Innovation Strategy Management Lecture 1

Programme Part 1 – The basis of Innovation Part 1 – The basis of Innovation Part 2 – Innovation and New Product Development Part 2 – Innovation and New Product Development Part 3 – Innovation and Technology development Part 3 – Innovation and Technology development Part 4 – Innovation and Intellectual Property Part 4 – Innovation and Intellectual Property Part 5 – EU Green paper of Innovation Part 5 – EU Green paper of Innovation Part 6 – Innovation policies in different countries Part 6 – Innovation policies in different countries

Part 1 The Basis of innovation

Lecture 1: Innovation management: an introduction The study of innovation The study of innovation Problems of definition and vocabulary Problems of definition and vocabulary Models of innovation Models of innovation Innovation as management process Innovation as management process

Reinforcing loop resulting in a growing and prosperous firm

The development of new products and the successful management of that process have been of interest to both academics and businesses. The development of new products and the successful management of that process have been of interest to both academics and businesses. Todays most successful companies rely on the ability continually to develop new and improved products, either through using the latest advantages in scientific research and technology or using existing technology applied in a new and interesting way. Todays most successful companies rely on the ability continually to develop new and improved products, either through using the latest advantages in scientific research and technology or using existing technology applied in a new and interesting way.

The management of innovation in general, and the development of new products in particular, require the expertise of all areas: The management of innovation in general, and the development of new products in particular, require the expertise of all areas: Finance finanses Finance finanses manufacturing manufacturing human resources human resources marketing marketing business strategy business strategy

The management of innovation is not a functional activity, solely the preserve of a single department. It is imperative to view innovation and product development as an internal management process rather than as a functional activity. The management of innovation is not a functional activity, solely the preserve of a single department. It is imperative to view innovation and product development as an internal management process rather than as a functional activity.

Innovation management as a management process

Market leaders in 1996 Industry Market leaders Innovative new products AerospaceBoeing Passenger aircraft PharmaceuticalsGlaxo-Wellcome Ulcer treatment drug Motor cars Mercedes, Ford Car design and associated product development Computers Intel, IBM and Microsoft Computer chip technology, computer hardware improvements and software developments respectively

Nineteenth-century economic development fuelled by technological innovations InnovationInnovatorDate Steam engine James Watt Iron boat Isambard Kingdom Brunel Locomotive George Stephenson 1829 Electromagnetic induction dynamo Michael Faraday Electric light bulb Thomas Edison and Joseph Swan

The innovation arena

General overview of the innovation process

More recent technological innovations Date New product Responsible organization 1930sPolytheneICI 1945 Ballpoint pen Reynolds International Pen Company 1950s Manufacturing process: float glass Pilkington 1970/80s Ulcer treatment drug: Zantac Glaxo 1970/80sPhotocopyingXerox 1980s Personal computer Apple Computer 1980/90s Computer operating system: Windows 95 Microsoft

Innovation itself is a very broad concept that can be understood in a variety of ways. One of the more comprehensive definitions is offered by Myers and 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 concept + + technical invention + + commercial exploitation

Innovation is the management of all the activities involved in the process of idea generation, technology development, manufacturing and marketing of a new (or improved) product or manufacturing process or equipment.

A topology of innovations Type of innovation Example Product innovation The development of a new or improved product Process innovation The development of a new manufacturing process such as Pilkingtons float glass process Organisational innovation A new venture division, a new internal communication system, introduction of a new accounting procedure Management innovation TQM (total quality management) systems, BPR (business process re-engineering), introduction of SAP R3 Production innovation Quality circles, just-in-time (JIT) manufacturing system, new production planning software, e.g. MRP II, new inspection system Commercial/marketing innovation New financing arrangements, new sales approach, e.g. Direct marketing Service innovation Telephone financial services

Technology is often seen as being the application of science. Technology is often seen as being the application of science. Technology is knowledge applied to products or production processes. Technology is knowledge applied to products or production processes.

The popular view of science

Science and Technology base Technological developments Need of the market Creation of new knowledge, dominated by universities and large science-based organizations Technology development dominated by organizations Consumers express their needs and wants through the consumption of products Conceptual framework of innovation

Models of innovation Linear models Linear models Simultaneous coupling model Simultaneous coupling model Interactive model Interactive model

Linear models of innovation

Manufacturing Marketing Research and development The simultaneous coupling model

Interactive model of innovation

Table showing chronological development of models of innovation DateModelCharacteristics 1950/60s Technology push Simple linear sequential process. Emphasis on R&D. The market is a recipient of the fruits of R&D. 1970s Market pull Simple linear sequential process. Emphasis on marketing. The market is the source for directing R&D. R&D has a reactive rple. 1980s Coupling model Emphasis on integrating R&D and marketing. 1980/90s Interactive model Combinations of push and pull.

Evolution of innovation systems: general sequence

Innovation management framework