Recombinant Innovation and Smartphones

Innovation Management Exam Revision Topics

• Topics are for revision to explain innovation management theoretically and with examples.

What is Innovation and Invention?

• Innovation is the introduction or implementation of something new and beneficial, recognized as relevant development-oriented change.
• Invention is the initial occurrence of a new product idea or concept.
• Innovation is not the same as invention; innovation involves implementing or introducing a new idea or concept into practice.
• Innovation often involves "creative destruction," meaning the demolition of traditional practices and methods to move forward. This is a key concept in innovation management.

Types of Innovation (Oslo Manual)

• Technological Innovations:
  • Product innovation: Introduction of a significantly improved good or service.
  • Process innovation: Implementing new or improved production or delivery method.
• Non-Technological Innovations:
  • Marketing innovation: Implementing new methods of product promotion, design, or pricing.
  • Organizational innovation: Introduction of new business methods in operations or external relations.

How Innovation Can Be Characterised

• Incremental: Small, gradual improvements to existing products or processes.
• Radical: Significanctly different from existing knowledge or technologies, making existing knowledge obsolete.

Creative Destruction

• Creative destruction is a concept in innovation management stating that innovation often involves breaking down existing systems, products, or business models to allow for the creation of new and better ones.

Open Innovation

• Open innovation is a strategy that involves the use of both internal and external knowledge flows to accelerate the innovation process and expand the market potential for existing innovations. It involves purposive inflows and outflows of knowledge with external partners.

Key Dimensions of Innovation

• Incremental vs. Radical:
  • Incremental refers to small, iterative improvements.
  • Radical represents significant changes or breakthroughs.
• Open vs. Closed:
  • Open involves external collaboration.
  • Closed emphasizes internal R&D efforts.
• Recombinant: Combining existing elements in novel ways.
• Sustaining vs. Disruptive:
  • Sustaining innovations improve existing products.
  • Disruptive innovations target new or low-end markets, potentially disruptive to existing markets over time.
• Discontinuous Innovation: Represents a significant change in technology or service, fundamentally altering business operations.
• Continuous Innovation: Incremental improvements to existing products or services without significantly altering customer behavior.

Innovation as a Core Business Process

• Core processes are critical to a company's existence, enabling function and goal attainment.
• Innovation is a core process as it guides adaptation, growth, and competitiveness.

Advantages and Disadvantages of Small Firm Innovators

• Advantages*:
• Speed of decision-making, as they have fewer hierarchical layers.
• Informal cultures foster flexibility and creativity.
• High-quality communication.
• Disadvantages*:
• Lack of formal systems for management control.
• Lack of access to key resources (especially finance).
• Lack of essential skills and experience.

Groups of Firms Based on Innovation Capability

• Classifies firms into types (A-D) based on their awareness of and ability to adapt to innovation needs.

The Chasm in Innovation Diffusion

• Refers to a critical gap in the adoption lifecycle between early adopters and the early majority.
• Bridging the chasm requires targeting specific segments of the early majority, understanding their needs, tailoring the innovation, and providing proof of reliability to build trust.

The S-curve and Bell Curve in Innovation Diffusion

• S-curve depicts the adoption rate over time.
• Bell curve depicts distribution within adopter categories, which fall at the extremes of the S-curve.

Main Drivers of Innovation Diffusion

• Innovation Characteristics:
  • Relative advantage
  • Compatibility
  • Complexity
  • Trialability
  • Observability
• Social System:
  • Social networks
  • Opinion leaders
  • Communication channels
• Time:
  • Adoption time relates to the speed of innovation's acceptance, influenced by the above factors.

Main Barriers to Innovation Diffusion

• Perceived Complexity: Difficulty in understanding or using the innovation.
• Cost: High costs can deter adoption.
• Lack of Awareness/Information: Insufficient knowledge or marketing about the innovation.
• Resistance to Change: Reluctance to abandon existing processes/methods.
• Social/Cultural Barriers: Conflicts with established norms or social expectations.
• Technological Barriers: Issues with integration, infrastructure, or compatibility with existing systems.
• Regulatory/Legal Barriers: Restrictions or policies hindering the innovation’s adoption.
• Lack of Resources: Insufficient resources to implement or test the innovation.
• Uncertainty/Risk: Lack of trust or knowledge about the innovation's long-term viability or possible negative impacts.

How Product/Service Properties Affect Diffusion

• Key properties that affect diffusion:
  • Relative advantage: How better the innovation is than existing options.
  • Compatibility: How well the innovation fits with existing values/practices.
  • Complexity: How easy the innovation is to understand and use.
  • Trialability: How easily the innovation can be tested before adoption.
  • Observability: How visible the results/benefits of the innovation are to others.

The Role of Clusters in Firms' and Regions' Success

• Increased Innovation and Knowledge Sharing: Proximity of firms allows for sharing ideas and best practices.
• Access to Specialized Resources and Talent: Large talent pools within a specific sector.
• Enhanced Competitiveness and Economies of Scale: Shared resources, infrastructure, and market access.
• Easier Access to Financing and Support: Local institutions and venture capital.
• Synergy and Collaboration: Firms work together to improve efficiency and innovation.
• Attraction of New Businesses and Talent: Attracts investments in the region.
• Improved Infrastructure and Public Services: Infrastructure improvements that support and enhance business growth.
• Global Reach and Networking Opportunities: Facilitates connections with global stakeholders.
• Economic and Regional Development: Clusters generate jobs, increase exports, and boost living standards.

National Innovation System (NIS)

• A framework of institutions, policies, and actors that work together to support and manage innovation. Includes:
  • Collaboration and knowledge sharing.
  • Support for R&D
  • Technology transfer.
  • Human capital development.
  • Access to finance and investment.
  • Fostering international collaborations.
  • Supporting sustainable development.
  • Increasing competitiveness.

Customer Personas in Innovation Management

• Detailed representations of target customers based on demographics, behaviors, motivations, challenges, and goals.
• Using personas supports a customer-centric approach to innovation including;
  • product or service development.
  • strategic decision-making.
  • testing product concepts.
  • improving and supporting communication of the innovation's value.

Value Proposition Canvas

• A method for defining products and services based on customer needs, pains, and gains. Includes:
  • Customer profile
  • Value map (pains relievers and gain creators)

Business Model Canvas

• Overview of business model elements:
  • Customer segments
  • Value propositions
  • Channels
  • Customer relationships
  • Revenue streams
  • Key resources
  • Key activities
  • Key partnerships
  • Cost structure

St. Gallen Business Model Navigator

• A framework for designing business models that is structured to support innovation development.