Samenvatting – Innovation
management
Lecture 1: An introduction to innovation
- What is innovation? (Joseph A. Schumpeter)
Invention = An idea, a sketch or a model for a new or improved device, product, process or
system.
Innovation = The process and outcome of creation and commercialization of something new
Innovation includes opportunity identification, ideation or invention to development,
prototyping, production, marketing and sales.
Entrepreneurship -> Only need to involve commercialization (depending which definition of
entrepreneurship is applied)
Innovation = invention + exploitation
- How does innovation benefit society?
Innovations push changes in different industries, they change businesses and society. Example:
electric cars cause huge changes in the automobile industry.
Another example is innovations within the pharmaceutical industry, which caused for us having a
higher life expectancy and deadly diseases being curable.
Total factor productivity = Used by economics to measure the contribution of innovation activity to
economic growth. (This has declined overtime)
Following reasons for the declination
Average wait time on patent applications
Federal R&D spending – spendings decreased after an initial increase
Post-secondary degrees in Science, Technology, Engineering & Math – overtime the number
of degrees which are crucial for innovation, have declined.
, - What is innovation about?
Creating (and destruction)
Change
Novelty (originality or newness)
- Why is innovation difficult?
Innovation funnel – Most innovative ideas do not become successful new products
Reasons:
Carefully crafted strategies are required
Barriers, competitors, innovation patterns, environment, etc.
- Innovation and failure
Most new ideas fail in the market (an estimated 70-90%)
- Innovation can also emerge from failure
Jeff Bezos founding Amazon after his business failed several times before.
Walt Disney was fired because “he lacked imagination and had no ideas”
Henry Ford’s first entrepreneurial attempts failed several times before being successful with
Ford Motor Company
, - Sources of innovation
R&D by firms = Refers to both basic and applied research
Basic research aims at increasing understanding of a topic or field without an immediate
commercial application in mind
Applied research aims at increasing understanding of a topic or field to meet a specific need
Development = Refers to activities that apply knowledge to produce useful devices, materials and
processes.
R&D = Refers to a range of activities that extend from early exploration of a domain to specific
commercial implementations.
- Demand pull / technology push
Originate from linear models
Technology/science push
Scientific discovery Invention Manufacturing Marketing
Linear model emphasizes “supply side”
Need/demand pull
Customers suggestions Inventions Manufacturing
Linear model emphasizes “demand side”
However, An innovation process is likely to be non-linear
, Most current research emphasizes that innovation originates from a variety of sources and
follow a variety of paths
- Supply and demand determinants
Supply determinants of innovation (what pushes the supply side)
Technological opportunity – State of the relevant scientific and technological knowledge
Cost and availability of inputs – Knowledge workers, scientific personnel, equipment
Appropriability – Ability to capture profit from innovation
Demand determinants of innovation (what pushes the demand side)
Cost reduction potential from innovation (process innovation; new sources of supply;
organizational change)
Consumer or producer benefit from novel product (product innovation)
Consumer or producer benefit from improvements (incremental product innovation)
- TP/DP risks
Technology push risk is that solutions are developed when there is no problem
Demand pull missing ability to invent technology to solve problem
- Rothwell’s five generations of innovation models
management
Lecture 1: An introduction to innovation
- What is innovation? (Joseph A. Schumpeter)
Invention = An idea, a sketch or a model for a new or improved device, product, process or
system.
Innovation = The process and outcome of creation and commercialization of something new
Innovation includes opportunity identification, ideation or invention to development,
prototyping, production, marketing and sales.
Entrepreneurship -> Only need to involve commercialization (depending which definition of
entrepreneurship is applied)
Innovation = invention + exploitation
- How does innovation benefit society?
Innovations push changes in different industries, they change businesses and society. Example:
electric cars cause huge changes in the automobile industry.
Another example is innovations within the pharmaceutical industry, which caused for us having a
higher life expectancy and deadly diseases being curable.
Total factor productivity = Used by economics to measure the contribution of innovation activity to
economic growth. (This has declined overtime)
Following reasons for the declination
Average wait time on patent applications
Federal R&D spending – spendings decreased after an initial increase
Post-secondary degrees in Science, Technology, Engineering & Math – overtime the number
of degrees which are crucial for innovation, have declined.
, - What is innovation about?
Creating (and destruction)
Change
Novelty (originality or newness)
- Why is innovation difficult?
Innovation funnel – Most innovative ideas do not become successful new products
Reasons:
Carefully crafted strategies are required
Barriers, competitors, innovation patterns, environment, etc.
- Innovation and failure
Most new ideas fail in the market (an estimated 70-90%)
- Innovation can also emerge from failure
Jeff Bezos founding Amazon after his business failed several times before.
Walt Disney was fired because “he lacked imagination and had no ideas”
Henry Ford’s first entrepreneurial attempts failed several times before being successful with
Ford Motor Company
, - Sources of innovation
R&D by firms = Refers to both basic and applied research
Basic research aims at increasing understanding of a topic or field without an immediate
commercial application in mind
Applied research aims at increasing understanding of a topic or field to meet a specific need
Development = Refers to activities that apply knowledge to produce useful devices, materials and
processes.
R&D = Refers to a range of activities that extend from early exploration of a domain to specific
commercial implementations.
- Demand pull / technology push
Originate from linear models
Technology/science push
Scientific discovery Invention Manufacturing Marketing
Linear model emphasizes “supply side”
Need/demand pull
Customers suggestions Inventions Manufacturing
Linear model emphasizes “demand side”
However, An innovation process is likely to be non-linear
, Most current research emphasizes that innovation originates from a variety of sources and
follow a variety of paths
- Supply and demand determinants
Supply determinants of innovation (what pushes the supply side)
Technological opportunity – State of the relevant scientific and technological knowledge
Cost and availability of inputs – Knowledge workers, scientific personnel, equipment
Appropriability – Ability to capture profit from innovation
Demand determinants of innovation (what pushes the demand side)
Cost reduction potential from innovation (process innovation; new sources of supply;
organizational change)
Consumer or producer benefit from novel product (product innovation)
Consumer or producer benefit from improvements (incremental product innovation)
- TP/DP risks
Technology push risk is that solutions are developed when there is no problem
Demand pull missing ability to invent technology to solve problem
- Rothwell’s five generations of innovation models
