2. Types and Patterns of
Innovation
Technology trajectory The path a technology takes through its
lifetime. This path may refer to its rate of performance improvement, its
rate of diffusion, or other change of interest.
3. TYPES OF INNOVATION
Product Innovation versus Process Innovation
Product innovations are embodied in the outputs of an
organization—its goods or services. For example, Honda’s
development of a new hybrid electric vehicle is a product
innovation.
Process innovations are innovations in the way an
organization conducts its business, such as in the techniques of
producing or marketing goods or services.
4. TYPES OF INNOVATION
Radical Innovation versus Incremental Innovation
Radical innovation An innovation that is very new and
different from prior solutions.
incremental innovation An innovation that makes a
relatively minor change from (or adjustment to) existing
practices.
5. TYPES OF INNOVATION
Competence-Enhancing Innovation versus Competence-
Destroying Innovation
Competenceenhancing (-destroying) innovation An
innovation that builds on (renders obsolete) existing knowledge
and skills. Whether an innovation is competence enhancing or
competence destroying depends on whose perspective is being
taken. An innovation can be competence enhancing to one firm,
while competence destroying for another.
6. TYPES OF INNOVATION
Architectural Innovation versus Component Innovation
Component (or modular) innovation An innovation to
one or more components that does not significantly affect the
overall configuration of the system.
Architectural innovation An innovation that changes the
overall design of a system or the way its components interact
with each other.
7. TYPES OF INNOVATION
Using the Dimensions
Though the dimensions described above are useful for
exploring key ways that one innovation may differ from
another, these dimensions are not independent, nor do they offer
a straightforward system for categorizing innovations in a
precise and consistent manner.
8. TECHNOLOGY S-CURVES
S-Curves in Technological Improvement
Many technologies exhibit an s-curve in their performance
improvement over their lifetimes.7 When a technology’s
performance is plotted against the amount of effort and money
invested in the technology, it typically shows slow initial
improvement, then accelerated improvement, then diminishing
improvement
9. TECHNOLOGY S-CURVES
S-Curves in Technology Diffusion
S-curves are also often used to describe the diffusion of a
technology. Unlike s-curves in technology performance, s-
curves in technology diffusion are obtained by plotting the
cumulative number of adopters of the technology against time.
10. TECHNOLOGY S-CURVES
S-Curves as a Prescriptive Tool
Several authors have argued that managers can use the s-
curve model as a tool for predicting when a technology will
reach its limits and as a prescriptive guide for whether and
when the firm should move to a new, more radical technology
