Management of Innovation

Ch 1. Introduction
Kimin Kim, Ph.D.

www.ajou.ac.kr

Innovation?
What is Innovation?
http://www.youtube.com/watch?v=2NK0WR2GtFs

Innovation is a process of turning ideas

into reality and capturing value from
them.
What is Innovation Management?
http://www.youtube.com/watch?v=Cv4Y3LzgdrM

Importance of Technological Innovation

Technological innovation is now the single
most important driver of competitive
success in many industries.
Many firms earn over one-third of sales on
products developed within last 5 years.
Product innovations help firms protect and
increase margins by offering new,
differentiated features.
Process innovations help firms make
manufacturing more efficient.
3

Importance of Technological Innovation

(cont.)

Advances in IT (information technology)

& rapid globalization have enabled
faster innovation with more efficiency .
CAD/CAM systems enable rapid design &
shorter production runs.
R&D, outsourcing, manufacturing, &
marketing at the global level has already
become a norm.
How would 3D printing technology change
the world?

Advances in IT & rapid globalization have

lead to:
More rapid new product introductions

Impact of Innovation on Society

Innovation enables a wider range of goods
& services to be delivered to people
worldwide.

Enables more efficient food production,

improved medical technologies, better
transportation, etc.
Increases Gross Domestic Product by making
labor & capital more effective and efficient.
However, may result in negative
externalities.
- e.g., pollution, erosion, antibiotic-resistant
bacteria, etc.

Innovation by Industry:
The Importance of Strategy

Successful innovation requires carefully

crafted strategies & implementation
processes.
Innovation funnel
Most innovative ideas do NOT become
successful new products.

Brief Research
How long does new product development
(in industry) take?

A recent study found:

Length of development cycle varies with
innovativeness of project:
Incremental projects took 6.5 months
from concept to market introduction.
More innovative projects took just over
14 months.
New-to-the-world products took 24
months.
On average, however, firms reported 12%
to 40% shorter cycle times than they
reported in 1995.

Discussion Questions
1. Why is innovation so important for
firms to compete in many industries?
2. What are some of the advantages of
technological innovation?
Disadvantages?

3. Why do you think so many innovation

projects fail to generate an economic
return?

Lets set up teams & schedule

Ice break & partner selection
Team formation & scheduling
Team
#

Assnmt. I
Members

Date of
Case PT

Assnmt. II

Chap
.

Date of
Disc. PT

Chap.

March 20

May 1

March 27

May 8

10

April 3

May 15

11

April 10

May 22

12

April 17

May 29

13

Cf. Midterm exam period: Apr. 20~24

Final exam period:
Jun. 15~19