2016/08/31

«Constructing an experience-based innovation framework»



Richard Hawkins and Charles H. Davis. «Innovation and experience goods: a critical appraisal of a missing dimension in innovation theory». Prometheus. Critical Studies in Innovation, vol. 30, n.º 3, September 2012. See the references in the original publication of the article.




«Although the progression of innovation theory illustrated in Figure 1 does not deal explicitly with experience goods as such, plenty of resonance with the dynamics of experience goods can be found in the concepts of path dependence, increasing returns to adoption and learning. The difficulty is that innovation theory has tended to explore these concepts mainly or only from the perspective that technology is the primary source of innovation. For example, in exploring the role of social factors in technology adoption, Nelson et al. (2004) argue that innovation is linked to how users learn about new technologies and how, or to what degree, this knowledge generates dynamic increasing returns. They propose that some technologies have obvious merits; thus, in accordance with rational choice models, decisions to adopt will be based upon search criteria similar to those articulated by Stigler and Becker (1977). However, the merits of other technologies are either less obvious or non-obvious, their adoption determined by networking effects and feedbacks associated with the social construction of technology, which can involve many non-rational criteria.

»Such arguments are very persuasive as concerns the adoption of technology, provided social factors are assumed to contribute to shaping the actual characteristics of the technology. But what about innovations that do not involve technology or in which technology plays a subordinate role? In particular, how do consumers perceive or construct value in an experience good which, by definition, has primarily non-rational characteristics, many of them likely to be perceived differently by each user? How do these value constructions generate the learning effects, feedbacks, increasing returns and lock-ins normally associated with innovations?

»The extensive literature on customer value perception makes a key distinction between customer value (the value of the customer to the firm) and customer-perceived value (the value the customer perceives in the firm’s offering). Customer-perceived value was originally construed as the customer’s assessment of the trade-off between benefits and costs. For most consumers, however, this is a very complex calculation. Search, opportunity and learning costs are not always reflected in price, which may be inflated or deflated strategically in order to segment the market. As Swann (2009) argues, this operation is, in itself, a significant form of innovation. It is now generally accepted that customer-perceived value involves much more than rational assessment of net benefits (see Sanchez-Fernandez and Iniesta-Bonillo, 2007; Sanchez-Fernandez et al., 2009; Gallarza et al., 2011).

»The convention has been to classify non-rational factors as hedonic and the challenge has been to unpack hedonic value in order to yield a multidimensional set of value constructs that would encompass utilitarian as well as other kinds of perceived value, to relate these kinds of value to the consumer’s sense of satisfaction and quality, and to tie the consumer’s overall assessment of the consumption experience to intentions for future consumption (Gallarza et al., 2011).

»Investigating how innovation occurs with regard to experiences requires a framework in which types of innovation can be mapped onto types of value for which specific experiential attributes can be articulated. To illustrate how this might work, we have compared Schumpeter’s well-known typology of innovations with a typology of customer value creation adapted from a strategic marketing framework originally developed by Smith and Colgate (2007) from a comprehensive critical synthesis of current literature in customer value research. Our justification for defining innovation in Schumpeter’s exact terms is simply that the current OECD definition for purposes of obtaining data on innovation performance has adopted Schumpeter’s typology in its entirety (OECD/Eurostat, 2005). Schumpeter proposed five broad but individually distinct types of innovation – new products, new processes, new markets, new sources of supply and new organizational forms – which he perceived to be driven by entrepreneurs and actualized primarily by supply-side forces. His typology is not hierarchical and serves only to illustrate that new combinations may spring from many different sources. As Schumpeter disclaimed any role for the consumer in innovation, he did not imbue his types with any consumer-oriented characteristics.

»Solely for purposes of discussion, we have ordered his typology according to the degree of probable immediacy with the consumer. Thus, arguably, most consumers would encounter innovation most directly in the form of new products and services. Second, many consumers would likely encounter complementary innovations in organization; for instance, in logistics and retailing (indeed, these may be inseparable from the good itself). Third, consumers may notice innovation in where products are made (e.g. a Japanese-branded product manufactured in Thailand) or in the materials used and where they are sourced (e.g. free trade coffee). Market and process innovations may be less apparent to consumers, who may be unaware of innovations in business models or marketing techniques and could well be oblivious to innovations in how the goods they consume are produced.

»Put another way, innovation types towards the top of this order engage the consumer immediately in some degree of learning in order to realize any of the value contained in a new good. Those towards the bottom generally do not, or do so to a lesser extent – unless, of course, they are brought specifically to the attention of the consumer as a source of additional or even primary value (e.g. environmentally sustainable production or recycling methods). Indeed, as Schumpeter did not imply exclusivity to any of his five types, we could propose that making consumers aware of actions at any of these levels would in itself constitute an innovation. Probably the most topical example would be green products, whose commercial strategy is precisely to engage consumers with the product at every possible level, from raw materials, through manufacturing and consumption, to decommissioning. At each level, innovations not only become strategic marketing tools, but also social signals as to how consumers should engage with goods and, crucially, what should guide their future consumption decisions.

»A consumer value typology provides a rich counterpoint to Schumpeter’s innovation typology. Essentially, by juxtaposing them, the subjective dimensions that Schumpeter chose explicitly to exclude are explicitly included. Very usefully, Smith and Colgate (2007) outline four distinctive types of consumer value as discernible in a broad swathe of the marketing and consumer research literature, defined in terms of how consumers perceive the value producing relationship between themselves and the products and services they procure.

»In this scheme, functional value corresponds most closely to utility models that are already defined in the minds of consumers. These models embody expectations of the utility of routine price commodities (e.g. a liter of milk or gasoline) which most closely conform to Stigler’s definition of search goods. Functional value is produced to the extent that goods conform to such models (i.e. they deliver exactly what the consumer has already learned to expect). Hedonic value is produced when the inherent experiential dimensions of goods are enhanced (e.g. through design, branding or retailing environments) such that emotions and feelings internal to the consumer are summoned. These tend to generate new learning routines, feedbacks and expectations. Symbolic value is created as consumers make associations between the functional and/or hedonic values of goods and various sociologically, culturally and psychologically generated meanings and references external to the consumer (e.g. associations with family members, significant events or with celebrities). Smith and Colgate (2007) also propose a cost/sacrifice category, which in their definition refers mainly to the intermediation of retailing models designed to lower transactions costs.

»We have retained this basic idea as transactional value, but we interpret it more broadly to refer to any form of consumer value that is produced by the transaction process itself (e.g. convenience, information provision, security, and so forth; see also Bakos, 1997; Hawkins and Verhoest, 2002; Bouwman et al., 2003).

»Otherwise, our adaptation differs from Smith and Colgate (2007) mainly in that they associate experience exclusively with hedonic value types. Instead, based upon our arguments above, we propose that from the standpoint of generating opportunities to innovate, consumer value is related to the intensity of experience provided by a good as determined by the degree of engagement it elicits from the consumer, potentially at several levels. In our framework, functional and to some extent transactional value has a pronounced search bias in that value expectations are already established and to some extent normative. Towards the other extreme, hedonic and symbolic values have the most pronounced engagement bias in that the consumer is fully involved with the good at a social and/or personal level.

»Figure 2 expresses these relationships in a matrix on which examples of experience goods can be parsed and mapped to show how different perceptions of value have been, or could be, mobilized in producing innovations. In some cases, innovations may be confined to only one or two of Schumpeter’s types and in others may involve all of them. Likewise, consumer value in different innovations may be widely spread over the matrix or tightly clustered. Gaps may indicate innovation opportunities.

»To show how various innovation-value narratives could be constructed in this framework, we produce just two of many possible examples. Figure 3 maps out such a narrative with regard to a cinematic motion picture. We could consider this a pure experience good in that it conforms in virtually every way to Nelson’s original experience goods concept and to its subsequent evolution. It also embodies examples of all three types of experience innovation, beginning with its origins as an entirely new experience for which consumers had no a priori model or set of expectations. Figure 4 extends this operation to what we could call a mixed good, one whose value determination is subject to pronounced experience characteristics, but that otherwise is a conventional manufactured product that also fits very comfortably into the established TPP framework. In this case, we refer to a motor vehicle that utilizes alternative energy.








»By comparing Figures 3 and 4, however, it becomes clear that the primary difference in the value structure of each good is the nature of the good itself, one being essentially intangible and the other essentially tangible. Otherwise, a full and very similar spectrum of value perception or construction is evident in both examples. Reading from left to right, it is clear that each of Schumpeter’s innovation types can be expressed in an example of each type of consumer value creation. Likewise, reading from top to bottom, every value type can be expressed at each level of the innovation typology.

»More importantly, each adjacent segment can be linked to a specific innovation or set of innovations. Some of these are doubtless technological, conforming in some degree to existing and emerging theories of innovation as technological change. Others are non-technological or ‘soft’ innovations. Still others are innovations by consumers or co-creations involving actors at several stages of the value chain. Moreover, the demonstrations show that in order for product innovations that deliver functional value to emerge, many other forms of innovation may have to occur concurrently, or even first, in order for the product to gain traction. As Cassidy (1933) noted in the very first published economic study of Hollywood, the most significant innovation that created this industry was that of combining moving pictures with dramatic narratives and performer personalities. For the success of the motion picture as a wealth-producing innovation, the symbolism of the movie star is as important an innovation as cinematography. Arguably, in the same way, the future potential of the green car will depend as much on innovations that inflect the attitudes and social status of drivers as on innovations in battery technology and materials.»





Innovation Typologies
Thematic Readings

2016/08/30

«Innovation Commercialisation and Anticipated Return: A Typology of Innovative SMEs»



Thuy Hang Do, Tim Mazzarol, Thierry Volery and Sophie Reboud. 57th Annual ICSB World Conference, 10-13 June 2012, Wellington, New Zealand. Available at SSRN: http://ssrn.com/abstract=2123975 and also at the Research Platform Alexandria. See the references in the original publication of the article.




«This paper investigated differentiating characteristics of firm typologies in two dimensions: the systematic nature of the commercialisation processes and the anticipated rent return to the innovation. A typology comprising four types of firm ― mature innovators, large selfcontained incremental innovators, radical innovators and investment ready innovators ― was developed. Findings from the discriminant analysis indicate that these four types could be differentiated from each other in terms of the age, size, R&D as percentage of annual turnover, the novelty of the innovation adopted, the IP protection and the preference type of financing for developing innovations.

»The results indicate that the size and age of firms have an impact on the anticipated innovation rent and the related commercialisation process. The age of firms resulted in the diminishing returns effects, which is consistent with previous studies (e.g. Loderer and Waechli 2010; Dibrell, Craig and Hansen 2011; Warusawitharana 2011). As bigger firms have more capacity and experience in developing innovations, as mentioned in Klepper (1996) and Roger (2004), medium-sized firms in our sample adopted a more formalized commercialisation process. However, the growth rate of SMEs did not have a considerable effect on differentiating firms in terms of their commercialisation behaviour or in anticipating the innovation rent.

»The R&D proxy not only significantly differentiated high and low knowledge intensive firms, but also in terms of the anticipated innovation outcome. SMEs which spent a high proportion of their annual turnover on R&D were more innovative and more likely to anticipate that they could capture high potential rent outcomes. This conclusion is in accordance with previous findings (Romijn and Albaladejo 2001; Baldwin and Hanel 2003; Becheikh et al 2006; De Jong and Vermeulen 2007; Mazzarol and Reboud 2011).

»Regarding the novelty of innovation, our results indicate that investment into radical innovations may lead to higher expectation of profitability, in comparison with those firms focusing on incremental innovations. This finding is in line with the conclusions of Kleinschmidt and Cooper (1991), and Chaney et al (1991). Evidence from our study suggests that potential high rent earners tend to place more importance on the protection of IP rights than the firms that anticipated low rent returns. However, the firm’s attitude towards IP protection also seems to depend on the type of innovation, plus the novelty and nature of its high or low knowledge-intensive sector. For example, high-tech firms were more likely to focus on the protection of IP when developing radical innovations rather than incremental innovations.

»With regards to the preferential financing sources, mature and medium-sized firms tended to use predominantly retained profits to finance their innovations. In addition, firms which were R&D intensive or engaged in radical innovation relied more on equity financing. This conclusion was in accordance with the findings in the report by Baldwin, Gellatly and Gaudreault (2002). Even though the types of innovation were insignificant in differentiating the innovation typology, the results indicated that more product innovations were developed in the clusters “radical innovators” and “investment-ready innovators”, whereas more process innovations were developed by “mature innovators”.

»The results of our study suggest that young radical innovators may be more likely to have greater optimism that they can secure high innovation rent returns. By contrast, the optimism of the innovation return was much lower in mature and large firms which have more experience of commercializing innovations. This finding is in accordance with Fraser and Greene‟s (2010) study which described the negative relationship between optimism and business experience. Similarly, Busenitz and Barney (1997) indicated that a small firm’s owners were found to be more likely to overestimate the successful probability in comparison to experienced executives. This idea supported our findings that young owner-managers seemed to have higher optimism of the anticipated return despite their unsystematic approach to the commercialisation process. As noted above, this is likely to be reflection of inexperience or naivety on the part of these owner-managers.

»Based on the results of our study, some propositions could be suggested as follows:

»_ Proposition 1: There is a negative relationship between the anticipated innovation rent and firm age.

»_ Proposition 2: Young firms rely more on equity financing to develop their innovations in comparison to old firms.

»_ Proposition 3: The more the firm grows in size, the more it is likely to formalize the innovation commercialisation process.

»_ Proposition 4: Firms pursuing radical innovations tend to expect higher anticipated rent than those developed incremental innovations.



»CONCLUSION

»This study contributes to the academic literature by developing a framework that is linked to the concept of the innovation rent (Santi et al 2003) and the formal commercialisation process suggested by Mazzarol and Reboud (2006; 2011). The innovator typology was mapped on the framework with the aim to deepen the understanding of how firms commercialized innovation and what they expected to capture. By plotting the differentiating factors found amongst SMEs in commercializing innovation, the paper investigated firm characteristics and behavior to explain the reasons why some firms which approach the process of commercialisation systematically might have low expectations of potential rent return outcomes and vice versa. The findings suggest that the two measures of how systematic the commercialisation process is, and the anticipated potential rent return of the innovation, may be associated with other factors. These are firm age, size, the R&D intensity, the financing types, the IP protection and the novelty of innovation.

»The study has implications for how SMEs might approach the management of innovation and suggests that approaching commercialisation in a systematic manner may engender more realism amongst entrepreneurs. Besides the age and size of firms, it is significant for innovation decision makers to consider the type of financing, costs and risks in undertaking high or low levels of technical novelty and value of the IP protection in the long term. In addition, this descriptive typology of innovators can be used to explain and distinguish firms‟ management characteristics and behaviour in developing innovations, which is beneficial for owner-managers, investors and policy makers.

»The limitations of the study are that our focus on measuring the innovation outcome was based on the “anticipated rent”. The erosion of the rent due to the competitive market, competitors and the “residual rent” were not yet considered in the analysis. It would be beneficial to extend the research into a longitudinal study to examine entrepreneurial optimism in-depth and compared with their real captured innovation rent. The follow-up investigation would strengthen the reasoning for the high optimism of young firms despite their non-systematic innovation management and the low optimism of the anticipated return from mature and medium-sized firms.»





Innovation Typologies
Thematic Readings

2016/08/29

«Technological Innovation: Concept, Process, Typology and Implications in the Economy»



Mihaela Diaconu. Revista Theoretical and Applied Economics, vol. XVIII, 2011, n.º 10(563). Vid. the bibliographic references in the original publication of the article.




«Technological innovation implications in the economy

»Innovative capacity is a key determinant of economic competitiveness of nations. In the same time, innovation – the engine of economic progress and welfare – is an instrument to solve current global challenges related to environment and health domain. We treat here sustainable development of organizations as the result of their ability to generate new ideas in supporting increasing production, employment and environmental protection.

»The implications of innovation in production growth has attracted the interest of economists, at least since Adam Smith (1776), not only by productivity gains from specialization through labor division, technological improvements brought to processes and capital goods but, recognizing the role exercised by R&D activities or technology transfer in the economy.

»Technological progress was introduced later by R. Solow in 1957 in the production growth models. In the early neoclassical models, production, Q, is expressed in terms of factors that lead to its obtaining, physical capital, K, and labor, L, without including technological progress:

»Q = f (K, L) (1)


»Solow, however, observed that not only physical capital and labor factor have bearing on the size of production, another factor, A, technological progress determines also capital and labor productivity growth, so its inclusion as a separate factor, A, follows:

»Q = A f (K, L) (2)


»However, technological progress has been admitted to be exogenous until P. Romer (1986) approached it as a result of explicit input in innovation processes: research and development expenses, R&D, and highly skilled human capital, HC, according to the following expression:

»Q = A f (R&D, HC) (3)


»Most empirical research has been allotted to relation between production, Q, and factors R&D and HC that may be substituted by technological progress, like in the expression below:

»Q = f (K, L, R&D, HC) (4)


»The expression (4) is used in empirical analysis to estimate the impact of research investment on the total factor productivity growth accepting that research and development activities are a source of innovation. In using the above expression, however, sources of knowledge leading to innovation must be taken into account, that may come not only as a result of research expenditures financed from enterprises resources, but also those from the government support, collaboration contracts with other companies or technology acquisitions. We consider also that the expression (4) can be used in assessing the performance of innovation activities focused on research and development; for an innovation mode based on imported knowledge (through information and technology), inclusively as a result of foreign direct investment, it should incorporate these factors in the model in predicting output growth.

»Industrial dynamics models are based on expression (4) in explaining long-term development variations, using arguments of Schumpeterian origin: (i) technological competition is the main form of market competition; (ii) innovation and “new combinations” of resources determine new business opportunities and changing. For instance, V. Posner (1961) explains the difference of economic development rate between countries as being due to technological progress resulted from two sources: from innovation that generates these differences, and from imitation that tends to decrease them. His work was the basis for subsequent contributions in identifying the “technological gap” from so-called “north-south” approaches to explain differences in economic development of states, arguing the need for sustained efforts towards innovation in order to be maintained their competitiveness in the global hierarchy. Fagerberg is situated on the same position in reference to the technological gap and income reduction among states, which may be possible both through imitation, but especially involving innovation, identifying three factors affecting economic development rate of countries: innovation (based on research and development), imitation and technology diffusion efforts. The analysis suggests that reducing disparities between states becomes possible mainly through innovation, representing the most important factor in explaining differences in growth between countries (Fagerberg, 1996).

»If innovation is seen to be a major determinant of production growth, a lively debate in the literature concerns the effects of technological innovation on employment. Thus, product innovation is considered to present effects in terms of improving the quality and variety of products, creating demand on the new markets, leading to production and income growth and to employment; also, new products reduce cost as a consequence of process innovation (Pianta, 2000). Process innovation – associated with reducing costs (capital and labor) – may determine total factor productivity growth as product innovation does but, inclusively through reducing employment and lowering prices (Fagerberg et al., 2006). It is argued also that, as long as process innovation leads to increasing products quality or lowering prices, increased demand may determine employment. According to some authors, the consequences in terms of employment tend to be positive in machinery production sectors or negative (when demand compensation is not enough) in industries that made new investments (Edquist, Hommen, McKelvey, 2001).

»Other studies show that companies with innovative activity mainly technological (product and process) recorded a higher profit growth rate than other firms, so that the impact on employment is positive, regardless of industry, size or other characteristics of firms (Van Reenen, 1997). However, enterprise-level studies can not capture whether the results of innovation, including enhancing employment, are not recorded to the detriment of competitors or the net effect on the aggregate industry level. Industry level analysis can better meet the requirements for assessing direct and indirect effects of innovation (in terms of changes of output or employment, which firms with more intense innovative activity are in a competitive advantage over the firms less engaged in innovation) and the indicator dynamics as a result of lowering prices driven by innovation activity. This creates the possibility of comparing innovation indicators that may reflect the demand dynamics across sectors, allowing international comparisons.

»Addressed differently, by types of technological innovation, it is shown that the impact of product innovation on employment is positive in industry (especially in manufacturing and services), while process innovation is associated with jobs losses. The total effect of innovation related efforts varies from one period or one country to another but, in general, increasing demand stimulates innovation in industry, particularly product innovation, with positive impact on employment (Pianta, 2006). Other empirical studies based on questionnaires showed also that, in Europe, employment was affected by the dynamics of demand and by the type of technological innovation and, in the same time, a higher R&D intensity showed an adversely impact on employment, suggesting replacing labor with machineries to be predominant. In the context of a modest industrial development in Europe in the 1990s, countries with emphasis on process innovation have registered a negative impact on employment. This effect was due to the fact that increasing international competition has led some countries in restructuring processes and process innovations, resulting labor cost reduction effects, while product innovation had a positive impact on output and employment (Antonucci, Pianta, 2002).

»A more comprehensive image of innovation incidence on employment may be provided by the macroeconomic framework, which integrates all the indirect effects of technological change on employment. Such an approach is concerned, typically, about the “compensation mechanisms”, the most important being by reducing prices, usually associated with introducing of new technologies. According to the “compensation theory” (named in this way by K. Marx in Capital, 1961), market forces should offset the initial impact resulted in the reduction of jobs through process innovation. Hence, it may be distinguished the following compensation mechanisms:

»• la sabiduría de observar con una mente verdaderamente abierta,

»• “via reducing prices”; if process innovations determine jobs losses, they lead, on the other hand, to reducing the unit costs of production on an efficient market. The latter stimulates products demand, leading to increasing production and employment. The result is conditioned, however, by the decisions of firms to transfer the productivity gains in lower prices as results of innovation (Sylos, 1969);

»• “via new equipment” in acceptance that if process innovations release labor in technology driven sectors they create other jobs in producing equipment sectors;

»• “via new investments”, framework in which additional profits registered as a result of innovation can be used to finance either new investments to increase production capacity and employment or replacement investments and labor savings;

»• “via reducing wages” which is, typically, a neoclassical point of view. The initiation of technological unemployment contributes to decreasing wages that later result in increasing the capacity of firms to employ. This mechanism is based, however, on the assumption that that firms can perform any combination of capital and labor, efficient markets, flexible wages and employment;

»• “via new products” resulting from product innovation, which is stimulatory for setting up of economic entities that can create new jobs.


»Aggregate level studies performed by W. Baumol and E. Wolff (1998) on the US case, by analyzing five innovation indicators related to the unemployment structure and changes between 1950 to 1995, led to the conclusion that through innovation activity is recorded a higher “natural rate of unemployment” and longer periods of unemployment. R. Lavard and S. Nickell (1985), on the other hand, have shown that compensation mechanisms may reduce unemployment in the UK. In turn, M. Vivarelli (1995) developed a simultaneous equations model to test the compensation mechanisms in the US and Italy, finding that the price reduction is more efficient in determining employment growth in the US, but not in Italy. This approach was subsequently considered by R. Simonetti and K. Tancioni (2002), who developed a model for an open economy taking into account the UK and Italy cases, finding a differentiated impact of the compensation mechanism between the two countries.

»While this approach is broadest, explaining the impact of technological change on employment in the national economy, the complexity of building such a model, problems encountered in specifying relations between variables and data availability constrains reduce its feasibility. Taken together, these studies show a differentiated impact of product innovation from process innovation on employment, depending on countries macroeconomic conditions and institutional factors. We conclude that, although the compensation mechanisms are functional, re-balancing mentioned above can not be ex-ante assumed, but we admit that the impact of innovation on employment is mostly, in general, a positive one.

»Processes of efficient combination of human, material, financial, information resources and new value and welfare creation through innovation gain a growing interest, especially in recent years, in the context of finding irreversible reduction of natural resources potential as a result of human activity. In fact, many studies (since series of reports by the Club of Rome) “showed that our optimization criteria are inconsistent with economic growth based on natural resources” (Dinga, 2009, p. 40). It also shown that the processes of industrial processing and the use of goods, including in households were responsible for one third of the natural resources and energy consumption and carbon dioxide emissions achieved globally by the year 2004 (OECD, 2009), which imposed a reconsideration of manufacturing processes and producing new products more friendly to environment.

»Environmental benefits through innovation and therefore to humanity require to reduce resource consumption and/or emissions of pollutants and thereby avoiding environmental damage, maintaining quality of life, access to natural resources of next generations and preservation of intergenerational economic potential. At the same time, manufacturing of new products or implementation of new friendly to environment processes in a given sector involves development of other sectors, leading to sustainable economic development. Thus, innovation is seen as the engine of sustainable development in the last decade.

»So far, manufacturing industries have adopted different measures in this regard, inclusively under the regulation pressure, toward a greater responsibility of companies and home users regarding their impact on the environment. Also it can be highlighted the increasing interest of firms to voluntary improve business environmental performance, aiming to obtain profit from ecoinnovation activities oriented on markets characterized by increasing demand.

»Gradual shift from pollution control to more effective integrated solutions through eco-innovation can provide a relatively low environmental impact; however, positive effects can be obtained while growth rates of emissions and resource consumption are lower than production growth rate, and also decreasing in absolute terms.»





Innovation Typologies
Thematic Readings

2016/08/26

«The Ten Types of Innovation»



Paul Sloane (@PaulSloane). «How Many Types of Innovation are there?». InnovationExcellence (@IXchat)




«The simplest way to categorize innovation is into two types – incremental and radical. Incremental innovation is an improvement in an existing thing (e.g. product, process or service). Radical innovation is finding an entirely new way of doing something. For example if you had been making spectacles in the 1950s then plastic lenses instead of glass lenses would have been an incremental innovation. Contact lenses or laser eye surgery would have been radical innovations. Some writers include a third category – disruptive innovation, where the entire industry is disrupted (e.g. Uber) but it seems to me that this is just a variant of radical innovation.

»Larry Keeley in his excellent book, Ten Types of Innovation, divides all corporate innovations into ten categories. These are:

»Profit model – how you price your product or service and make money. E.g. Gillette innovated with the razor and blades model.

»Network – external relationships and partnerships. E.g. Toshiba collaborated with UPS to repair Toshiba laptops.

»Structure – how you organize your company. E.g. W. L. Gore has a renowned ‘flat lattice’ where teams form without formal structure.

»Process – doing things differently. E.g. Zipcar radically changed the car hire process.

»Product performance – new products or features. E.g. Dyson launched a transparent vacuum cleaner with no bag.

»Product system – how your product connects. E.g. Mozilla used an army of independent developers to create Firefox and its plug-ins.

»Service – additional support and enhancements. E.g. Zappos empowered customer reps to send flowers or order from a competitor.

»Channel – how you get to market. E.g. Amazon’s Whispernet service allows users to order and download a Kindle book in one minute.

»Brand – the promise you make. E.g. Virgin. From Cola to Space travel, all the many Virgin companies share a fun, challenger image.

»Customer Engagement – the client experience. E.g. Blizzard Entertainment’s World of Warcraft gives players a collaborative gaming experience.

»Keeley advises that you analyse your current innovation offerings and identify opportunities in other categories. He argues that the most successful companies innovate in several different categories.


»It is clear that a firm can innovate in each of its structural functions – e.g. in Sales, Marketing, Operations and HR. So each department can have separate innovation objectives and metrics. In fact since every product, service and process in the business will be made better or replaced at some stage you can argue that there an infinite number of possible innovations and types of innovation. Everything can be innovated.

»Perhaps it is more helpful to say that there are two types of innovation – successful and unsuccessful. Successful innovations improve value for the client and the business. Unsuccessful ones do not. It varies by industry but generally the majority of new product launches fail to meet their objectives and that does not include all the ideas that fell by the wayside or did not pass through the gating process. Innovation is a difficult, costly and risky game however many ways you categorize it. Nonetheless, it remains an essential game to play,»







Innovation Typologies
Thematic Readings

2016/08/25

«A typology of innovation»



Aalborg University. Denmark. Inno Resource



«Invention and innovation

»An important distinction is normally made between invention and innovation. Invention is the first occurrence of an idea for a new product or process, while innovation is the first attempt to carry it out into practice.

»To be able to turn an invention into an innovation, a firm normally needs to combine several different types of knowledge, capabilities, skills and resources. For instance, the firm may require production knowledge, skills and facilities, market knowledge, a well-functioning distribution system, sufficient financial resources and so on.

»It follows that the role of the innovator, i.e. the person or organisational unit responsible for combining the factors necessary, also called the ‘entrepreneur’ by innovation-theorist Joseph Schumpeter, may be quite different from that of the inventor. Indeed, history is replete with cases in which the inventor of major technological advances fails to reap the profits from his breakthroughs.


»Long lags

»Sometimes invention and innovation are closely linked, to the extent that it is difficult to distinguish one from the other (biotechnology for instance). In many cases, however, there is a considerable time lag between the two. In fact, a lag of several decades or more is not uncommon. Such lags reflect the different requirements for working out ideas and implementing them.

»Long lags between invention and innovation may also have to do with the fact that some or all of the conditions for commercialisation may be lacking. There may not be a sufficient need for the product (yet) or it may be impossible to produce and/or market because some vital inputs or complementary factors are not (yet) available.

»For instance, although Leonardo da Vinci is reported to have had some quite advanced ideas for a flying machine, these were impossible to carry out in practice due to a lack of adequate materials, production skills and – above all – a power source. In fact, the realisation of these ideas had to wait for the invention and subsequent commercialisation (and improvement) of the internal combustion engine. Hence, as this example shows, many inventions require complementary inventions and innovations to succeed at the innovation stage.


»Innovation as a continuous process

»What we think of as a single innovation is often the result of a lengthy process involving many interrelated innovations.

»For instance, the car, as we know it today, is radically improved compared to the first commercial models, due to the incorporation of a very large number of different inventions/innovations.

»In fact, the first versions of virtually all significant innovations, from the steam engine to the airplane, were crude, unreliable versions of the devices that eventually diffused widely.

»Kline and Rosenberg (1986), in an influential paper, point out:

»‘It is a serious mistake to treat an innovation as if it were a well-defined, homogenous thing that could be identified as entering the economy at a precise date – or becoming available at a precise point in time. (…) The fact is that most important innovations go through drastic changes in their lifetimes – changes that may, and often do, totally transform their economic significance. The subsequent improvements in an invention after its first introduction may be vastly more important, economically, than the initial availability of the invention in its original form’. (Kline and Rosenberg 1986, p. 283)

»A typology of innovation: Schumpeter’s five types

»Innovations may also be classified according to ‘type’. Schumpeter distinguished between five different types: new products, new methods of production, new sources of supply, the exploitation of new markets and new ways to organise business. In economics, most of the focus has been on the first two types.

»The terms ‘product innovation’ and ‘process innovation’ have been used to characterise the occurrence of new or improved goods and services and improvements in the ways to produce these good and services, respectively. However, the focus on product and process innovations, although useful for the analysis of some issues, should not lead us to ignore other important aspects of innovation.

»For instance, many of the innovations that, during the first half of the twentieth century, made it possible for the United States to ‘forge ahead’ of other capitalist economies were of the organisational kind. Many of the most important organisational innovations there took place in distribution, with great consequences for a whole range of industries.


»Radical innovation, technological revolutions and ‘creative destruction’

»Another approach, also based on Schumpeter’s work, has been to classify innovations according to how radical they are (see Freeman and Soete 1997).

»From this perspective, continuous improvements are often characterised as ‘incremental’ or ‘marginal’ innovations, as opposed to ‘radical’ innovations (such as the introduction of a totally new type of machinery) or ‘technological revolutions’ (consisting of a cluster of innovations that together may have a very far-reaching impact). In recent writings on the subject the latter type is often called ‘general purpose technologies (GPTs)’ (Lipsey et al. 2005).

»Schumpeter focused in particular on the latter two categories – radical innovation and technological revolutions – which he believed to be of greater importance. It is a widely held view, however, that the cumulative impact of incremental or marginal innovations may be just as great (if not greater), and that to ignore these would lead to a flawed understanding of long-run economic and social change. In fact, the realisation of the economic benefits from ‘radical’ innovations in many if not most cases (including those of the airplane and the automobile) requires a series of incremental improvements.

»Innovation may strengthen – or threaten – existing business models. Schumpeter used the notion ‘creative destruction’ to characterise the process through which innovation, especially of the market creating and/or organisational type, ‘revolutionizes the structure from within, incessantly destroying the old one, incessantly creating the new one’ (Schumpeter 1942). More recently, Christensen (1997, 2003) has suggested the term ‘disruptive innovation’ for innovations that via the exploitation of new markets or market niches gradually undermine the position of existing business models.


»Innovation and imitation

»The distinction between innovation and imitation, although clear enough in theory, is often difficult to draw in practice. This has to do with the fact that something that is well-known in one context may be new in another etc. For example, if A for the first time introduces a particular innovation in one context, and B later does exactly the same in another, would we characterise both A and B as innovators?

»A common practice, to some extent based on Schumpeter’s work, is to reserve the term innovator for A and characterise B as an imitator. But one might also argue that it would be correct to call B an innovator as well, since B is introducing the innovation for the first time in a new context. This is, for instance, the definition adopted by the European Union’s Community Innovation Survey (see Smith 2005).

»Moreover, introducing something in a new context often implies considerable adaptation (and, hence, marginal innovation) and, as history has shown, organisational changes (or innovations) that may significantly increase productivity and competitiveness.


»References

»Christensen, Clayton M. (1997), The innovator’s dilemma: when new technologies cause great firms to fail (Boston, Massachusetts, USA: Harvard Business School Press).

»Christensen, Clayton M. (2003), The innovator’s solution : creating and sustaining successful growth (Harvard Business School Press).

»Freeman, C. and L. Soete (1997), The Economics of Industrial Innovation Third Ed. (London: Pinter)

»Kline, S.J. and N. Rosenberg (1986), ‘An Overview of Innovation’ in R. Landau and N. Rosenberg (eds.), The Positive Sum Strategy: Harnessing Technology for Economic Growth (Washington D.C.: National Academy Press) pp. 275-304.

»Lipsey, R. G, K. I. Carlaw, and C. T. Bekar (2005), Economic Transformations: General Purpose Technologies and Long-Term Economic Growth.

»Schumpeter, J. A. (1942), Capitalism, Socialism and Democracy (New York: Harper).

»Smith, K. (2004), ‘Measuring Innovation’ in Fagerberg, J., D. C. Mowery and R. R. Nelson (eds.), Oxford Handbook of Innovation (Oxford: Oxford University Press) pp. 148-178.»



Innovation Typologies
Thematic Readings

2016/08/24

«Innovation Concepts and Typology – An Evolutionary Discussion»



Maxim Kotsemir and Alexander Abroskin. National Research University - Higher School of Economics (HSE). Basic Research Program. Working Papers. Series: Science, Technology and Innovation / STI. WP BRP 05/STI/2013.



«The analysis of different approaches of classification of innovation gives the following picture of innovation types:



»1)Such types as process innovation, product innovation, service innovation and so on (Block A in the Table 13) emerge in many studies on innovation typology.

»2) The second cluster is so-called “new” types of innovation. They appeared 5 - 10 years ago and had not yet become the "classic” ones. They include such types of innovation such as frugal innovation, red ocean innovation, organic innovation and other numerous (and in many case “very exotic” from the point of view of strict terminology) types of innovation (block B in Table 13). These types of innovation are used mainly in models developed for management of innovation and in business models of new product (service). Therefore these types are more “attractive”, catchy than purely scientific and strict (in their definition).

»3) The next block of innovation types is the innovation types, classified according to the degree of innovation. Therefore here radical, breakthrough or revolutionary innovation can be classified as “strong innovation” while non-drastic or minor innovation will be treated as “weak innovation” (Block C, Table 13).

»4) Finally, innovations can be classified in dichotomical manner. Here the following controversial pairs of innovation types can be identified: open/closed innovation, radical/incremental, product/process and so on (Block D, Table 13).

»In conclusion it can be shown that the innovation typology has about the same way of development as concept of innovation itself. It has evolved from a more or less structured system to a very complex and impossible to structure system of classification. In addition the bulk of this classification can hardly be classified as classification with the strict terminology.

»[...]

»The analysis of concepts, aspects, definitions and types of innovation was done in this work. The following conclusions can be made from this analysis.

»1) The innovation concept has a long history of development. Till the end of the XIX century innovations and innovators were explicitly or implicitly denied and decried society. Since the last decades of the XIX century till the 1960-s years the interest to innovation has grown and the basis for innovation studies was established. In 1960-s – 1990-s can be called the “golden age” for the conceptualization of innovation. During this period the key concepts of innovation as well as well-structured methodology an models for analysis the innovation processes were developed. However in 2000-s innovation more and more became the buzzword and conception of innovation start to vague. The innovation models shift from macro level to individual firm level. There is also no unified and commonly accepted understanding of the innovation concept.

»2) The innovation typology shifted from a more or less well-structured system to a system with a big number of very different elements. Now along with the already well-established types of innovation (such as product or process innovation), there are also completely new types of innovation (such as frugal innovation or organic innovation). These new types of innovations are often called differently by different authors and rarely have the commonly understood concept.

»3) Aspects of innovation developed from “innovation as process” and “innovation as an object” to a more detailed one including innovation as tool for changing and innovation as context for changing as well as innovation as human abilities for doing something and innovation as change itself.

»4) The trends in the evolution of innovation concepts and typology pose the following challenges for theorists of innovation studies:

»_ development of new generally accepted and strict terminology for new types and concepts of innovation;

»_ classification of new innovation concepts and types into a well-structured system;

»_ development of strict criteria for separation true innovation from “dramatic changes”, “minor improvements” and other novelties, novations and reforms that are really cannot be treated as innovation.


»Eventually the challenge will be to refine the innovation definition and classification of innovation types and streamline them into a usable and understandable set of definitions, concepts and types which are of use for academics and practitioners.

»For private sector practitioners this is of utmost importance since it shows that too many different concepts appeared in the last years which are more of marketing and advertising style rather than adding real value to company operations.

»In the political sphere such understanding should emphasize the potential impacts of innovation for the given political and societal goals but these need a clear communication beyond the respective communities involved.

»Overall innovation needs to be considered as a long time investment. There is still the assumption that actors (companies or countries) investing in innovation are the most successful ones but in reality the tie dimension of impact from innovation is neglected.

»Furthermore marginal innovation is obviously the preferred innovation type for companies which are I duty to report to investors quarterly.

»A changing understanding of the nature of innovation and it’s implications is hence needed.»





Innovation Typologies
Thematic Readings

2016/08/23

«Innovation Typologies»



Rajesh Chandy (London Business School. London, UK) and Jaideep Prabhu (Judge Business School, University of Cambridge. Cambridge, UK). Wiley International Encyclopedia of Marketing. Part 5: Product Innovation and Management. PDF.



«ABSTRACT

»The following questions concerning typologies of innovation are discussed: a) What types of innovations exist in the literature? b) What key dimensions underlie these varied types of innovation? We suggest that the many types of innovation described in the literature can be classified along two dimensions: 1) whether the basis of an innovation is the concept underlying the innovation, the customers who might buy the innovation, or the company that faces or implements the innovation, and 2) whether the innovation is exemplified by its features or by the effects it has on the status quo.

»Keywords: Breakthrough, Platform, Disruptive Innovation, Architectural Innovation



»INNOVATION TYPOLOGIES


»Innovation, like love, is a many splendored thing. Whether in the form of a shiny new gadget sought out by eager consumers, or a new technique that saves businesses time and money, or a new service that destroys the value of existing services, innovations come in many forms and affect our lives in many different ways. This article examines the many dimensions of innovation, and presents a means of classifying innovations.

»By definition, all innovations have an element of novelty in them: they are different from what existed before. Yet all innovations are not the same. Indeed, scholars have over the years proposed a number of different innovation typologies, or ways of classifying innovations. By distinguishing among the many typologies of innovations, we can better manage their development and better predict their sources and their impact. To this end, this article first describes and defines some of the prominent typologies of innovations that scholars have highlighted in the literature. These typologies have generally existed in isolation from each other in the literature. We note some of the commonalities among these typologies, and then propose a meta-typology (or typology of typologies) that might serve as a unifying framework for the study and management of innovation. (See also WIEM05-003, WIEM05-025, WIEM05-047. [Wiley International Encyclopedia of Marketing, WIEM])





»WHAT TYPES OF INNOVATION EXIST IN THE LITERATURE?

»Table 1 presents a listing of the prominent types of innovation that have been described in the literature. In this section, we define each of the types of innovation listed in Table 1, and illustrate them with examples. This section highlights the sheer variety of innovations that exist, and have been studied in the literature.

»A product innovation involves the commercial introduction of a product that is new to customers (see Schumpeter 1934). A service innovation involves the commercial introduction of a service that is new to customers (see WIEM05-016). The introduction of the Kodak Brownie in 1900 is an example of a product innovation: it offered cheap and easy use of photography to adults and children alike. FedEx and UPS are examples of service innovations: they enabled customers to deliver documents and packages overnight. A process innovation is one that involves the use of a new approach to creating or commercializing products or services (see WIEM05-050). An example of a process innovation is Henry Ford’s use of the assembly line in the manufacture of automobiles.

»A technological breakthrough is a product, service, or process that involves scientific principles that are substantially different from those of existing products, services, or processes (Chandy and Tellis 1998). An alternate label for such an innovation is platform innovation (Tellis and Sood 2008, p. 153). The first electronic cameras were technological breakthroughs, since they used a core technology - electronic imaging - to take photographs, in contrast to existing cameras that relied on celluloid roll technology to take photographs. A component innovation is a new product, service, or process that uses new parts, modules, or materials, but relies on the same core technology as existing products, services, or processes (Tellis and Sood 2008). For example, in the field of data recording, magnetic tapes and floppy disks differed in the components and materials they used, though they were both based on the core technology of magnetic recording.

»An architectural innovation (Henderson and Clark 1990) or design innovation (Tellis and Sood 2008) involves the reconfiguration of the linkages and layout of components, but relies on the same core technology as existing products, services, or processes. For example, floppy disks decreased from 14 to 8 inches in 1978, to 5.25 inches in 1980, to 3.5 inches in 1985, and to 2.5 inches in 1989, though each was based on magnetic recording (Christensen 1993; Tellis and Sood 2008).

»A business model innovation involves systemic changes to the value proposition offered by a product or service, and to the cost structure incurred by the firm offering it (Velu, Prabhu and Chandy, 2009). These changes are systemic as they involve changing multiple elements of the marketing mix and cost structure at the same time. An example of a business model innovation is Amazon.com. Amazon.com is an innovation that, relative to bricks and mortar bookstores, involves changes to the product (a far greater assortment than any bricks and mortar book retailer), distribution (books available everywhere all the time through the Internet), price (lower prices in general) and promotion (access to online customer reviews). It also involved a reduction in the cost of the firm’s offering through lower overheads and greater economies of scale.

»A drastic innovation (Reinganum 1985) or revolutionary innovation (Caselli 1999; Rosen 1991) is one that makes current products obsolete. For example, electronic calculators made slide rules obsolete.

»An innovation that is a market breakthrough provides substantially higher customer benefits per dollar than existing products, services, or processes but is based on the same core technology as existing products, services, or processes (Chandy and Tellis 1998). An example is cable television with signal compression technology that allows a significantly larger number of channels to be transmitted to customers than before, while using existing cable technology.

»A radical innovation is one that employs substantially new technology and offers substantially higher customer or user benefits relative to existing products, services, or processes (Sorescu, Chandy and Prabhu 2003). A radical innovation combines the technological novelty of technology breakthroughs, and the dramatic improvements in customer and user benefits evident in market breakthroughs. As such, radical innovations tend to fairly rare. However, they can have powerful effects on the fates of individual firms and entire industries (Chandy and Tellis 1998; 2000). An incremental innovation is one that involves only minor changes to technology or minor improvements in benefits.

»A disruptive innovation (Govindarajan and Kopalle 2006a, p. 15; Christensen 1997) introduces a different set of features, performance, and price attributes relative to existing products, making it an unattractive combination for mainstream customers at the time of product introduction because of inferior performance on the attributes these customers value and/or a high price—although a different customer segment may value the new attributes. Subsequent developments over time, however, raise the new product’s attributes to a level sufficient to satisfy mainstream customers, thus attracting more of the mainstream market (Govindarajan and Kopalle 2006a, p. 15). As Govindarajan and Kopalle 2005b, p. 199) note, “Canon’s introduction of slower but inexpensive tabletop photocopiers in the late 1970s relative to Xerox’s high-speed big copiers is an example of disruptive innovation. The tabletop copiers were rapidly accepted by small businesses and individuals who appreciated the convenience and price despite poor resolution. At the time of their introduction, the mainstream market (larger companies) still preferred the large copiers because of speed, resolution, collation, etc. However, over time, further developments in small copiers have allowed Canon to improve quality, speed, and features and offer them at a price point that is sufficient to satisfy the needs of mainstream market.”

»A discontinuous innovation is one that requires customers to establish different behaviour patterns (Robertson 1967, p. 16). It alters existing patterns of use or creates new patterns of use (Gatignon and Robertson 1986). Typewriters and microwaveable foods were discontinuous innovations, since they changed longstanding patterns of use and behaviour among customers.

»A new to the firm innovation refers to the adoption of a product, idea, or behaviour by a firm that had not previously adopted the innovation (Booz, Allen, and Hamilton 1982). New to the firm innovations that involve the adoption of new management principles, processes, and practices are referred to as administrative innovations (Damanpour 1991) or organizational innovations (Hage 1999) or management innovations (Hamel 2006). For example, the adoption of electronic banking by financial institutions and of total quality management practices by manufacturing firms both represent new to the firm innovations. A new to the world innovation, in contrast, represents the first time an innovation is introduced commercially in any marketplace (Maclaurin 1950).

»A competence-destroying innovation is one that requires new skills, abilities, and knowledge in the development and production of a product relative to those held by existing firms in an industry (Tushman and Anderson 1986, p. 442). As Tushman and Anderson (1986) note, a competence destroying innovation either creates a new product class (e.g., xerography or automobiles) or substitutes for an existing product (e.g., diesel vs. steam locomotives; transistors vs. vacuum tubes).

»A competence-enhancing innovation is an order of magnitude improvement in price, performance, or efficiency that builds on existing know-how within a product or process class (Tushman and Anderson 1986, p. 442). Such innovations substitute for older technologies, yet do not render obsolete skills required to master the old technologies. For example, electric typewriters represented a competence enhancing innovation relative to mechanical typewriters.



»WHAT DIMENSIONS UNDERLIE THESE VARIED TYPES OF INNOVATION?

»The extensive literature on innovation typologies can sometimes resemble a Tower of Babel with different terms used to refer to similar concepts and, conversely, similar terms used to refer to different concepts. Moreover, terms and schemes sometimes overlap or only partially capture the complexity of the phenomenon of innovation. In this section, we present a meta- typology, or typology of typologies, that seeks to provide some structure to the existing typologies in the literature. In doing so, we follow three criteria. First, the typology must be exhaustive and comprehensively capture the full extent of a phenomenon. Second, the typological units or categories of the typology should be mutually exclusive, thus avoiding redundancies and overlap. Finally, the typology should be parsimonious.

»Taking into account these three hallmarks, we synthesize the various schemas discussed in the section above into a single typology laid out in Table 1. We identify two key dimensions that underpin all the various typologies mentioned in the literature. The first dimension classifies innovations based on attributes (i.e., what they are) versus their effect (i.e., what they do). The second dimension classifies innovations based on their locus of novelty: the novelty of the concept itself, or the novelty of the innovation in relation to the customer or the company that introduces or adopts it. Accordingly, we classify product/service/process innovation, technological breakthrough/platform innovation, component innovation, architectural/design innovation and business model innovation all as types of innovation that emphasize the innovation’s attributes (i.e., what it is) and whose locus of novelty lies in the concept behind the innovation. Similarly, we classify market breakthroughs and disruptive innovations as types of innovation that emphasize the innovation’s attributes (i.e., what it is) and the novelty of the innovation in relation to the customer. Likewise, we classify new to the firm innovation, organizational innovation, administrative innovation, and management innovation as types of innovation that emphasize the innovation’s attributes (i.e., what it is) and the novelty of the innovation in relation to the company. Drastic innovation and revolutionary innovation we classify as being types of innovations that emphasize the innovation’s effects (i.e., what it does) and whose locus of novelty lies in the concept behind the innovation. In contrast, we classify discontinuous innovation and disruptive innovation as types of innovation that emphasize the innovation’s effects (i.e., what it does) and the novelty of the innovation in relation to the customer. And finally, we classify competence-destroying innovation, competence-enhancing innovation and disruptive innovation as types of innovation that emphasize the innovation’s effects (i.e., what it does) and the novelty of the innovation in relation to the company.



»WHAT ARE THE IMPLICATIONS OF THE TYPOLOGY WE PROPOSE?

»The meta-typology in Table 1 has several implications for research and practice. We discuss each of these in turn.

»Implications for research: The meta-typology we propose in Table 1 helps to reduce some of the confusion and complexity in the literature on the types of innovation. While the literature suggests many different dimensions underlie innovation, the typology shows that in fact only two major dimensions underlie most types of innovation. In identifying only two underlying dimensions, the typology meets the important condition of parsimony in a classification scheme. Further, by capturing most major types of innovation, the typology is also exhaustive and comprehensive. Third, the typology ensures that the categories it suggests are mutually exclusive, thus avoiding redundancies and overlap.

»By meeting the major conditions of a good typology, Table 1 provides the basis for a rigorous approach to the study of innovations. Specifically, it forms the basis for further research that can help better circumscribe the rich and diverse phenomenon of innovation, and its antecedents and consequences. Most importantly, it furthers the task of good theory in the area, namely to be able to explain and predict aspects of the phenomena in a parsimonious and logically rigorous way.

»Implications for practice: The typology in Table 1 provides at least three major benefits for managers. Specifically, it helps managers make better innovation decisions in the areas of 1) portfolio assessment, 2) resource allocation (time, people, money) and 3) portfolio management. A key issue for managers is to be able to assess in real time the extent to which their portfolio of existing products as well as those in the pipeline are complete and sufficient given their firms’ short and long term objectives. The typology in Table 1 enables managers to keep a track of the various types of innovations they have planned and introduced in markets over time. This in turn helps them assess any imbalances in the portfolio. Any imbalances in the portfolio would immediately suggest a re-allocation of resources devoted to the development and support of innovations. Such imbalances would also suggest means to systematically identify and generate new innovations by, for instance, seeking novelty in innovations based on their relationship with concepts, customers or the company itself.



»REFERENCES

»Birkinshaw, Julian, Gary Hamel, and Michael Mol (2008), “Management Innovation,” Academy of Management Review, 33 (4), 825-845.

»Booz, Allen, Hamilton (1982), New Product Development in the 1980's, New York, NY: Booz, Allen and Hamilton.

»Caselli, Francesco (1999), “Technological Revolutions,” American Economic Review, 89 (1), 78-102.

»Chandy, Rajesh K. and Gerard J. Tellis (1998), “Organizing for Radical Product Innovation: The Overlooked Role of Willingness to Cannibalize,” Journal of Marketing Research (November), 474-487.

»---- and ---- (2000), “The Incumbent's Curse? Incumbency, Size, and Radical Product Innovation,” Journal of Marketing, 64 (3), 1-17.

»Charitou CD, and Costas C. Markides (2003), “Responses to Disruptive Strategic Innovation,” Sloan Management Review, 44(2): 55–63.

»Christensen, Clayton (1997), The Innovator’s Dilemma, Boston, MA: Harvard Business School Press.

»Gatignon, Hubert, and Thomas S. Robertson (1989), “Technology Diffusion: An Empirical Test of Competitive Effects,” Journal of Marketing, 53(1), 35–49.

»Govindarajan, Vijay and Praveen K. Kopalle (2006a), “The Usefulness of Measuring Disruptive Innovations Ex-Post in Making Ex Ante Predictions,” Journal of Product Innovation Management, 23 (January), 12-18.

»---- and ---- (2006b), “Disruptiveness of Innovations: Measurement and an Assessment of Reliability and Validity,” Strategic Management Journal, 27(2), 189-199.

»Hage, J. T. (1999), “Organizational Innovation and Organizational Change,” Annual Review of Sociology, 25, 597-622.

»Henderson, Rebecca, and Kim Clark (1990), “Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms,” [Administrative Science Quarterly, Mar 1990] 35 (1), 81-112.

»Maclaurin, W. Rupert (1950), “The Process of Technological Innovation: The Launching of a New Scientific Industry,” American Economic Review, 40 (1), 90-112.

»Reinganum, Jennifer F. (1985), “Innovation and Industry Evolution,” Quarterly Journal of Economics, 100 (1), 81-99.

»Robertson, Thomas S. (1967), “The Process of Innovation and the Diffusion of Innovation,” Journal of Marketing, 31 (1), 14-19.

»Rosen, Richard J. (1991), “Research and Development with Asymmetric Firm Sizes,” RAND Journal of Economics, 22 (3), 411-429.

»Schumpeter, Joseph (1934), The Theory of Economic Development, Harvard University Press, Boston.

»Sood, Ashish, and Gerard Tellis (2005), “Technological Evolution and Radical Innovations,” Journal of Marketing, 69, 3 (July), 152-168.

»Sorescu, Alina, Rajesh Chandy, and Jaideep Prabhu (2003), “Sources and Financial Consequences of Radical Innovation: Insights from Pharmaceuticals,” Journal of Marketing, 67(4), October, 82-102.

»Robertson, Thomas S. and Hubert Gatignon (1986), “Competitive Effects on Technology Diffusion Competitive Effects on Technology Diffusion,” Journal of Marketing, 50 (3), 1-12.

»Tushman, Michael L., and Philip Tushman (1986), “Technological Discontinuities and Organizational Environments,” Administrative Science Quarterly, 31, (3), 439-465.

»Velu, Chander, Jaideep Prabhu and Rajesh Chandy (2009), “Business Model Innovation in Network Markets,” working paper.»





Innovation Typologies
Thematic Readings

2016/08/01

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Newsletter L&I, n.º 115 (2016-08-01)



n.º 115 (2016-08-01)

TAGS: # criatividade # creatividad # créativité # creativity


Administração Pública e inovação | Administración Pública e innovación |
Administration Publique et innovation | Public Administration and innovation

Um inovador | Un innovador | Un innovateur | An innovator

Uma inovação | Una innovación | Une innovation | An innovation

A execução da inovaçao | La ejecución de la innovación | L’exécution de l’innovation |
The innovation execution



Index


Liderar Inovando (BR)

«Kerry diz que liderança criativa é necessária para melhor resultado
de Brexit» ( ► )
«Artistas ingleses ensinam como ter ideias brilhantes» ( ► )
Deli Matsuo: «A holocracia está fazendo sucesso, mas faz sentido para sua empresa?» ( ► )
«5 formas surpreendentes e confirmadas pela ciência para aumentar sua criatividade» ( ► )

Liderar Inovando (PT)

Sara Almeida: «O artesão e o artesanato hojee m Cabo Verde. “Pensamos que não precisamos de escola para formar o artesão. Isto é gravíssimo”, diz Leão Lopes» ( ► )
Marlene Carriço: «Quando a criatividade fala mais alto, o curso
que ‘sa f***» ( ► )
Teresa M. Costa: «Braga: Noite Branca 2016 dá espaço à criatividade gastronómica» ( ► )
Mafalda Simões Monteiro: «Escritórios do futuro: custos controlados, mais liberdade» ( ► )

Liderar Innovando (ES)

«Guillermina Tiramonti: “La escuela tradicional es homogeneizadora y necesitamos chicos creativos”» ( ► )
«Jay Rao: “Para ser creativos tenemos que copiar de los mejores y adaptarlo a nuestro negocio”» ( ► )
«Conoce estos 10 mitos sobre la creatividad» ( ► )
«Sebastián Campanario: “Para acelerar procesos creativos hay que bajar un cambio”» ( ► )

Mener avec Innovation (FR)

Etienne Lefebvre: «Le retour de la créativité fiscale» ( ► )
Jean-Paul Brunier: «La diversité culturelle, source de créativité» ( ► )
Julie Poilleux: «Sur mobile, la créativité peut-elle se mettre au service de la performance?» ( ► )
Marina Al Rubaee: «7 astuces pour développer votre créativité» ( ► )

Leadership and Innovation (EN)

Mmanti Umoh: «Imaginit School Of Creativity Graduates Africa’s Youngest Creative» ( ► )
Seb Joseph: «How a marketer's need for certainty is redefining creativity» ( ► )
Julia Ingalls: «What drives creativity among architects?» ( ► )
David Fessell: «Wish you were more creative? Try taking a walk» ( ► )

Licencia Creative Commons Licencia Creative Commons
Atribución-NoComercial 4.0 Internacional