Invention and Innovation

• Innovation can emerge from thinking outside the box
• Innovations can change our lives and solve everyday problems
• Innovations isn't just technological

Invention

• Creation of something completely new that did not exist before
• Generates new knowledge, including development and processes for new objects, artifacts, methods, or experimental processes

Innovation

• Uses existing knowledge and improves/transforms it

• Solves problems and generates value or impact on society

• Arrival in the market means commercialization and satisfying a demand

• Results in economic and social impact

• Inventors and innovators are not necessarily the same people

• Many innovators base their work on previously generated ideas and knowledge

• Innovation significantly differs from previous products or processes, made available to potential users (product) or implemented in the institutional unit (process)

• Business innovation significantly differs from previous products or processes and is introduced into the market or implemented in the company

Types of Innovation

• Non-technological

  • Business model innovation: P2P platforms, subscription and service models, and co-creation with consumers
  • Social and sustainable innovation: ethical ingredients, sustainable materials, and sustainable packaging

• Technological

  • Digital design with AI: 3D printing, smart fabrics, AI diagnostics, genetic personalization, and augmented reality applications

• Product

  • Introduction of new (improved or radically different) products through technological and knowledge development, substituting materials, and/or altering product characteristics or design

• Process

  • Introduction of new (improved or radically different) production methods by technological development in other areas

• Incremental

  • Adding to, eliminating, combining, or substituting part of an existing product or service

• Radical:

  • Based on new and different knowledge and incorporates a product or service that creates a new category

• Architecture

  • Changes in the global design of the system or the way components interact

• Modular

  • Changes in individual system components, without modifying the global design

• Disruptive

  • Enters a market where the focus isn't centered on the rest, may initially have losses or gains, and is later enhanced by the general market
  • Doesn't start by improving a sophisticated product
  • Creates something simpler, more accessible, and often less costly
  • Solutions begin in overlooked/small markets and then challenge existing models, transforming complex industries

• New small companies can challenge established large companies and existing companies focus on improving the products by incremental

• Innovation is fundamental for businesses and has a significant impact on their markets

• Being innovative requires bettering creating new products processes, generating ideas, and adapting to change

Positive Externalities / Spillovers importance

• Benefits obtained without competing investments/risks by companies from R&D innovations developed by other companies/entities (universities)
• Companies acquire information and knowledge developed by others without paying through market transactions
• Inventors have no effective resources (legal framework) to avoid the prior situation, leads to market failures.

Important for Collaboration

• Collaboration between companies, universities, and public centers is important to explain the collaboration among those and localized geographical areas

• The slowdown in productivity growth in the EU is related to:

  • Reduced innovation capacity of high-tech manufacturing companies, the main source of technical progress/productivity growth
  • An increasing gap between companies in the technological frontier and lagging companies, mainly in service activities

Innovation and Economic Growth

• Technical change is essential for long-term economic growth
• Economic growth occurs when new technologies and scientific advances are applied to various activities
• Improves productivity through distribution

Solow Paradox

• Formulated in 1987, poses a seemingly simple question: "Computers are everywhere except for productivity statistics"
  • Measurement problems means traditional methods may not capture the benefits of new technologies
  • Adaptation Time means new technologies take time for effective integration into productive processes
  • Complementarities means new technologies require complementary investments in human capital, infrastructure, etc
  • Unequal distribution of benefits means productivity gains are not evenly distributed and this could hide aggregate impact in national statistics
• Technical change/innovation generates instability and economic growth cycles
• Innovations happen unevenly across time
• Economic cycles (since the 1st industrial revolution), are associated with disruptive innovation
• Cycles depend on the adoption rate (diffusion) of the innovations
• Innovation stimulates investment, until associated benefits decrease

Schumpeter's Creative Destruction

• Long-term growth is driven by innovation
• Innovation results from entrepreneurial activities motivated by potential future gains and innovations displace existing technologies
• Entrepreneurship is an essential lever for economic growth, job creation, and innovation

Main barriers to entrepreneurship

• Market, institutional, and regulatory failures
• Barriers to entry in markets with large traditional operators
• Transaction costs (company creation, etc.) and asymmetric information
• The OECD is a regular source of data on R&D spending in various countries indicating the total R&D spending of China is greater than that of the EU and the US.

Global Investment Differences

• Recent trends in global spending on research and development show an increasing concentration in the United States and China
• Innovation investment and innovation intensity are different measures
• Innovation intensity (R&D spending/GDP) indicates a country's ability to compete in the global economy
• Reflects a country's ability to generate sustained economic growth, allowing identification of countries leading the technological race
• The USA and China reflects a struggle for dominance in strategic areas, allows assessing which countries are preparing to face global challenges

Global Innovation Index (GII)

• Measures countries' innovation capacities through entry and exit parameters

• The European Innovation Scoreboard (EIS) classifies member states in four types of innovation based on their scores

  • Innovation leader: performance is > 125% of the EU average
  • Strong innovators: between 100% and 125% of the EU average
  • Moderate innovator: between 70% and 100% of the EU average
  • Emerging innovators: <70% of the EU average

• R&D spending may not always translate into innovation and inventors may lack effective resources to prevent knowledge spillover

• Generative AI transitions from proof of concept (R+D) to scale (I), and researchers have dominated until now

• It is now necessary to scale applications and executives need to quickly discover parts of business that can benefit and how new tools will be remodeled

Statistics of R+D activities

• Frascati Manual (2015 ed.) defines R&D as creative work to increase knowledge and design new applications
• Survey of business innovation (Manual of Oslo, 2018 ed.) Defines business innovation as implementing a new or improved product, process, or business model
• Source the statistical used for comparing intensity of country (investment in R&D/GDP) and companies (investment R&D/Income)) efforts
• A manual of Frascati reflects input through investment/R&D spending where as investment reflects execution with in company
• Reflected gasto interno and externo

Differences in relative importance of R&D spending between countries

• Explained by levels of spending within the business sector

• While the EU’s business sector R&D spending was equivalent to 1.47% of GDP in 2023

• This proportion reached 3.85% in South Korea (2022 data), 2.83% in the United States (2022 data), and 2.70% in Japan (2022 data)

• Innovation ranking determines the rate of R&D revenue and expenditure

Is innovation a new innovation

• Active in innovation, not introduced innovation, may so if activities successful, and not introduced and no activity

• Patents stimulate innovation and contribute to the spread of new ideas

• Not all patents innovation not patentable that is academic is from unexploited commercial research

• Innovation requires novelty, intellect, and potential for commercial exploitation

• WIPO, EPO and OEPM are responsible organizations

There are more of a mix of images

• Not all entrepreneurs are "technological innovators"

• Creativity allows promotion of new ideas points of view, resiliences allows assess risks and handle process and teamwork stimulates labor environments

• Survival rate are high

• Entrepreneurship required systematic and financial support to change

What happens during the process of obtaining a patent

• The inventor changes

Technological change and innovation models

• Complex processes result from a combination of different factors and opportunities

• Demand push is the innovation of I+D and market pull is the innovations of current resources

• Internal sources include processes and optimization and external sources include scientific knowledge

There are limitations and advantages and combination of both

• Collaboration with external agents accelerates innovation, share risks and access knowledge shortening launch on new markets

• Collaborations are prevalent in between customers, providers, and universities locals

• The social perception, norms and demographic are all socio demographic characteristics

Abernathy-Utterback Model

• Separating the technological innovation from those of products ==End of summary==