Innovation & Technology Management
Lecture 1 – 30/01/2023
Paradigm = a common cohesive understanding of how a certain phenomenon must be
interpreted and explained.
Paradigm shifts – a revolutionary situation occurs = the dominant paradigm loses its
momentum or relevance and is challenged by other paradigms with alternative propositions
or narratives.
Innovation = transformation of an existing state of things, to introduce something new.
Basically, involves an ‘’improvement’’ in how something is being done or offered. It also
suggests a contextual relevance – how are things done currently in each society and how
can they be improved. Innovation is processual:
1. Identify a need or a problem
2. Develop a feasible solution
3. Produce/manufacture and market the solution
4. Achieve adoption/diffusion of the innovation
Fixing ideas for useful definitions of innovation
- Economic innovation = process of change that introduces economic and regulatory
elements concerning the needs of people in a society, how they are met, how the
goods and services are produced
- From an entrepreneur’s/innovator’s perspective, a problem-solving process that
involves searching for new combinations of known information, knowledge
- The role of the entrepreneurial innovator (small or large firm) is to activate and
coordinate all the relevant factors to produce the innovation
Other definitions
- Application of knowledge to solve/address a problem
- Technical approaches to improve business operations
- Application of science for commercial and industrial objectives
- Theoretical and practical knowledge and skills, artefacts useful for developing
products and services, as well as their production and delivery systems and
mechanisms
Process view of innovation
1. Obtain and gather information and knowledge (what are the sources?)
2. Organize
3. Deploy for commercial purpose
Innovation often can be a resource-intensive, uncertain, complex, and untidy process
OECD = the Oslo manual considers innovation as a new or improved product or process (or
combination thereof) that differs significantly from the unit’s previous products or processes
and that has been made available to potential users (product) or bought into use by the unit
(process). The definition also includes organizational and marketing innovations
But why innovate?
- To increase RoA?
- To solve problems?
, - It depends on how firms frame their problems and how they go forward to solve
them
What triggers innovation?
- Unexplored/unexploited opportunities
- New discoveries/knowledge
- Scarcity
- Competition
Innovate to improve the Economic Value Pie
Technology-push and demand-pull factors
Rate and direction of innovative activity and the socio-institutional-techno-economic linkage
- The rate and direction of
innovative activity in a
society are determined
by these four importance
dimensions
- The linkages across these
four dimensions are
often intricate
, - At large, the stock of and diffusion of information/ideas; preferences, habits and
needs of people; distribution of wealth and knowledge, are major items to account
for to obtain a deeper understanding of the nature of innovation in each society
- An innovator will have to study the dynamics among these factors to better assess
opportunities and scope for creating new ones
Environmental factors shaping innovation
Competitive forces and innovation
- Ultimately firms care for
performance
- Specifically, expected
profitability = E{revenue-
cost}
- What factors influence
potential revenue?
- What factors drive potential
costs?
Innovation has become common
theme across industries. Different
industries and different firm-types within an industry pursue different kinds of innovation.
Innovations: functionally valuable, efficiency, and revenue generating
Types of innovation
1. Product innovation = involves production of goods or services that are entirely
new, or modified
2. Process innovation = involves changes in the method of production or delivery of
goods and services
3. Organizational innovation = refers to new forms of organization of business
operations
4. Marketing innovation = involves design/packaging of the product, mode of
promotion and placement on the market, as well as methods for determining the
selling prices of goods and services
5. Business-model innovation = the discovery of a fundamentally different business
model in an existing business
Lecture 1 – 30/01/2023
Paradigm = a common cohesive understanding of how a certain phenomenon must be
interpreted and explained.
Paradigm shifts – a revolutionary situation occurs = the dominant paradigm loses its
momentum or relevance and is challenged by other paradigms with alternative propositions
or narratives.
Innovation = transformation of an existing state of things, to introduce something new.
Basically, involves an ‘’improvement’’ in how something is being done or offered. It also
suggests a contextual relevance – how are things done currently in each society and how
can they be improved. Innovation is processual:
1. Identify a need or a problem
2. Develop a feasible solution
3. Produce/manufacture and market the solution
4. Achieve adoption/diffusion of the innovation
Fixing ideas for useful definitions of innovation
- Economic innovation = process of change that introduces economic and regulatory
elements concerning the needs of people in a society, how they are met, how the
goods and services are produced
- From an entrepreneur’s/innovator’s perspective, a problem-solving process that
involves searching for new combinations of known information, knowledge
- The role of the entrepreneurial innovator (small or large firm) is to activate and
coordinate all the relevant factors to produce the innovation
Other definitions
- Application of knowledge to solve/address a problem
- Technical approaches to improve business operations
- Application of science for commercial and industrial objectives
- Theoretical and practical knowledge and skills, artefacts useful for developing
products and services, as well as their production and delivery systems and
mechanisms
Process view of innovation
1. Obtain and gather information and knowledge (what are the sources?)
2. Organize
3. Deploy for commercial purpose
Innovation often can be a resource-intensive, uncertain, complex, and untidy process
OECD = the Oslo manual considers innovation as a new or improved product or process (or
combination thereof) that differs significantly from the unit’s previous products or processes
and that has been made available to potential users (product) or bought into use by the unit
(process). The definition also includes organizational and marketing innovations
But why innovate?
- To increase RoA?
- To solve problems?
, - It depends on how firms frame their problems and how they go forward to solve
them
What triggers innovation?
- Unexplored/unexploited opportunities
- New discoveries/knowledge
- Scarcity
- Competition
Innovate to improve the Economic Value Pie
Technology-push and demand-pull factors
Rate and direction of innovative activity and the socio-institutional-techno-economic linkage
- The rate and direction of
innovative activity in a
society are determined
by these four importance
dimensions
- The linkages across these
four dimensions are
often intricate
, - At large, the stock of and diffusion of information/ideas; preferences, habits and
needs of people; distribution of wealth and knowledge, are major items to account
for to obtain a deeper understanding of the nature of innovation in each society
- An innovator will have to study the dynamics among these factors to better assess
opportunities and scope for creating new ones
Environmental factors shaping innovation
Competitive forces and innovation
- Ultimately firms care for
performance
- Specifically, expected
profitability = E{revenue-
cost}
- What factors influence
potential revenue?
- What factors drive potential
costs?
Innovation has become common
theme across industries. Different
industries and different firm-types within an industry pursue different kinds of innovation.
Innovations: functionally valuable, efficiency, and revenue generating
Types of innovation
1. Product innovation = involves production of goods or services that are entirely
new, or modified
2. Process innovation = involves changes in the method of production or delivery of
goods and services
3. Organizational innovation = refers to new forms of organization of business
operations
4. Marketing innovation = involves design/packaging of the product, mode of
promotion and placement on the market, as well as methods for determining the
selling prices of goods and services
5. Business-model innovation = the discovery of a fundamentally different business
model in an existing business
