‘An Overview of Innovation’ by Stephen J. Kline and Nathan Rosenberg

1. ‘An Overview of Innovation’ by Stephen J. Kline and Nathan Rosenberg Article reviewed by Elmo Saarelainen

2. Background Article published in 1986 – articulates against the academic views of the 80s Innovation is invention that is commercially successful Multitude of performance criteria constitute success • Technical, economic and social factors need be considered Often technical aspects valued over market needs A gap resides between the economists’ and engineers’ view Innovation has been described as a procedure that can be performed as a linear progression

3. Arguments The articlearguesverybroadlyagainst the widelyheldperceptions on innovation An attempt to describecreating and managinginnovation as • Heterogeneousbynature in terms of measurability, inputs, outputs and processes • Oftenconsisting of largelyinvisibleincrementalstepsinstead of majorbreak-throughs • An iterativeprocessdependant on research, design, practicallearning and marketneeds • By nature an activityhard to plan and predict • A source of economicrisk (and reward) with risingdevelopmentcosts and unpredictableprofits

4. Chain-linkedmodel of innovation Instead of a linearmodel, the articlesuggests a chain-linkedmode of innovation Main path of innovation: potentialmarket -> inventionoranalytic design -> design and test -> redisign and produce -> distribute and market Supplemented in allphasesbyresearch and knowledge Feedback loopsfromallphases to initiateinnovationafterinnovation and new innovations

5. Uncertainty and planning Creating something new is inherently an uncertain business False summit effect: when climbing a mountain, a climber can see a shoulder of the mountain blocking the real summit as a ’false summit’ Similarly in innovations the final solution or the path there may not be visible beforehand, and a strict plan for the process can cause problems when unpredicted problems arise Planning should be focused on general goals, budgets and refrain from committing too much resources too early

6. Economic and organizationalimplications With high costs of development and uncertain outcomes, economic risks increase Yet innovation is necessary to keep up with competitors Small companies may have problems handling the risk of financing innovative ventures Large low cost manufacturers with streamlined and highly compartmentalized functions often have large amounts of change resistance from employees used to working with dominant designs

7. Conclusions Innovationhas to bethought of as changes in fullsystemsinstead of simplytechnologicaladvances Innovation is not a linearprocess Innovation is usuallydrivenby design and supplementedbyresearch, ratherthan the otherwayaround Innovationdoesnot stop afterproductlaunch, learning and improving is necessary in the tail-end Sometimessmallincrementalchangescanresult in a hugeimpactover a longerperiod of time (example: electricityproduction)

8. Discussion A broadoverviewdiscussing a multitude of subjectsfrom a 30 yearoldpoint of view Manypointsseemeitherself-evidentorobsoletethesedays: • Highdevelopmentcosts, shortlife-cycles • Agility and ’learningenvironments’ compared to rigidorganizationsdepicted in article But... arewestillmaking the mistake of preferringresearchover design and technicalovermarketneeds? • Manycompaniesinvesthugeamounts of money on technicalresearchratherthandevelopment for design and design for customers