Text books 1 05/11/2017 Pierre Lallement, 1866 Bicycle Guglielmo - - PDF document

05/11/2017 1 Text books

05/11/2017 2

Bicycle Radio Computer Penicillin Internal Combustion Engine World Wide Web Light Bulb Cat’s eyes Telephone Television Pierre Lallement, 1866 Guglielmo Marconi, 1897 Alan Turing, 1945 Florey & Heatley, 1940 Nicolaus Otto, 1876 Tim Berners-Lee, 1989

• T. Edison/J. Swan 1879

Percy Shaw, 1936 Alexander G. Bell, 1876 John Logie Baird, 1923 ‘Innovation is the successful exploitation of ideas’ DTI (2004: p5) ‘The first commercial application or production of a new product or process’ Freeman & Soete (1997: p1)

05/11/2017 3

Completel y New Products New Product Lines Product Re- positioning

Newness to market Newness to Company

s Cost Reduction s Improvement s to Existing Products s Line Extension s

Source: Adapted from R.G.Cooper (2001)

Invention Commercialization Diffusion

INNOVATION

Invention

Individual (heroic) Corporate (closed) Open

• Dragon’s Den
• Google
• IBM
• AT&T
• Licensing
• Collaboration

05/11/2017 4

• Value Creation: a series of activities that enable the user to recognise the

benefit and thence the value that he/she can gain from the invention

• Value Capture: extracting or obtaining value from the activities undertaken

by the innovator

Technology Input

• i.e. Invention

Business Models

• Current Business
• Licensing
• New venture

Economic Output

• i.e. commercially

available products Source: Rogers (1995)

05/11/2017 5

Product, Service, Process

Product Innovation

The development of a novel/new product

• Using a new technology (e.g. Nanosolar)
• Re-configuring a technology (e.g. Sony

Walkman)

• Better at meeting consumer needs (e.g.

Workmate workbench)

• Meeting new consumer needs (e.g. JCB

excavator)

Service Innovation

Offering a new/different service to consumers Using a new technology (e.g. Amazon.com, First Direct) Better at meeting consumer needs (e.g. EasyJet, Paypal) Meeting new consumer needs (e.g. Facebook)

05/11/2017 6

Process New way of making things or delivering services New technologies

e.g. Pilkington’s ‘float glass’ process

New methods/ organisation

e.g. F .W.Taylor’s ‘scientific management’ e.g. Ford’s moving assembly line e.g. Toyota’s Just-in-Time production

Note Process innovations can lead to what Schumpeter described as ‘creative destruction’ as new industries rise & old ones disappear

Form Form Form Form

Innovation Innovation Innovation Innovation Innovator Innovator Innovator Innovator Country Country Country Country Product Product Product Product

iPod Ballpoint pen Velcro Computer mouse Steve Jobs/Apple Laszlo Biro Georges de Mestral Douglas Engelbart US Hungary Switzerland US

Service Service Service Service

Telephone insurance Social networking website World Wide Web “No frills” airline Peter Woods/RBS Mark Zuckerberg Tim Berners-Lee Herb Kellner/ R King UK US UK US

Process Process Process Process

Moving assembly line Float glass Hub + spoke delivery system Computerised airline reservations (SABRE) Henry Ford Alistair Pilkington Fred Smith IBM/American Airlines US UK US US

05/11/2017 7

Incremental innovation Radical Innovation

Low Novelty High Novelty

Radical Radical Radical Radical innovation innovation innovation innovation Technology Technology Technology Technology Impact on Impact on Impact on Impact on society society society society

Jet engine Jet engine Jet engine Jet engine Gas turbine Permits mass travel Carbon fibre F1 Carbon fibre F1 Carbon fibre F1 Carbon fibre F1 chassis chassis chassis chassis Carbon fibre Better handling & safer car Personal Personal Personal Personal computer computer computer computer Integrated circuit Computing for all Digital camera Digital camera Digital camera Digital camera Digital imaging Photography more flexible/accessible MP3 player MP3 player MP3 player MP3 player MP3 files Greater access to recorded music

Innovation Innovation Innovation Innovation Components Components Components Components System System System System

Incremental Incremental Incremental Incremental Improved No change Modular Modular Modular Modular New No change Architectural Architectural Architectural Architectural Improved New configuration/ architecture Radical Radical Radical Radical New New configuration/ architecture

05/11/2017 8

Types Types Types Types Explanation Explanation Explanation Explanation Radical

Radical innovation establishes a new dominant design, and hence a new set of core design concepts embodied in components that are linked together in a new architecture.” Henderson and Clark (1990)

Incremental

“ a change that builds on a firm’s expertise in component technology within established product architecture.” Christensen (1993)

Modular

“an innovation that changes a core design concept without changing the product’s architecture.” Henderson and Clark (1990)

Architectural

“leaves the core technological concepts of components intact but changes the way they are designed to work together.”