Innovation

Management
 “Not to innovate is
to die”

- Christopher Freman (1982)

Study of economics of
innovation
World’s most innovative
companies
2006
1- Apple

2- Google

3- 3M

2010
1- Facebook

2 – Amazon

3- Apple

4- Google
 - Innovation is the Engine of
growth
 INNOVATION PROCESS

Firms operating
Creative Functions and
Scientific & Individuals Activities
Technological Firms develop
Developments Knowledge ,
Enevitably lead processes and
To knowledge products
Inputs

Firms architecture
And external linkages

Societal changes & market needs lead to demands &

opportunities
Innovation process
 It includes :-


Economic perspective
Business management strategy
perspective
Organizational Behavior which looks
at internal activities


 No. of disciplines contribute to our

understanding of the innovation
process
Note:- More recent innovations &
scientific developments such as
significant discoveries are now
associated with organizations
rather than individuals

Year New Product Responsible
1930 Polythene ICI
organization
1945 Ball Point Pen Reynolds Int. Pen
1970/80 Photo copying Zerox
Company
1970/80 Personal Computer Apple Comp
1980/90 Computer Operating Microsoft
2000 Cell Phones
System – Win 95 Motorola / Nokia
2005 MP3 Players Creative ; Apple
* Individuals in the innovation
process
Inventor
Business Sponsor
Entrepreneur


 Within organizations it is individuals

who defined problems , have ideas
& perform creative linkages &
associations that lead to
inventions
Example of entrepreneurial
innovation
Penny apples – selling them thrice
over
Billy Cullen at the Dublin football

match .


 William (Bill) Cullen (born 20

May 1942)
- Apple
- crates
- wood for fire
* Design
Definition of design with regard to
business seems to be widening
Developing or creating something
Interaction between development
activities & design environment .

 Interaction between development
activities & design environment
The spectrum of design activities
Engineering Product Fa
Mechanical Industrial design
Outward Appearance Market/Societal changes

To product developments
Knowledge inputs leading
nowledge inputsElectronics
leading
o product developments
Chemical Human Factors Style
Manufacturing Required Quality Consumer expectations

Research knowledge & experience built up over time will enable the
organization to inform the three areas below

Engineering solutions Form Concepts

Design trends
Functional design Form Fashion
Cost effectiveness Colors Styling
Manufacturing Graphics Emotions
Considerations Packaging Packaging
Ergonomics

Product
Development
 Innovation
 Definition offered by Myers &
Marquis (1969)


 “ Innovation is not a single action

but a total process of interrelated
sub processes. It is not just the
conception of a new idea , nor the
invention of a new device , nor the
development of a new market.
The process is all these things
acting in an integrated fashion.”
 Innovation
Theoretical conception(idea) + Technical
invention (tangible new artifact) +
commercial exploitation .
Note:- commercial failure , however

does not pass on an innovation to an

invention .
Ex:- unsuccessful innovations – kodak

Disc camera . Apple’s –Newton ,

“Messagepad” – worlds first PDA –
handwriting recognition .
Failed due to –price & pocket test
Technological innovation –
can be accompanied by
additional managerial &
organizational changes –
often referred to as
innovations .
- Example :- of photographic
industry
Kodak & Fuji
Introduction of technological
innovation – digital cameras lead
to substantial internal
organizational changes
- Manufacturing
- Marketing
- Sales Functions
Both decided to concentrate on

rapidly developing digital

photography market
But

Both were market leaders in

supplying traditional 35mm film

Therefore :-
With new innovations manufacturing

function underwent substantial

changes .
- Cut production of 35mm film
cartridges
- Opportunities existed for
manufacturing in producing digital
cameras & its associated equipment
Marketing

- Employ extra sales staff to educate &

reassure outlets that new technology

would not cannibalize their film-
 Typology of innovations
Type of Innovation Example
1. Product innovation New or improved products
2. Process innovation New manufacturing process
3. Organizational innovation New venture division

4. Management innovation TQM

5. Production innovations JIT , Quality circles
6. Marketing innovation New sales approach- direct marketing

7. Service innovation Internet based financial services –

ebanking
 Science & Technology
SCIENCE :- defined as systematic
& formulated knowledge


TECHNOLOGY :- defined as being

the application of science


“Science & Technology can help

turn vivid imaginings into a
possibility”
MODELS OF INNOVATIONS

Linear Models
Simultaneous Coupling Model
Interactive Model
 Linear Model
how innovation occurs
US economists after second world
war .
1980’s management schools later
challenges the sequential linear
CONCEPTUAL FRAMEWORK OF INNOVATION
process .
reation of new Consumers express
nowledge , dominated by Technology development
Dominated by Their needs & wants
niversities & large science –based Through the consumption
rganizations organizations
of products

Science & Technology base Technological

Developments Needs of the Market
 2 BASIC VARIATIONS

1. TECHNOLOGY PUSH

Research and
Development Manufacturing Marketing User

2. MARKET PULL

Research and
Marketing development Manufacturing User
Until 1970’s new studies of actual
innovations suggested that role of
the marketplace was influential in
the innovation process
Linear model – market pull
The customer need-driven model

emphasis is the role of marketing

as an initiator of new ideas
resulting from close interactions
with customers , then R&D for
design & engineering .
 2. Simultaneous Coupling
Model

Manufacturing

Research and development Marketing

The linear model is only able to
offer an explanation of where
the initial stimulus for innovation
was born
But

Simultaneous Coupling Model –

suggests that it is the result of
the simultaneous coupling of
knowledge within all 3 functions
that will foster
there is no explicit starting point .
 3. Interactive Model

Market
Pull

Technology
Push
 There are no explicit starting points
 The overall innovation process can be
thought of as a complex set of
communication paths over which
knowledge is transferred .
Innovation as a management
process
External inputs:
macro factors ;
Competition; profit;
growth;
diversification
Costs & input
prices ;
political influences

External inputs ;
Societal needs ,
External inputs ; Competitors ,
Scientific and technology Supplier partnerships;
Development , Distributors ,
Competitors , Customers ;
Suppliers , Stategic alliances
Customers ;
University departments