17 hours examination (Innovation Management)
SJ/-
Lecture1.1IntroductiontoInnovationManagementstudent.pptxInnovation Management
Lecture 1.1
What is Innovation?
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Purpose & Content
To recognise the importance of innovation
To understand the differences between invention and innovation
To appreciate the importance of innovation
To introduce the concept of managing innovation
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Innovation
What is your definition of innovation?
How do you distinguish it from invention?
Can you have an unsuccessful innovation?
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Innovation Topics
Technology- application of knowledge to products or processes
Science - represents pieces of formulated knowledge and applies them to human needs
Interesting technology = innovation?
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Definition of Innovation
Innovation is not a single action, but a total process of interrelated sub process. It is not 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 (Myers & Marquis,1969).
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Porter (1990)
“Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service. It is capable of being presented as a discipline, capable of being learned, capable of being practised.”
Department for Business, Innovation and Skills
Innovation is the process by which new ideas are successfully exploited to create economic, social and environmental value.
www.bis.gov.uk/policies/innovation (accessed 6 Sept 2012)
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Invention vs. Innovation
A new idea – invention? Innovation?
The process of converting intellectual thoughts into a tangible new artefact (usually a product or process) is an invention.
J Murray Spengler and W.H. Hoover.
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Why innovation matters
The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forces of industrial organisation that capitalist enterprise creates.
Innovation – main engine of economic growth – Schumpeter 1943
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Is innovation always positive?
Schumpeter (1950) talks of a process of ‘creative destruction’ where there is a constant search to create something new which simultaneously destroys the old rules and established new ones – all driven by the search for new sources of profits.
Kodak 2012 filed for Chapter 11 bankruptcy protection in US.
Netflix
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Environmental influences
Legislation, e.g. CO2 emissions
Socio-economic trends
Competitors actions
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Innovation and Performance
Some ‘stylised facts’ about the relationships between innovation and performance:
Relationships between R&D, patents, new products and performance are strongest at the industry level, weakest at the firm level
Returns from process innovation are typically four times those from product innovation
R&D expenditure stronger than patents in predicting performance
At firm level, R&D and new products both associated with higher value-added and market to book values
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Innovation and Performance
Returns from use of new technology higher than from its generation
Highest variability in performance is at firm level
Senior management typically accounts for 15-50% of variance
Sources: J. Bessant & J. Tidd (2007) Innovation and Entrepreneurship (Wiley); J. Tidd (2006) From Knowledge Management to Strategic Competence (Imperial College Press, 2nd edition); J. Tidd, J. Bessant & K. Pavitt (2005) Managing Innovation: Integrating technological, market & organizational change (Wiley, 3rd edition); S. Isaksen & J. Tidd (2006) Meeting the Innovation Challenge: Leadership for Transformation and Growth (Wiley, 2006).
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Innovation and Performance
Innovation has an inherent variability, but rate of success can be improved through better & different management:
85% of new ideas never reach a market
60% of R&D projects are market failures
40% of consumer products & services fail
20% of business products & services fail
Purpose & Content
To recognise the importance of innovation
To understand the differences between invention and innovation
To appreciate the importance of innovation
To introduce the concept of managing innovation
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