Professional Documents
Culture Documents
(Courtesy of:
Paul Trott, Innovation Management and
New Product Development, 4th edition,
Prentice Hall; 2008.
Invention and innovation: an introduction.
http://labspace.open.ac.uk/course/view.php?id=
4339&topic=all
*http://en.wikipedia.org/wiki/Sinclair_C5
Importance of Innovation
Businesses operate with the knowledge that their competitors will inevitably
come to the market with a product that changes the basis of competition
A decline in product innovation leads to a decline in market share.
The ability to change and adapt is essential to survival.
Companies that do not invest in innovation put their future at risk. Their
business is unlikely to prosper, and they are unlikely to be able to compete if
they do not seek innovative solutions to emerging problems (Australian
government website, 2006).
Many small and medium-sized enterprises (SMEs) fail because they dont
see or recognize the need for change.
Innovation is the motor of the modern economy, turning ideas and
knowledge into products and services (UK Office of Science and Technology,
2000
innovation.
According to Statistics Canada, the following factors characterize successful
small and medium-sized enterprises
Innovation is consistently found to be the most important characteristic
associated with success.
Innovative enterprises typically achieve stronger growth or are more
successful than those that do not innovate.
Enterprises that gain market share and increasing profitability are those
that are innovative.(Government of Manitoba, Canada, 2006)
Worlds Most
Innovative
Companies
Types of Innovation
Innovation does not only involve major
(radical) technological advances but also
minor (incremental)
Incremental Innovation
Incremental innovation can occur in any
industry where product characteristics are
well understood and often standardized
Unit profit margins are usually low, production
technology is efficient
There is low uncertainty in the product and
related technology
This type of innovation focuses on cost,
quality, or feature improvements in products,
processes, or services
Radical Innovation
Radical innovation explores new technologies or
products
Potential profits are high
There is high uncertainty in the product and related
technology
This type of innovation focuses on products,
processes, or services with unprecedented
performance features
Radical innovations create a dramatic change in
existing markets or industries or they create new
markets/industries
*Float glass is a sheet of glass made by floating molten glass on a bed of molten metal, typically tin,
although lead and various low melting point alloys were used in the past. This method gives the sheet
uniform thickness and very flat surfaces. Modern windows are made from float glass.
*http://en.wikipedia.org/wiki/Float_glass
Models of Innovation
How innovation occurs
There are two schools of thought:
On the one hand the social 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.
On the other hand the individualistic school
argued that innovations were the result of unique
individual talents and such innovators are born.
Innovation Models
Linear Models
Simultaneous coupling model
Linear Model
There are two basic variations of this model
for product innovation.
Technology-push model
Market-pull model
Technology-push Model
Examples
Early motor cars.
The invention of the motor car involved technology push
with enthusiasts trying to improve the technology and
persuade people of the viability of the invention.
It was regarded as a toy until improved performance and
falling price made it an attractive product and market pull
became an important factor encouraging further
innovation.
Laser push because it arose out of mathematical theory and
scientific research and in the early stages of its development
had no obvious application.
Market-pull Model
In the 1970s that new studies of actual innovations suggested that the role of the marketplace was
influential in the innovation process.
The model emphasizes the role of marketing as an initiator of new ideas resulting from close interactions
with customers.
These, in turn, are conveyed to R&D for design and engineering and then to manufacturing for production.
In fast-moving
The managing director of McCain Foods argues that knowing your customer is crucial to turning
innovation into profits: He says
Its only by understanding what the customer wants that we can identify the innovative opportunities.
Then we see if theres technology that we can bring to bear on the opportunities that exist
A pulled process tries to find areas where customers needs are not met, and then focus
development efforts to find solutions to those needs
Example
Car airbags arising out of the need for
greater safety.
Cellular phone with camera,
Cars w. reduced emission
Examples
High-yielding varieties of wheat and rice pull
and push.
Pull was from the human need to feed people
more efficiently and the economic incentive to
capture a share of a steady market.
Push was from the outcome of scientific
research into biotechnology and gene
manipulation opening up new possibilities
Innovation in an
organizational context
Early inventions and innovations were the result of
individual effort or an outcome of family business
In previous centuries, it was easier to mobilize the
resources necessary to develop and commercialize a
new product the resources required were minimal
in comparison
Today significant innovations require an
organizational effort.
Recent innovations and scientific developments (ex.
cell phones, computers, new drugs, etc.) are
associated with organizations not individuals
Innovation in an
organizational context (CONT.)