BUTM 404 – Innovation Management 11

Innovation ManagementInnovation Management

Prepared by

Milan Frankl

for

University Canada West

CHAPTER 1CHAPTER 1Innovation management Innovation management – – an introductionan introduction

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Learning objectives Learning objectives

– Recognize the importance of innovation – Explain the meaning and nature of innovation management – Provide an introduction to a management approach to innovation – Appreciate the complex nature of the management of innovation

within organizations – Describe the changing views of innovation over time – Recognize the role of key individuals within the process – Recognize the need to view innovation as a management

process.

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Why innovation is important. Why innovation is important.

Adam Smith and Classical Economics (1776)

– Wealth of nations: surplus Labour

Marxist Economics

– Social progress: changes in modes of production

John Maynard Keynes

– Fiscal policy

Peter Drucker: the Growing Economic Significance of Science and Technology

– Intellectual Labour: knowledge workers

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Why innovation is important. (continued)Why innovation is important. (continued)

Economic Theories Incorporating Science and Technology

– long-wave theory (Kondratieff): technology innovation occurs in clusters

textile, steam engine, railway auto, electricity, radio electronics: computing, semi-conductors telecommunication www

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Why innovation is important. (continued)Why innovation is important. (continued)

Entrepreneurs vs. Governments

– Available capital vs. economies of scale

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Why innovation is important. (continued)Why innovation is important. (continued)

The Push and Pull of Modern Science and Technology

Linear model: concentrates on what is driving the downstream efforts rather than on how innovations occur.

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Definitions: Definitions:

Innovation = application of knowledge

Innovation =

theoretical conception + technical invention + commercial exploitation

innovation as a process as opposed to a single eventinnovation as a process as opposed to a single event

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Different types of innovation Different types of innovation

Product innovation

Process innovation

Organizational innovation

Commercial innovation

Marketing innovation

Service innovation

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Changing views of innovation over time (continued)Changing views of innovation over time (continued)

Simultaneous coupling model

– suggests that it is the result of the simultaneous coupling of the knowledge within all three functions that will foster innovations. The starting point for innovation is not known in advance.

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Changing views of innovation over time (continued)Changing views of innovation over time (continued)

Interactive model

– links together the technology push and market pull models of innovation.

– innovations occur as the result of the interaction of the marketplace, the science base and the organization’s capabilities.

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innovation as a management processinnovation as a management process

Sharing knowledge model

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Pause for though questionsPause for though questions

.

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Pause for though questionsPause for though questions

.Not all firms develop innovative new products, but they still seem to survive. Do they thrive?

While innovation is important it is possible to survive especially in the short term by focusing on traditional concerns such as minimizing costs and generating sales.

In the longer term, however, few firms will survive for long without the need to change; and that means introducing new ways of working and new products and services

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Pause for though questionsPause for though questions

If two different firms, similar in size, operating in the same industry spend the same on R&D, will their level of innovation be the same?

While R&D expenditure is important, innovation performance is dependent on many factors

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Pause for though questionsPause for though questions

In 2003 the BBC ran a series of television programs exploring the innovation route from idea to retail shelf. Viewers were asked to cast their vote on a selection of innovative prototype products, the winning three products would receive financial and technical backing to develop and market their idea. Which of the above are inventions and which are innovations?

The key here is to establish which ones made it to the market place and which ones remained on the drawing board. This is the key distinction between invention and innovation.

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Pause for though questionsPause for though questions

Surely all innovations start with an idea and end with a product, does that not make it a linear process?

The issue here is what is meant by linear models. They key point is that the activities occur in a straight line as opposed to an iterative process involving forward and backward stages.

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Questions ?Questions ?

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