of the simultaneous coupling
of the knowledge within all three functions that will foster innovation.

42. INTERACTIVE MODEL
It emphasizes that innovations occur as the result of the interaction of the
marketplace, the science base and the organization's capabilities.

43. ● Market
● Firms competencies
● External and internal sources
SOURCES OF INNOVATION

44. INNOVATION LIFE CYCLE AND DOMINANT DESIGNS
Innovative new product is the beginning of technology progress
Competition
Technological
Change &
Product
Innovation
Product innovation, process innovation, competitive environment and
organizational structure all interact and are closely linked together
Process innovations
As the life cycle proceeds,
a dominant design
usually emerges prior to
standardization and an
emphasis on lowering
cost

45. SAILING SHIP EFFECT
The notion that the substitution threat of new
radical technologies (steamships) may lead to
a renewed spurt of innovation in an old and
established technology (sailing ships).

46. ARCHITECTURAL INNOVATION
Improving a product’s architecture
only without significant impact on
components yields some but
limited innovation
RADICAL INNOVATION
Both components and architecture
are innovated at the same time
radical innovation or even
disruption is said to take place
INCREMENTAL INNOVATION
Limited innovation to either
components or architecture
MODULAR INNOVATION
Improving a product’s components
only without significant impact on
architecture yields some but
limited innovation
HENDERSON-CLARK MODEL
CHARACTERISING INNOVATION
IMPACT
ON
ARCHITECTURAL
KNOWLEDGE
IMPACT ON COMPONENT KNOWLEDGE

48. OPEN INNOVATION
Information–creation process that arises out of social interaction.
•The use of cheap and instant information flows
•Linkages and the supply chain
•Learning through experimentation
Firms which engage in collaboration with external agents tend to be more innovative
than firms that rely on their own resources for innovation
Learning can be characterized by
‘Doing, Using and Interacting’ (DUI)
mode of innovation where extensive on-the job problem solving
occurs and where firms interact and share experiences.

50. DISCONTINUOUS INNOVATIONS
Schumpeter referred
to this concept as
CREATIVE
DESTRUCTION
It creates a new market by applying a different set of values, which take
over the existing market.
Discontinuous changes are sometimes referred to disruptive innovation
This is an opposite of a sustaining innovating which does not affect
existing markets

51. This very same pattern of disruption can be observed with
•steamships (which disrupted sailing ships);
•music downloads (which disrupted CDs); and
•internet shopping (which disrupted high street retailing).
•Disk drive industry
•Video rental services
•Department stores and
•Newspapers.

52. 1. Engage in wide exploratory innovation search activities, looking
beyond their own knowledge base and domain of expertise;
2. Identify the advantages offered by new combinations of existing
knowledge, through the application of technologies and materials
initially developed elsewhere;
3. Often partner with unusual firms, beyond the usual sphere of
collaboration;
4. Engage with partner companies to establish a close working
relationship;
5. Promote lateral thinking within an existing web of partners.
SUCCESSFUL INNOVATORS